County Assessors Get Help With a Difficult Statute

After improvements offered by Polk County Assessor Doug Schmidt, representing the Oregon State Association of County Assessors (OSACA), were adopted by the Senate Committee on Finance & Revenue in March, Senate Bill (SB) 181A sailed through the Senate 26-1. On June 1, the House Committee on Revenue sent the bill to the full House unanimously with a “do pass” recommendation, where it is expected to pass easily.

SB 181A is the first of what will likely be a series of bills addressing the at times indecipherable condition of statutes that grant property tax exemptions to literary, benevolent, charitable, and scientific institutions, among others. The poster child of the problem is ORS 307.130, which has been interpreted in different and inconsistent ways by courts and by county assessors. Last legislative session, OSACA adopted the mantra of “a clear, bright line” to ask the legislature to be more clear about its intentions to qualify certain types of institutions as exempt from property
taxes. Clearly define the characteristics that qualify and the information that must be provided to the assessor to ensure the appropriate determination.

After a legislative work group staffed by the Legislative Revenue Office (LRO) began work, it discovered that the problem of lack of clarity in the exemption statutes was wider and deeper than first thought. Members of the work group announced that the project would span multiple sessions. Nevertheless, there was sufficient information to compile a report of 78 pages (LRO Research Report #3-17; February 13, 2017), which spawned SB 181 as an early work product.

SB 181 requires nonprofit institutions seeking property tax exemption under ORS 307.130 to annually file an information return on or before April 1 preceding each tax year for which the exemption is claimed. It specifies that late filing provisions contained in ORS 307.162 apply to the filing of an information return and contents of the information return. The bill requires the reporting institution to include its most recently required and timely filed Form 990 and Form CT-12 of the reporting institution or link to a version of the form that is publicly available on the internet. It also requires an institution that files a Form 990-N with the Internal Revenue Service to file the information set forth on the Form 990-N filed by institution for the current tax year instead of a Form 990. SB 181A provides that a property will be disqualified from the exemption under ORS 307.130 if the information contained in the return or initial application
for exemption was misleading or false. The bill imposes additional taxes on disqualified property in an amount equal to the property taxes that would have otherwise been imposed had the property not been exempt for up to the five immediately preceding property tax years, plus interest computed at the rate of one and one-third percent per month. It requires the county assessor to provide notice of the information return requirements to all reporting institutions whose property has been granted exemption under ORS 307.130 for the 2017-18 property tax year, and provides late filing of an information return for the initial 2018-19 property tax year. Information returns are kept as public records.

Contributed by: Gil Riddell | AOC Policy Director