River Vale Limited Partnership v. Dept. of Rev. ( 2021 )

468 March 10, 2021 No. 20
IN THE OREGON TAX COURT
REGULAR DIVISION
RIVER VALE LIMITED PARTNERSHIP,
Plaintiff,
v.
DEPARTMENT OF REVENUE,
Defendant.
(TC 5390)
Plaintiff (taxpayer) sought to prove at trial that the county assessor incor-
rectly determined the amount of the additional tax and interest (“Additional
Assessment”) imposed upon the withdrawal of Plaintiff’s land from special
assessment under the Open Space Lands Statutes. Specifically, taxpayer sought
to challenge two values the difference of which constitutes a cap on the Additional
Assessment under ORS 308A.318(2). Defendant Department of Revenue (the
department) initially moved for summary judgment. The court first determined
that the “year of withdrawal” under ORS 308A.318(2) is the year of assessment,
meaning the calendar year. ORS 308.007(1)(d). Next, the court concluded that
the “last year of classification” is the assessment year preceding the assessment
year in which the land is withdrawn from the Open Space Land Statutes. Finally,
the court concluded that the “act” affecting taxpayer’s property and starting the
clock for filing an appeal with the Magistrate Division was the withdrawal of the
property from Open Space classification, because until then the “year of with-
drawal” could not be known. The court denied the department’s motion for sum-
mary judgment and allowed the case to proceed to trial.
Oral argument on Defendant’s Motion for Summary
Judgment was held remotely on July 16, 2020.
Alex C. Robinson, CKR Law Group, Lake Oswego, filed a
response and argued the cause for Plaintiff.
Daniel Paul, Senior Assistant Attorney General, Depart-
ment of Justice, Salem, filed the motion and argued the
cause for Defendant.
Decision rendered March 10, 2021.
ROBERT T. MANICKE, Judge.
I. INTRODUCTION
In this property tax case, Defendant Department
of Revenue (the department) has moved for summary judg-
ment, asking the court to uphold the assessment by the
Deschutes County Assessor (the assessor) of additional tax
Cite as 24 OTR 468 (2021) 469
and interest (the “Additional Assessment”) imposed upon
the withdrawal of Plaintiff’s (taxpayer’s) land from assess-
ment under ORS 308A.300 to 308A.330 (the “Open Space
Lands Statutes”). Taxpayer does not contest the withdrawal
but resists the department’s motion, seeking to prove at
trial that the assessor incorrectly determined the amount
of the Additional Assessment. Specifically, taxpayer seeks
to prove two values, the difference of which constitutes a
cap (the Cap) on the Additional Assessment under ORS
308A.318(2).1 Taxpayer intends to prove that the Cap, cor-
rectly determined, reduces the amount of the Additional
Assessment.
II. FACTS
The parties stipulate to the following facts.
Taxpayer purchased a 36.06-acre parcel consisting of land
in Deschutes County (the Property) on January 27, 2017,
for $4,500,000.2 The assessor had classified the Property
as “open space land” (Open Space Land) in 1984, under
what is now ORS 308A.300(1), and the property was still
so classified when taxpayer bought it. On October 31, 2017,
taxpayer’s Land Development Manager sent an email to
the assessor’s office stating in part: “We acquired taxlot
181113C001300 earlier this year and plan to improve the
land to finished home lots beginning in a few weeks. We are
trying to understand the tax breakdown as we believe there
will be farmland deferral owed. Is there a way for us to get
that exact amount and when that will be due?” The asses-
sor’s office responded that day, stating that, as of that date,
the potential additional tax liability amount plus interest
was $442,097.70.
On February 27, 2018, the assessor’s office sent
taxpayer a letter stating in part: “In compliance with ORS
308A.718 and 308A.724, this is official notification that the
special assessment of 36.06 acres of Open Space Specially
Assessed land on the above real property account(s) have
been disqualified by the assessor for the following reason.
1
Unless otherwise noted, all references to the Oregon Revised Statutes
(ORS) are to the 2017 edition.
2
The property tax statement for tax year 2017-18 shows a zero value for
improvements, and the parties have not raised improvements as an issue.
470 River Vale Limited Partnership v. Dept. of Rev.
–The land is no longer qualified because the use of the land
has been applied to some use other than as open space
land.” The amount of “open space additional tax” stated in
the February 27 letter was $495,887. Taxpayer inquired
about the computation of the amount due, and the assessor
responded. Taxpayer appealed to the Magistrate Division
on May 18, 2018. Taxpayer’s appeal in this division of the
court is limited to its claim that “the amount of additional
taxes and interest quoted by the assessor exceeds the lim-
itations provided within ORS 308A.318(2).” The court under-
stands this to mean that taxpayer challenges only the dollar
amount of the Cap, not the amount of additional tax or inter-
est that would be determined under ORS 308A.312(3) before
application of the Cap pursuant to ORS 308A.315(5).
The parties stipulate that the assessor recorded
the following values for the Property on the roll during the
annual assessment process. Taxpayer does not stipulate
that these values are accurate or that they control for pur-
poses of determining the Cap:
• Real market value determined under ORS 308.205
(RMV) (tax year 2017-18): $1,803,000
• RMV (tax year 2018-19): $4,500,000
• Maximum assessed value determined under ORS
308A.315(3) (MAV)3 (tax year 2017-18): $55,215
Finally, the parties have stipulated that the asses-
sor determined and placed on the roll for tax year 2017-18
the amount of $36,060 “pursuant to ORS 308A.315(5).” The
parties refer to this value as the “taxable specially assessed
value,” a term that does not exist in Oregon property tax law.
Based on the reference to ORS 308A.315(5) and the parties’
usage in these proceedings, the court understands the par-
ties to agree that the assessor determined for annual assess-
ment purposes that the “open space value” of the Property,
i.e., its RMV determined under ORS 308.205 but subject to
the assumption that its highest and best use was its “cur-
rent open space use” as required by ORS 308A.315(5)(a),
3
The court understands the parties’ stipulated term “maximum specially
assessed value” to correspond to the statutory term “maximum assessed value”
as defined in the statute the parties cite. See ORS 308A.315(3) - (4).
Cite as 24 OTR 468 (2021) 471
was $36,060. The court understands the parties to agree
further that the assessor treated this same $36,060 value
as the Property’s “assessed value” for tax year 2017-18
under ORS 308A.315(2) because it was less than the MAV of
$55,215. See ORS 308A.315(2) (“assessed value” is lesser of
“maximum assessed value” or “open space value determined
under subsection (5)”). In its motion, Defendant referred to
$36,060 as “the value of the land as open space, determined
pursuant to ORS 308A.315(5)” and as “the value on which
plaintiff’s property taxes were assessed for that year.” At
oral argument, taxpayer’s counsel stated that “the taxable
specially assessed value [under ORS 308A.315(2)] is the
lesser of either the maximum assessed value or the open
space value under [ORS 308A.315(5)]” (emphasis added). As
with the other values recited above, taxpayer does not agree
that $36,060 is accurate or that it controls for purposes of
the Cap.
In this order, the court uses the term “Open Space
Value” to mean a value determined pursuant to ORS
308A.315(5). The court finds that the parties agree that
the assessor determined that the Open Space Value of the
Property for tax year 2017-18 was $36,060. The court uses
the term “Assessed Value” or “AV” to mean a value deter-
mined as the lesser of (1) the property’s MAV or (2) its RMV
or Open Space Value, whichever is applicable in context,
pursuant to ORS 308A.315(2). The court finds that the par-
ties agree that the assessor determined that the AV of the
Property for tax year 2017-18 was $36,060. Again, taxpayer
does not agree that $36,060 is the accurate value for either
purpose.
III. LEGAL BACKGROUND
The legislature adopted the Open Space Lands
Statutes in 1971 as one of the early “special assessment”
property tax programs that now encompass all of ORS chap-
ter 308A. See Or Laws 1971, ch 493; see generally Boardman
Acquisition, LLC v. Dept. of Rev., 361 Or 440, 442-44, 393
P3d 1147 (2017) (overview of farmland special assessment).4
4
The first such programs include the commonly used farm use special
assessment program and the program for certain forest land. See Or Laws 1963,
ch 577 (establishing comprehensive farm use special assessment program tied to
472 River Vale Limited Partnership v. Dept. of Rev.
In lieu of the familiar RMV based on a hypothetical arm’s-
length transaction,5 these programs assign a value to qual-
ifying property that is intended to be low, reflecting restric-
tions that limit the property’s use to purposes that the
legislature considers socially beneficial.6 On the other hand,
if the property’s use changes to one that is not thus favored,
the law governing the special assessment program typically
requires the assessor to recover some or all of the accu-
mulated difference in tax. Most programs also require the
assessor to determine this difference annually, and to note
on the assessment and tax rolls that additional amounts
will become due if the special assessment program ceases to
zoning laws under ORS chapter 215 and providing for up to five years’ worth of
additional tax upon disqualification, with annual notification on assessment and
tax roll). The legislature adopted similar concepts for certain forest land in 1965.
See Or Laws 1965, ch 191, § 1 (amending former ORS 321.620 to add additional
tax for land discovered to no longer be used primarily as forest land, based on
up to prior five years’ difference, with annual notification on assessment and tax
roll); cf. Or Laws 1981, ch 720, § 8 (creating property tax exemption for locally
designated riparian land, with additional tax upon withdrawal of up to five times
“the amount of taxes that would have been assessed against the land had it been
valued” according to its RMV “during the preceding tax year”); Or Laws 2003,
ch 539 (creating program assessing wildlife habitat land at value different from
RMV; assessing up to 10 years’ additional tax upon disqualification pursuant to
ORS 308A.703).
5
See Powell Street I, LLC v. Multnomah County Assessor, 365 Or 245, 247,
445 P3d 297 (2019) (defining RMV).
6
For example, under ORS 308A.300(1), Open Space Land is:
“(a) Any land area so designated by an official comprehensive land use
plan adopted by any city or county; or
“(b) Any land area, the preservation of which in its present use would:
“(A) Conserve and enhance natural or scenic resources;
“(B) Protect air or streams or water supply;
“(C) Promote conservation of soils, wetlands, beaches or tidal marshes;
“(D) Conserve landscaped areas, such as public or private golf courses,
which reduce air pollution and enhance the value of abutting or neighboring
property;
“(E) Enhance the value to the public of abutting or neighboring parks,
forests, wildlife preserves, nature reservations or sanctuaries or other open
space;
“(F) Enhance recreation opportunities;
“(G) Preserve historic sites;
“(H) Promote orderly urban or suburban development; or
“(I) Retain in their natural state tracts of land, on such conditions as
may be reasonably required by the legislative body granting the open space
classification.”
Cite as 24 OTR 468 (2021) 473
apply. See, e.g., ORS 308A.083 (for specially assessed farm
use zone farmland, requiring county assessor to enter on
the annual roll the “potential additional tax liability”); ORS
308A.362(6) (same for tax-exempt and partially tax-exempt
riparian land).
In a comprehensive law in 1999, the legislature stan-
dardized procedures (and associated terminology) by which
property enters and exits many of the most commonly used
special assessment programs, and the legislature recodified
most of the governing statutes together in new ORS chapter
308A. See Or Laws 1999, ch 314; ORS 308A.700 - 308A.733
(providing procedures for determining and assessing addi-
tional taxes for certain farmland, forestland, wildlife habi-
tat and conservation easement properties). The Open Space
Lands Statutes largely escaped this procedural standard-
ization, however, and they continue to include very distinct
features: not only the method for computing the Additional
Assessment (and accordingly, its potential size) and the
application of percentage-based penalties in addition to the
Additional Assessment, but also the procedure for exiting
the program and the use of the term “withdrawal” rather
than “disqualification” as used in most other programs.
The substitute for RMV prescribed in the Open
Space Lands Statutes is the Open Space Value, computed
pursuant to ORS 308A.315(5), which requires the assessor
to assume that “the highest and best use of the land” is lim-
ited to “the current open space use.” The assessor is spe-
cifically prohibited from “consider[ing] alternative uses to
which the land might be put.” ORS 308A.315(5)(a).7 As with
other special assessment programs, the assessor is required
to determine two parallel sets of values for Open Space Land
when compiling the annual assessment and taxation rolls:
the values actually used to determine the tax due each year
7
The Open Space Value may or may not be the value on which tax ultimately
is imposed for a particular tax year; as with all property, the tax limitations
regime known as Measure 50 overlies the Open Space Lands Statutes. See Or
Const, Art XI, § 11. The statute implementing Measure 50 sets the taxable,
“assessed,” value as the lesser of the Open Space Value or the property’s MAV.
See ORS 308A.315(2). In this case, however, MAV is not an issue: For purposes of
the assessment for tax year 2017-18, the assessor determined that the Property’s
MAV ($55,215) exceeded its Open Space Value ($36,060), and that the Open Space
Value therefore was the AV.
474 River Vale Limited Partnership v. Dept. of Rev.
the property is classified as Open Space Land, and a sec-
ond set of values “as if” the property were not so classified,
the latter set used only to determine the potential monetary
consequences if the property is withdrawn from Open Space
Land classification:
Values Actu-
How “As if” How
ally Used
Determined Values Determined
Each Year
Open Space RMV, but “As if” Real No assump-
Value assumes the Market tion of open
land will be Value space use
ORS used solely
308A.315(5) ORS 308.215
for its current
(1)(a)(E)
open space
use
Assessed Lesser of MAV “As if” Lesser of
Value or Open Space Assessed “as if” MAV or
Value Value “as if” RMV
ORS
308A.315(2) ORS 308.215
(1)(a)(I)8
Maximum Greater of “As if” Greater of
Assessed 103% of last Maximum 103% of last
Value year’s AV or Assessed year’s “as if”
100% of last Value AV or
ORS year’s MAV 100% of last
308A.315 ORS 308.215 year’s “as if”
(3) - (4) (1)(a)(I) MAV
The assessor also must indicate on the roll that the prop-
erty is subject to special assessment as Open Space Land
and must include the “amount of additional taxes which
would be due if the land were not” classified as Open Space
Land. ORS 308A.312(5). The additional tax for any one year
essentially is (1) the “as if” AV times the cumulative tax rate
for that location, less (2) the actual AV times that same tax
rate.9
8
For general definitions under Measure 50 of AV and MAV for nonspecially
assessed property, see ORS 308.146.
9
This comparison ignores the possibility of “compression” under the 1990
property tax limitation provision known as Measure 5. See Or Const, Art XI,
Cite as 24 OTR 468 (2021) 475
Three major features distinguish the Additional
Assessment for Open Space Land from other special assess-
ment programs. First, while the farm use and forestland pro-
grams limit the number of prior years’ additional taxes that
become due upon disqualification, the Open Space Lands
Statutes require additional tax to be collected for all prior
years in which the property was classified as Open Space
Land. See ORS 308A.318(2) (“each year in which the land
was classified”). Second, the Open Space Lands Statutes
require interest to be paid on the additional tax (computed
from the date the additional tax would have been payable for
each prior year), and the statutes impose penalties of up to
40 percent of the additional tax and interest amount if the
owner fails to notify the assessor before changing the use of
the property. See id. (interest); ORS 308A.321 (penalties).10
Third, the Open Space Lands Statutes cap the Additional
Assessment at the difference between two component values:
• the Open Space Value for the last year of classifica-
tion; and
• the RMV for the year of withdrawal.
See ORS 308A.318(2) (Additional Assessment is “limited to
a total amount not in excess of the dollar difference in the
value of the land as open space land for the last year of clas-
sification and the real market value under ORS 308.205 for
the year of withdrawal.”). It is the amount of the Cap, deter-
mined by the value of each component value, that is at issue
in this case.
IV. ISSUES
(1) When were the “last year of classification” and the “year
of withdrawal”?
(2) Is taxpayer precluded from contesting the values that
are the components of the Cap?
§ 11b. For background on “compression,” see Oregon Department of Revenue,
A Brief History of Oregon Property Taxation 3-4, 7-8, available at https://www.
oregon.gov/DOR/programs/gov-research/Documents/303-405-1.pdf (last visited
Mar 3, 2021).
10
In this case, the assessor appears to have treated taxpayer’s October 31,
2017, email as a “notice of request for withdrawal”; the assessor did not assess
penalties.
476 River Vale Limited Partnership v. Dept. of Rev.
V. STANDARDS OF REVIEW
This division of the court reviews a Magistrate
Division decision de novo based on the record developed in
this division. ORS 305.425(1); see also ORS 305.501(6). The
court grants a motion for summary judgment only if “the
pleadings * * * declarations, and admissions on file show
that there is no genuine issue as to any material fact and
that the moving party is entitled to prevail as a matter
of law.” Tax Court Rule (TCR) 47 C. See Christensen II v.
Dept. of Rev., 23 OTR 155 (2018) (citing Two Two v. Fujitech
America, Inc., 355 Or 319, 331, 325 P3d 707 (2014)). “No gen-
uine issue as to a material fact exists if, based upon the
record before the court viewed in a manner most favorable
to the adverse party, no objectively reasonable [factfinder]
could [find] for the adverse party on the matter that is the
subject of the motion for summary judgment.” TCR 47 C.
The adverse party has the burden of producing evidence
on any issue raised in the motions as to which the adverse
party would have the burden of persuasion at trial. Id.VI. ANALYSIS
A. When were the “last year of classification” and the “year
of withdrawal”?
The court first determines what periods constitute
the “last year of classification” and the “year of withdrawal”
of the Property under ORS 308A.318(2) in order to identify
the dates as of which the two values are established that
determine the amount of the Cap.11 Taxpayer claims that the
last year of classification was the tax year 2017-18, and that
the year of withdrawal was the tax year 2018-19. The depart-
ment agrees that the last year of classification was the tax
year 2017-18 but the department expresses no view as to
whether the year of withdrawal was tax year 2017-18 or tax
year 2018-19 because the RMV on the roll for both tax years
was sufficiently high that the Cap amount well exceeds the
11
The Open Space Lands Statutes lack a counterpart to ORS 308A.068(3),
which provides, in part: “Whether farmland qualifies for special assessment
under this section shall be determined as of January 1 * * *. If the land becomes
disqualified on or after July 1, the land shall continue to qualify * * * for the cur-
rent tax year.”
Cite as 24 OTR 468 (2021) 477
additional tax and interest amounts determined under ORS
308A.312(3).
The Open Space Lands Statutes do not define “last
year of classification” or “year of withdrawal.” Ambiguity
arises because the property tax statutes refer sometimes to
the calendar year and sometimes to the fiscal year of July 1
through June 30. However, ORS 308.007 defines certain
uses of the term “year” for purposes of property taxation,
obviating analysis under the methodology prescribed in
State v. Gaines.12 State v. Taylor, 271 Or App 292, 298, 350
P3d 525 (2015) (“[W]hen a term is defined by statute, we look
to the statutory definition to ascertain the plain meaning of
the term[.]”). The term “assessment year” refers to a calen-
dar year, while a “tax year” is a 12-month period beginning
July 1. ORS 308.007(1)(b), (c). Each assessment year “corre-
sponds to” the tax year beginning July 1 of the same calen-
dar year. ORS 308.007(2). The word “year,” standing alone,
refers to the assessment year, i.e., to the calendar year. ORS
308.007(1)(d). Each of these definitions applies “unless the
context or a specially applicable definition requires other-
wise.” ORS 308.007(1).
Starting with the “year of withdrawal,” the court
finds that the assessor withdrew the Property from classi-
fication as Open Space Land by the act of announcing the
withdrawal in the letter to taxpayer dated February 27,
2018.13 The default definition of “year” in ORS 308.007(1)(d)
would require the court to treat the “year of withdrawal” as
the assessment year 2018, which corresponds to the tax year
July 1, 2018 through June 30, 2019. The court sees noth-
ing in the context of the Open Space Lands Statutes that
requires a different interpretation of “year of withdrawal.”
The court next determines the “last year of classifi-
cation.” This term requires the court to address the fact that
the withdrawal did not occur cleanly at the turn of a new
12
See 346 Or 160, 171-72, 206 P3d 1042 (2009) (establishing methodology
for statutory interpretation: first, text and context; second, legislative history;
finally, maxims of statutory construction).
13
The letter uses the term “disqualified,” perhaps borrowing from a form
letter applicable to one of the more common special assessment programs to
which standardized “exit” procedures apply. See, e.g., ORS 308A.718 (notices of
“disqualification”).
478 River Vale Limited Partnership v. Dept. of Rev.
assessment or tax year, but took place approximately seven
weeks after the beginning of the assessment year 2018 and
approximately eight months after the start of the tax year
2017-18. Not surprisingly for a program tied to the annual
property tax cycle, the Open Space Lands Statutes imply
that classification status is determined on a full-year basis.
See, e.g., ORS 308A.306 (requiring taxpayer to apply for
classification during the calendar year preceding “the first
assessment year for which such classification is requested”
(emphasis added)); ORS 308A.312(2) (assessor to record “as
if” assessed value “each year the land is classified”).14 The
statutes contain no provision for proration or partial-year
classification. The court concludes that an assessor’s “with-
drawal” removes the land from open space classification for
the entire assessment year in which the withdrawal occurs,
and for the corresponding tax year. The last year of clas-
sification, then, is the assessment year (and corresponding
tax year) preceding the assessment year in which the act of
withdrawal occurs.
In this case, the year of the Property’s withdrawal
from classification as Open Space Land was the assessment
(calendar) year 2018 and the tax year beginning July 1,
2018. The last year of the Property’s classification was the
assessment year 2017 and the tax year beginning July 1,
2017.
B. Is taxpayer precluded from contesting the values that are
the components of the Cap?
The court now turns to the main issue the parties
identify: whether taxpayer may contest the values the
assessor placed on the roll for the two components of the
Cap. Taxpayer seeks to prove at trial that the Property’s
Open Space Value as of January 1, 2017, was higher than
the $36,060 Open Space Value the assessor determined
for tax year 2017-18, or that the Property’s RMV as of
January 1, 2018, was lower than the $4,500,000 amount
14
Similar full-year classification of property as specially assessed or as
exempt is evident in other parts of property tax law. See Boardman Acquisition,
361 Or at 448-50 (farmland disqualification affects one of two entire tax years,
depending on date of disqualification); ORS 311.410(1), (3) (property taxable on
July 1 remains taxable for entire ensuing tax year; property exempt on July 1
remains exempt for ensuing tax year).
Cite as 24 OTR 468 (2021) 479
recorded for tax year 2018-19, or both. At oral argument,
taxpayer’s counsel stated that: “It’s really going to be both
values at issue, both the value as open space in the last year
of classification and the value according to ORS 308.205, the
RMV, in the year of withdrawal.” By doing so, taxpayer would
reduce the Cap and potentially limit taxpayer’s Additional
Assessment under ORS 308A.318(2). The department con-
tends that taxpayer’s attempt to do so is time-barred.
The court first observes that the component values
that taxpayer seeks to challenge are values that the asses-
sor was required to record in the ordinary course of annual
assessment. Nothing in the Open Space Lands Statutes
expressly or implicitly requires an assessor to determine
the component values twice, once for annual assessment
purposes and separately for purposes of calculating the
Cap if the property is withdrawn. As shown on the table
above, the statutes expressly require the assessor to annu-
ally determine both the RMV under ORS 308.205 and (so
long as the property is classified) the Open Space Value
under ORS 308A.315(5), among other values. By contrast,
the Open Space Lands Statutes contain no express require-
ment to redetermine any values for purposes of determin-
ing the Cap when the land is withdrawn from classification.
See ORS 308A.318(2) (Additional Assessment is “limited to
a total amount not in excess of the dollar difference in the
value of the land as open space land for the last year of clas-
sification and the real market value under ORS 308.205 for
the year of withdrawal.”).15 Nor has either party identified
any reason to infer from the Open Space Lands Statutes
that an assessor can or must redetermine any value upon
withdrawal.
The question, then, becomes whether taxpayer’s
appeal challenging the component values of the Cap is timely
15
The court notes that the Open Space Lands Statutes refer to the Open
Space Value slightly differently in different provisions, but the parties agree that
each term refers to the value determined by following the steps prescribed in
ORS 308A.315(5), and the court agrees that the minor differences do not denote a
difference in meaning. Compare ORS 308A.315(5) (the “open space value of land”)
with ORS 308A.318(2) (“the value of the land as open space land”). See also ORS
308A.315(2) (referring to the “land’s open space value”). The court sees no basis to
conclude that any of the minor variations implies a requirement to redetermine
any values when property is withdrawn from classification.
480 River Vale Limited Partnership v. Dept. of Rev.
pursuant to more general appeal statutes. The department
has pointed to two appeal procedures: the regular annual
property tax valuation dispute process that commences
with a petition to the county Board of Property Tax Appeals
(BOPTA), and the all-purpose process by which any per-
son can appeal to the Magistrate Division within 90 days
after an “act, omission, order or determination” of a tax
official becomes known to the person, as provided in ORS
305.275(1); ORS 305.280(1). Department’s counsel stated
at oral argument that taxpayer could have appealed to the
BOPTA. The BOPTA process would have required taxpayer
to file a petition no later than January 2, 2018,16 and there
is no evidence taxpayer did so. At oral argument, however,
the department acknowledged that its BOPTA argument is
flawed as to the Open Space Value, because a BOPTA lacks
jurisdiction to increase any value. See ORS 309.026(2) - (4)
(“board shall hear petitions for the reduction” of certain
values).17 The court concludes that the regular annual
BOPTA procedures gave taxpayer no statutory right of
appeal that could have addressed both components of the
Cap.
At oral argument, the department reframed its posi-
tion, asserting that taxpayer could have contested the asses-
sor’s determination of the Open Space Value by appealing to
16
The statutory deadline to appeal to the BOPTA for the 2017 assessment
year and tax year 2017-18, December 31, 2017, fell on a Sunday and therefore
was extended to January 2, 2018. See ORS 309.100(2) (“Petitions filed under this
section shall be filed during the period following the date the tax statements
are mailed for the current tax year and ending December 31.”); ORS 174.120(1)
(excluding the last day from the computation of statutory time limitations if the
last day is a “legal holiday or * * * Saturday”); see also ORS 187.010(1)(a) (desig-
nating Sundays as legal holidays).
17
Nor was the BOPTA process immediately available to contest the other
component of the Cap (the RMV). That is because the RMV at issue is for tax year
2018-19, as explained above. The assessor could not have determined the RMV
for tax year 2018-19 before the annual assessment date, which was January 1,
2018, at 1:00 a.m. See ORS 308.210(1). And taxpayer could not have filed a BOPTA
petition as to that RMV until “the period following the date the [annual property]
tax statements have been mailed and ending December 31.” ORS 309.100(2). The
annual deadline to mail property tax statements is October 25; therefore, in this
case, taxpayer could not have appealed the RMV component of the Cap to the
BOPTA until approximately eight months after the assessor’s February 27 with-
drawal letter. See ORS 311.115 (“The assessor shall deliver the roll to the tax
collector each year at such time as the assessor and the tax collector agree is
necessary to enable the mailing of tax statements on or before October 25.”).
Cite as 24 OTR 468 (2021) 481
the Magistrate Division under ORS 305.275(1).18 Taxpayer
argues that it could not have done so because it was not
“aggrieved” until the assessor withdrew the land from clas-
sification as Open Space Land. Taxpayer’s counsel stated at
oral argument that “I don’t know how the taxpayer would be
‘aggrieved’ until we have this disqualification and calcula-
tion of additional taxes.”
The Oregon Supreme Court has summarized the
requirements under ORS 305.275(1):
“To appeal [under ORS 305.275(1)], the plaintiff must meet
three distinct preconditions. The plaintiff must show:
(1) that the plaintiff is ‘aggrieved by an act or omission of’
the county assessor; (2) that the act or omission ‘affects the
property’ of the aggrieved plaintiff; and (3) that ‘no other
statutory right of appeal’ is available.”
NW Medical Labs. v. Good Samaritan Hospital, 309 Or 262,
267, 786 P2d 718 (1990). In this case, this court has con-
cluded above that the third precondition, lack of any “other
statutory right of appeal,” is satisfied. The court’s remaining
task is to identify whether any “act” caused taxpayer to be
“aggrieved” and its property to be “affected.”
18
ORS 305.275 sets forth the standing requirements for appeals to the
Magistrate Division of the Tax Court:
“(1)(a) The person must be aggrieved by and affected by an act, omission,
order or determination of:
“* * * * *
“(C) A county assessor or other county official, including but not lim-
ited to the denial of a claim for exemption, the denial of special assessment
under a special assessment statute, or the denial of a claim for cancellation
of assessment[.]
“* * * * *
“(b) The act, omission, order or determination must affect the property
of the person making the appeal or property for which the person making the
appeal holds an interest that obligates the person to pay taxes imposed on
the property. * * *
“(c) There is no other statutory right of appeal for the grievance.”
The relevant portion of ORS 305.280(1) states, subject to exceptions inapplicable
to this case:
“[A]n appeal under ORS 305.275(1) or (2) shall be filed within 90 days after
the act, omission, order or determination becomes actually known to the
person, but in no event later than one year after the act or omission has
occurred, or the order or determination has been made.”
482 River Vale Limited Partnership v. Dept. of Rev.
The Oregon Supreme Court recently focused on the
“aggrieved” and “affected” preconditions, explaining that a
taxpayer is “aggrieved” when it “suffer[s] an injury or wrong
that creates a private interest in the outcome of the matter
that is different from that of a member of the general public.”
Seneca Sustainable Energy, LLC v. Dept. of Rev., 363 Or 782,
796, 429 P3d 360 (2018). A taxpayer’s property is “affected
by” an act or omission if it results in an “improperly inflated”
tax bill. See id. at 798.19 A line of cases in this court, pre-
dating Seneca, interprets ORS 305.275(1) as requiring that
the taxpayer have “an immediate claim of wrong” or injury.
See Kaady v. Dept. of Rev., 15 OTR 124, 125 (2000) (taxpayer
lacked standing to appeal excessive RMV on the roll because
the lower RMV sought by taxpayer still would exceed AV;
rejecting argument based on “speculative” risk of future law
changes (citing Parks Westsac L.L.C. v. Dept. of Rev., 15 OTR
50 (1999))); Sherman v. Dept. of Rev., 17 OTR 322 (2004) (no
standing where taxpayers admitted in briefing that “the RMV
of the floating home of Slip No. 10 does not immediately impact
the Plaintiffs”); see also, e.g., Clackamas Co. v. Clackamas
County Assessor, TC-MD 030868E, 2003 WL 22120735 at
*1-2 (2003) (no standing to contest excessive RMV of specially
assessed farmland merely because RMV would be a factor in
calculating additional tax due “should the property ever by
removed from the special assessment program”).
19
In Seneca, the court held that the taxpayer met the “aggrieved by” and
“affected by” requirements. 363 Or at 798-99. Much, but not all, of the taxpayer’s
property was exempt from property tax because it was located in an “enterprise
zone.” See id. at 784-86. To obtain the enterprise zone tax exemption, the tax-
payer entered into an agreement with the City of Eugene and Lane County in
which the taxpayer agreed to pay a “public benefit contribution” if it “failed to
meet certain economic development and employment goals.” Id. at 785-87. The
taxpayer failed to meet those goals for two successive years. Id. The contribution
was based on the amount of property tax that the taxpayer would have had to
pay were it not tax exempt. Id. at 785. The department resisted the taxpayer’s
appeal of the county’s determination of the property’s RMV, arguing in part that
the taxpayer was not “aggrieved” by the county’s RMV determination because
the property was exempt from taxation and the “public benefit contribution”
was not a tax. Id. at 794-95. The court disagreed, concluding that the taxpayer
demonstrated that it had a “private interest in the outcome of the matter that
is different from that of a member of the general public” because the city’s and
county’s use of “the department’s erroneous [RMV] determination and the coun-
ty’s notation of that value on the assessment roll * * * impose[d] a significant pub-
lic benefit contribution on [the taxpayer] for each of the tax years in question.”
Id. at 796-97. The court also held that the taxpayer’s property was “affected
by” the RMV determination because taxes were imposed on the taxpayer’s non-
exempt property “based on the department’s [RMV] determination.” Id. at 798.
Cite as 24 OTR 468 (2021) 483
The department argues that the assessor’s estab-
lishment of the Open Space Value was the requisite “act”
that taxpayer could have challenged under ORS 305.275(1).20
Although the department does not describe specifically
how or when this act occurred, the stipulations suffice to
establish that it did occur. Under Seneca, taxpayer was
“aggrieved” by this act because taxpayer owned the prop-
erty and thus had “a private interest in the outcome of the
matter that is different from that of a member of the general
public.” 363 Or at 796. However, the court is not persuaded
that the act of setting the Open Space Value at $36,060
“affected” taxpayer’s property, because that act alone could
not have “improperly inflated” any amount taxpayer owed.21
Cf. id. at 798 (“Seneca’s property tax bills * * * were improp-
erly inflated if the department’s real market value deter-
mination was erroneous.”). The premise of taxpayer’s claim
is that the assessor set the Open Space Value for the last
year of classification too low in relation to the RMV for the
year of withdrawal, creating too large a gap between those
values. Taxpayer seeks to narrow that gap, which serves as
the Cap on its Additional Assessment, by proving that the
Open Space Value is higher, that the RMV is lower, or both.
But in any event, it is the total amount of that “gap” or “Cap”
that “affects” taxpayer’s Property. The assessor’s setting of
the Open Space Value alone is not an “act” affecting tax-
payer’s Property.22 The requisite act occurred only when the
assessor withdrew the Property from classification. Until
the assessor did that, the “year of withdrawal” could not
be known; therefore, the second component value used to
20
The department originally argued that, “as with the open space value of
the property,” taxpayer could have petitioned the BOPTA “for a reduction in the
RMV on the roll for 2017-18.” As the court has explained, tax year 2017-18 is not
the relevant year for purposes of determining the RMV component of the Cap;
therefore, even if the BOPTA had the authority to increase the 2017-18 Open
Space Value, taxpayer would not have been able to challenge both values in
the same proceeding as the department seems to assert. At oral argument, the
department focused its argument on the taxpayer’s appeal of the 2017-18 Open
Space Value.
21
As to the regular annual assessment for tax year 2017-18, the assessor’s
setting of an incorrectly low Open Space Value would have deflated, rather than
inflated, the amount taxpayer owed, because that lower Open Space Value also
served as the Property’s AV.
22
In addition, the setting of only the first of two required values also would
not create an “immediate claim of wrong” as required under Kaady.
484 River Vale Limited Partnership v. Dept. of Rev.
determine the Cap (the RMV for the year of withdrawal)
was likewise unknown.23
Applying this reasoning to the facts, the assessor
withdrew the Property from classification as Open Space
Land on February 27, 2018. Taxpayer appealed to the
Magistrate Division on May 18, 2018, less than 90 days
after the assessor’s letter. The court concludes that tax-
payer’s appeal is timely, and taxpayer may seek to prove at
trial the Property’s Open Space Value for tax year 2017-18
and the RMV for tax year 2018-19. The court will deny the
department’s motion.
The court does not decide today whether, if tax-
payer proves a higher Open Space Value at trial, that value
changes the Property’s AV for purposes of the amount of tax
due for tax year 2017-18. Except for a remark by the depart-
ment at oral argument that the assessor would lack statu-
tory authority to effect such a change, the parties have not
presented, much less briefed, the issue.24
23
The court notes that this result is consistent with this court’s statement
in an earlier case, implying that a taxpayer may, upon disqualification from a
special assessment program, appeal not only the act of disqualification but also
the values on the roll for the years for which additional tax is assessed. See Eby
v. Dept. of Rev., 15 OTR 247, 251 (2000) (“[T]he [disqualification] statute [for spe-
cially assessed zoned farmland, ORS 308.397 (1995 ed),] contemplates that the
owner will either accept the action or appeal to this court under ORS 305.275.
ORS 305.280(1) gives the owner only 90 days to file an appeal. The 90 day-
appeal period begins running when an owner learns of the disqualification * * *.
An owner may agree with the assessor’s action of disqualifying the property, but
may disagree with the market value estimate placed on the roll or the amount
of additional tax calculated or both. If that information is not contained in the
notice [of disqualification], the owner is unable to determine whether to appeal on
those points.”); see also Georgia-Pacific Consumer Products LP v. Clatsop County,
20 OTR 138, 140 & n 2 (“The department expressed its view that taxpayer may
challenge the amount of potential [additional] tax due as computed and noted
on the assessment roll. The department bases its conclusion on the premise that
taxpayer did not have standing in earlier years to challenge the value determi-
nations because, in those years, the existence of a complete exemption made the
question of value one without practical significance sufficient to make a challenge
at that time justiciable. Taxpayer takes the same position. The court expresses
no opinion on the question.”).
24
The court’s conclusion also makes it unnecessary to address certain argu-
ments by taxpayer that the Open Space Value is not equal to the stipulated
“Taxable Specially Assessed Value” because MAV can artificially depress the
Open Space Value. The court notes only that it is not logically possible for MAV
to affect the “snapshot” Open Space Value measured as of January 1 at 1:00 a.m.
for the last year property is classified as Open Space Land.
Cite as 24 OTR 468 (2021) 485
VII. CONCLUSION
Now, therefore,
IT IS ORDERED that the department’s Motion for
Summary Judgment is denied.