OAG 66-74.

• Case Date: May 26, 1966
• Court: Oregon

Oregon Attorney General Opinions 1966. OAG 66-74. 429OPINION NO. 66-74[32 Or. Op. Atty. Gen. 429]Proposed constitutional amendment fixing property tax limitation at amount not to exceed one and one-half percent market value of property affects present taxing procedure in many particulars. Some of the more important features are that it repeals the present six percent limitation, gives the State Tax Commission constitutional power to revise, allocate and adjust local budgets within taxing units and authorizes excess levies for public improvements and public schools. Such excess levies must be approved by the voters of the taxing unit, the majority being not less than 33 percent of the registered electors eligible to vote.No. 6135May 26, 1966Honorable Glen M. StadlerState Senator and Chairman of Legislative Tax Study Committee You have requested on opinion on 20 questions asked by the Legislative Tax Study Committee concerning the proposed one and one-half percent property tax limitation amendment to the Oregon Constitution, petitions for which are now being circulated in order to place it on the ballot for the November 1966 general election. You seek information to aid you in preparing recommendations to the Legislative Assembly. The proposed Act to amend the Constitution repeals all of the present language in § 11 of Article XI (relating to the six percent limitation and elections for tax bases) and substitutes the following therefor: "(1) The total amount of ad valorem taxes, special assessments, fees or other charges which may be levied on the assessment and tax rolls against any real property or personal property in any year shall be limited to one and one-half percent of the market value of such property and the revenue derived therefrom shall be used to defray general and local governmental expenses and the interest accruing on, and the retirement of, existing bonded indebtedness. "(2) In the event any combination of budgets of taxing units would result in an aggregate levy on any property in excess of the levy limitation of subsection (1) of this section, the State Tax Commission is authorized, empowered and directed, in cooperation with said taxing units, so to revise, allocate and adjust the budgets of such taxing units as to bring the aggregate levy within the limitation provided in subsection (1) of this section. The Legislative Assembly may enact legislation to carry out the provisions of this subsection (2). "(3) The limitations provided in subsection (1) of this section shall not apply to any measure for financing a public improvement or for the support of public schools when submitted by a taxing unit to the voters therein at a statewide primary or general election and approved by a majority of the voters voting thereon which must also be not less than thirty-three (33) percent of the registered voters entitled to vote thereon at said election." Your first question is: "1. Would the one and one-half percent limitation be determined before or after the millage relief provided in Chapter 615, Oregon Laws 1965; the senior citizens exemption, also contained in this same chapter; and the inventory tax relief provided in Chapter 604, Oregon Laws 1965?" Subsection (1) of the proposed amendment of Article XI, § 11, provides as follows: "The total amount of ad valorem taxes, special assessments, fees or other charges which may be levied on the assessment and tax rolls against any real property or personal property in any year shall be limited to one and one-half percent of the market value of such property and the revenue derived therefrom shall be used to defray general and local governmental expenses and the interest accruing on, and the retirement of,430 existing bonded indebtedness." (Emphasis supplied) The reason for your question is that subsection (1) of the proposed amendment to Article XI, § 11, of the Oregon Constitution, can be given more than one interpretation. It is therefore necessary to resort to rules of statutory construction to determine the intent of the people in adopting the amendment. A cardinal rule of statutory construction is to give meaning to each word, wherever possible, and, if possible, to give a meaning which is ordinary and usual. One must determine what is meant by the clause "which may be levied on the assessment and tax rolls against any real property or personal property in any year." Does this clause modify "ad valorem taxes, special assessments, fees or other charges" or does it only modify "other charges"? If the latter is the case, we still have not solved the problem because the term "levied" has several possible meanings. Technically, a levy is the legislative act, whether state or local, which determines that the tax shall be laid, and fixes its amount. 3 Cooley, Taxation, § 1012, pp. 2043, 2044 (4th ed., 1924). "Levy" is not akin to "collection." The Oregon Supreme Court, in the case of Yamhill County v. Foster, (1909) 53 Or. 124, 133, 99 P. 286, pointed out that the levying of a tax is a legislative function and not a judicial question which can be changed by a court of equity. In Waterhouse v. Clatsop County, (1907) 50 Or. 176, 178, 91 P. 1083, 1084, and School District No. 1, Multnomah County v. Bingham et al., (1944) 174 Or. 540, 548, 149 P. (2d) 963, the court has observed the distinction between the levy of taxes and their collection and extension on the tax roll. The Oregon Supreme Court has also pointed out that the limitation contained in the present Article XI, § 11, of the Oregon Constitution, is a limit upon the power of the taxing authority to levy a tax and it is not concerned with nor does it impose any limitation upon the assessing authority in fixing assessed valuations. The levy of a tax by the tax-levying body and the process of its assessment and collection are separate, distinct functions in the total process of taxation. Oregon Worsted Company v. State Tax Commission, (1959) 217 Or. 104, 119, 317 P. (2d) 924, 342 P. (2d) 108. It is in this limited, technical sense that the term "levy" is generally used in the statutes. See ORS 294.435, 310.010, 310.020, 310.030, 310.040, 310.050, 310.060, 310.065, 310.070 and 310.090. However, there is a broad definition of the term "levy" as it is commonly understood by a person not familiar with the taxation of property. This difference was pointed out in the case of In re Zoller's Estate, (1961) 53 Del. 448, 171 A. (2d) 375, on p. 379: "* * * The word 'levy' often, and perhaps usually, means the determination to impose the tax, as distinguished from assessment and collection. [Citing cases] But the word is also susceptible of other meanings, dependent upon the context in which it is used, and may refer to all the steps, collectively, by which public revenue is raised, or only to the assessment and collection of the tax. Gray v. Board of School Inspectors, 231 Ill. 63, 83 N.E. 95, 98; Southern Railway v. Kay, 62 S. C. 28, 39 S.E. 785, 786." (Emphasis supplied)In construing the uniformity clause of the Constitution of the State of Delaware, the court imputed to the term "levy" the general broad meaning which includes not only the legislative act of levying the tax in the technical sense of the word but also the aspects of assessment and collection of the tax. As a result, it concluded that the inheritance tax of the State of Delaware was a constitutional tax under the uniformity clause of the state constitution.In reading subsection (1) of the proposed amendment of the Oregon Constitution, one cannot apply the strict definition of the term "levy" to "other charges, fees or special assessments." Technically, only taxes are "levied." Kelly v. Herrall, (D.C. Or. 1884) 20 F. 364, 369. A review of the statutes indicates that ad valorem taxes are levied as set forth in ORS 294.435 and sections of ORS chapter 310 which are cited above; that eastside emergency fire suppression costs are levied pursuant to ORS 477.930, 477.940 and 477.960; that county drainage road district taxes on a per acreage basis are levied pursuant to ORS 371.065; that fire patrol costs are levied on a per acreage basis under ORS 477.270; and that highway lighting district costs are levied on a front-foot basis pursuant to ORS 372.170 and 372.180. There are approximately 11 other types of charges or fees which are placed on the assessment roll which, pursuant to statue, are not "levied." Most of these other statutes require that the dollar amount be determined and assessed against the particular property on a benefit basis. The charges are certified to the assessor and entered on the roll as a charge or assessment against the particular property. Thus, under the statutes, the only other taxes or charges (other than true ad valorem taxes) which are levied are those imposed either on acreage basis or on 431a front footage basis. All the other charges are certified to the assessor (but are not levied), pursuant to the statutes permitting the particular districts to impose the charges. Therefore, since a more logical meaning to "which may be levied" would be to use it to modify "ad valorem taxes, special assessments, fees or other charges," it is my conclusion that this clause modifies all of the items enumerated in the first part of the sentence in subsection (1) and that in order for it to apply to all of these items, the term "levied" must be applied in its broader meaning. When this broader meaning is applied, it becomes obvious that the framers of the...