Oregon Advisory Opinions September 19, 1958: OAG 58-141 (September 19, 1958)

OAG 58-141.

This is in response to your request for an opinion as to the application of Article XI, § 11, of the Oregon Constitution, under the following facts:

The Port of Brookings was ORGAnized in 1956 under the provisions of ORS chapter 777. Following the appointment of the first port commissioners by the Governor in October 1956, the port commissioners adopted a budget and levied and collected their first tax in the 1957-1958 tax year without holding any election within the district to vote a levy or to establish a tax base. The question has now arisen (during the preparation of the budget for the 1958-1959 tax year) as to whether or not the 1952 amendment of Article XI, § 11, of the Oregon Constitution, requires the Port District of Brookings, before levying any taxes, first to hold an election within the district to vote a special levy or to vote to establish a tax base.

Prior to the 1952 amendment of Article XI, § 11, Oregon Constitution, the opinions of the Attorney General consistently held that a newly created district had the power to levy a tax during the first year of its existence and was not subject to the six percent limitation of Article XI, § 11, "because there is no levy of the preceding year upon which such limitations could be based." Opinions of the Attorney General, 1922-1924, p. 24; 1938-1940, p. 640; 1944-1946, p. 91. Doubt might be cast on this conclusion when note is taken that Article XI, § 11, during the years involved, prohibited the exercise of the power to levy "in any year" in excess of the total amount levied in the preceding year (prior to 1932) or any one of the preceding three years (after 1931). The plain language of "any year" would be inclusive of the first year.

However, unless the quoted words were read as meaning "in any year but the first year of a new taxing entity," a latent absurdity arose; i.e., if the six percent limitation had been imposed on a new taxing district in its first year, it would never be able to levy any taxes except by special elections in each year throughout its existence. And as to such new districts, the six percent limitation would never apply (even though this was a major reason for enactment of the section), since no regular levy could ever be imposed. The opinions cited above can therefore be defended on the accepted general canon of construction that if a suggested interpretation would lead to unreasonable results, courts will reject it in favor of a workable interpretation. Northern Wasco County People's Utility District v. Wasco County, 210 Or. 1, 18; Keyes v. Chambers, 209 Or. 640, 662; Semler v. Cook-Waite Laboratories, Inc., 203 Or. 139, 153.

A new situation is presented by the amendment to Article XI, § 11, made by popular vote November 4, 1952. See opinion of the Attorney General No. 3612. Stripped of immaterial words (for the purposes of the present question), the pertinent part now reads:

"* * * no taxing unit * * * shall in any year so exercise that power [to levy tax] as to raise a greater amount of revenue * * *

As stated by the court in School District No. 1 v. Bingham, (1955) 204 Or. 601, 611:

"In construing the constitution the presumption and legal intendment are that every word, clause and sentence therein have been inserted for some useful purpose. * * *"

By amending the Constitution, the people demonstrated an intent to change the preexisting law, and the presumption must be that they intended to change the meaning of Article XI, § 11, in all particulars wherein there is a material change in the language of the amended section. See Rieger v. Harrington, 102 Or. 603, 613. The amended section must be studied anew, applying rules of statutory construction only as required.

The most significant new words in the section, from the standpoint of a newly created tax district, are the words "tax base." Even a new district must now have a tax base unless it wishes to rely on special tax elections. Since it manifestly cannot obtain such a base under (a), its only recourse to obtain a base is through the election provided by (b). Former opinions of this office, ruling that the six percent limitation of (a) does not apply to new tax districts, are no longer applicable, since those opinions were written at a time when a new taxing district was not required to have a tax base as a prerequisite to a levy. Further, the words "in any year" (now reinforced in the amended section by the added phrase "for any given year") can no longer be disregarded in the case of a new taxing district on the ground that their use leads to an absurd result, for the reason that the addition of (b) makes provision for a feasible alternative. Since there is no longer ground to disregard "in any year," and it is now reinforced with "for any year," these words must be taken into account and given their natural and ordinary meaning. See Blalock v. City of Portland, 206 Or. 74, 80.

It is my opinion, therefore, that since 1952 a newly created port district can legally levy general taxes in the first instance only (1) after an election to establish a tax base pursuant to Article XI, § 11, or (2) after a special election pursuant to ORS 777.605 et seq.