Oregon Advisory Opinions April 09, 1987: OAG 87-6 (April 9, 1987)

OAG 87-6.

In 1985 the City of Portland proposed to annex several unincorporated areas under ORS 199.490(2), the so-called "triple majority" statute. The Portland Metropolitan Area Local Government Boundary Commission adopted orders approving the proposed annexations. ORS 199.495 dispenses with the usual requirement that an election be held in the affected area if the triple majorities of landowners, property value and land area are represented in the petition for annexation. The commission's orders, however, were subject to judicial review pursuant to ORS 199.461(4). Residents of the affected areas petitioned for judicial review of the orders in the Court of Appeals. In Mid-County Future Alt. v. Metro. Area LGBC, 82 Or App 193, 728 P2d 63 (1986), modified and adhered to, 83 Or App 552, 733 P2d 451 (1987), the court declared that ORS 199.495(1), which provides that a "triple majority" annexation is not subject to an election, is unconstitutional. The court ordered the boundary commission to set aside its orders approving the annexations.

The Multnomah County Assessor had recognized all of the disputed boundary changes after the boundary commission filed its orders pursuant to

ORS 199.461(5) and filed the proper map and legal description under ORS 308.225. The assessor has extended the City of Portland's tax levies for 1985-86 and 1986-87 against the property located in the annexed areas. The local government boundary commission has filed petitions for review of the decision of the Oregon Court of Appeals with the Oregon Supreme Court. Those petitions are currently pending.

ORS 308.221 requires the county assessor each year to establish code areas showing the various combinations of taxing agencies to which each piece of property in the county is subject. To establish code areas the assessor must determine the boundaries of each taxing district in the county for the ensuing fiscal year. ORS 308.225 directs the assessor to disregard boundary changes occurring prior to the beginning of the next fiscal year unless the body making the determination that the boundary change is "final" files a legal description and map of the boundary change with the assessor "in final approved form" before March 31. ORS 308.225(2)(a).

The assessor has asked the Department of Revenue whether the assessor properly recognized the annexations in question in 1985, when the boundary commission filed the map and legal description under ORS 308.225, even though the annexation orders were in dispute in court. The answer to this question requires a determination, first, of when the boundary changes were "final" for purposes of ORS 308.225, and second, of when a map of boundary changes is in "final approved form" under ORS 308.225(1) and (2)(a).

ORS 308.225 provides in pertinent part:

"(1) In preparing the assessment roll in any year, a county assessor shall disregard changes or proposed changes described in subsections (3) and (4) of this section in the boundary lines of any taxing district levying ad valorem taxes if the description and map showing changes or proposed changes are not filed in final approved form, in accordance with and at the time required by subsection (2) of this section.

"(2)(a) If a boundary change is made or proposed, the person, governing body, officer, administrative agency or court making the determination that the boundary change is final shall file with the county assessor and the Department of Revenue the legal description of the boundary change or proposed change and an accurate map showing the change or proposed change in final approved form, prior to the next March 31.

". . . .

"(5) Each description and map filed under subsection (2) of this section shall be submitted to the Department of Revenue and approved or disapproved within 30 days of receipt." (Emphasis added.)

The assessor properly recognized the City of Portland boundary changes in 1985 unless ORS 308.225 requires the assessor to disregard such changes while they are subject to judicial review. For the reasons given below, we believe that the boundary changes were "final" within the meaning of ORS 308.225(2)(a) even though they were (and at this writing still are) subject to judicial review.

ORS 308.225 as it presently exists is the product of several distinct acts of the legislature. It has been amended six times since 1965. The legislature added subsection (2)(a) in 1969. See Or Laws 1969, ch 151, § 1. At that time, virtually all boundary changes required approval of the voters in the affected areas. The results of those elections were to be proclaimed and the boundary change approved by a legislative or administrative body, such as the city(fn1); a county board(fn2); a county court(fn3); or a local government boundary commission(fn4). Annexations were final and effective upon entry of the order of the legislative or administrative body approving the annexation or boundary change.(fn5)

When ORS 308.225(2)(a) became law, there was no express provision for judicial review of boundary changes. Accordingly, the word "court" in subsection (2)(a) necessarily refers not to a court of law, but rather to a county governing body, that is, a county court. We therefore construe "final" in subsection (2)(a) to mean "final and effective" as determined by the legislative or administrative body with jurisdiction to approve a boundary change in accordance with the annexation statutes then in effect. A boundary change thus is "final" for assessment purposes notwithstanding the pendency of judicial review under ORS 199.461(4).

Next we must determine when a map of a boundary change is in "final approved form," ORS 308.225(1) and (2)(a), requiring the assessor to give effect to the boundary change where the body making the determination that the boundary change is "final" files the map in "final approved form" before March 31.

In 1975 the legislature added to ORS 308.225 significant requirements concerning the quality and characteristics of the map showing the boundary change, which was to be filed "in final approved form" with the county assessor for purposes of taxation and assessment. See Or Laws 1975, ch 595, § 1. Based upon the legislative history of those amendments we conclude that "final approved form" refers to approval of the map and description by the Department of Revenue under subsection (5) and not to the finality of the boundary change reflected therein.

As initially introduced, Senate Bill 683 (1975 Legislative Session) amended ORS 308.225 to provide that if a description and map were certified by a

registered land surveyor or registered engineer as meeting the requirements of the proposed bill with respect to the characteristics of the map, "the department's approval under subsection (5) is not necessary, and the filing shall be considered as in final approved form. " (Emphasis added.) Subsequent amendments to the bill deleted this language from the measure, because the Department of Revenue and county assessors retained the responsibility to develop the proper form of map upon which the boundary change was to be indicated. Nevertheless, the deleted language demonstrates that the legislature intended the Department of Revenue to determine whether the map and description were in "final approved form," see ORS 308.225(5), and did not intend that the boundary change itself must receive final judicial approval before the assessor could recognize it for tax purposes. See SB 683, 1975 Regular Session, as introduced and as amended by the Senate, April 25, 1975.

Therefore, we interpret the provisions of ORS 308.225(1) that require that the assessor disregard boundary changes "if the description and map showing changes or proposed changes are not filed in final approved form" prior to March 31, to refer only to approval as to form and style of the map and description by the Department of Revenue.

We understand that, upon approving the boundary changes at issue, the boundary commission filed with the assessor its final orders approving the boundary changes and the description and maps showing the boundary changes in final approved form, as required by ORS 199.461(5) and 308.225(1). On the basis of our preceding discussion, we conclude that the assessor properly recognized the boundary changes for property tax purposes, and properly assessed and collected taxes extended against property within the annexed areas after that time.

ORS 199.495(1) establishes the effective date of an order of the local government boundary commission approving a triple majority annexation, as follows:

"If the proposed annexation is approved by the commission, the final order shall be effective at the time specified in the final order except that the effective date shall not be more than one year after the date the final order is adopted. If no effective date is specified in the final order, the order shall take effect on the date the order is adopted. The order shall not be subject to ORS 199.505."(fn6)

Under ORS 199.495, the commission's order approving a boundary change initiated under the "triple majority" statute is final and effective on the date of adoption of the order. ORS 199.461(5) requires the commission to file a copy of its "final order" with the Secretary of State, the Department of Revenue, the

assessor and the county clerk of each county in which the affected territory is located, immediately after the effective date of the final order approving a boundary change. It appears that the purpose of this statute is to direct the commission to comply with the filing requirements of ORS 308.225, despite ORS 199.461(4), which provides for judicial review of final orders of the commission pursuant to the Administrative Procedure Act.

ORS 183.482 governs judicial review of final orders of the boundary commission approving boundary changes. The filing of a petition for judicial review does not automatically stay enforcement of the commission's order. ORS 183.482(3)(a). The commission, however, has authority to stay its action. ORS 183.482(3). We understand that the petitioners in Mid-County Future Alt. v. Metro. Area LGBC did not ask the boundary commission for a stay pending judicial review of its orders approving the annexations. Therefore, the boundary commission's orders remained in effect pending the Court of Appeals' decision.

After consideration of the appeal, the Court of Appeals issued its opinion declaring ORS 199.495(1) unconstitutional. As noted above, the boundary commission has filed a petition for review of the Court of Appeals' decision with the Oregon Supreme Court. Oregon Rules of Appellate Procedure (ORAP) 11.03 prescribes the effect of the Court of Appeals' opinion pending review by the Supreme Court, as follows:

"(2) The decision of the Supreme Court or Court of Appeals is effective:

". . . .

"(b) With respect to judicial review of administrative agency proceedings, on the date that the Administrator sends a copy of the appellate judgment to the administrative agency, unless the court orders otherwise.

". . . .

"(3) The Administrator shall enter the original and send copies of the appellate judgment as soon as possible after the court has filed its decision, provided that:

"(a) With respect to a decision of the Court of Appeals, the Administrator shall not issue the appellate judgment for a period of 35 days after the date of decision to permit a party to petition the Supreme Court for review . . . . The filing of a petition for review shall stay issuance of the appellate judgment . . . ." (Emphasis added.)

If the Court of Appeals' decision is sustained, and the State Court Administrator issues an appellate judgment, the Supreme Court or Court of

Appeals may direct the boundary commission to set aside its orders or direct some other form of relief. Insufficient time remains for the court to issue an enforceable appellate judgment before March 31.(fn7) The assessor must, therefore, continue to include the annexed property on the 1987-88 assessment roll in compliance with ORS 308.225; any change in the boundaries as the result of an enforceable appellate judgment will become effective for the 1988-89 tax year.(fn8)

The conclusions expressed in this opinion are contrary to the conclusions expressed in 41 Op Atty Gen 99 (1980). To the extent of the inconsistency, this office no longer subscribes to the position set forth in the prior opinion.

1 See ORS 222.170, 1969 Replacement Part.

2 See ORS chs 264, 450, 478 and 552, 1969 Replacement Parts.

3 See ORS chs 265, 266, 371, 372, 451, 452, 545, 547 and 553, 1969 Replacement Parts.

4 See ORS 199.505, 1969 Replacement Part.

5 See ORS 199.505, 222.160, 264.511, 265.170, 450.225, 451.562, 552.810 and 553.070, 1969 Replacement Parts.

6 ORS 199.505 requires an election on the question of the boundary change if written objections are filed within 45 days after the date of the adoption of the commission's order.

7 The 21-day period to request rehearing from denial of a petition for review will extend past March 31. See ORAP 11.03(3)(b)(i).

8 At this time we do not express an opinion whether an appellate judgment ordering the boundary commission to set aside its final orders would give rise to refund claims under ORS 311.806. This issue may be the subject of litigation, and will not be presented squarely unless and until the Court of Appeals opinion is affirmed.