Comcast Corp. III v. Dept. of Rev. (TC 4909)

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).