Oregon Advisory Opinions June 16, 1971: OAG 71-50 (June 16, 1971)

OAG 71-50.

In 1969, the legislature enacted legislation shifting a substantial part of the burden of welfare costs from the counties of Oregon to the state. Chapter 45 [1969] Oregon Laws 88. In section 8 of the Act, the legislature in effect eliminated amounts levied by the counties for welfare purposes in the year 1967 from the county tax bases, and froze the amount which could be levied

for three fiscal years; i.e., 1969-70, 1970-71 and 1971-72.(fn1)

The 1971 legislature, however, has amended section 8 of the 1961 Act to eliminate the tax levy freeze for 1971-72; that is, to permit a levy under Article XI, Section 11(2) (a) of the Oregon Constitution without voter approval, equaling the highest tax levy of the previous three years, including amounts levied for welfare purposes, plus six percent. Chapter 39 [1971] Oregon Laws 55 (Enrolled House Bill 1333) provides as follows:

"Section 1. Section 8, Chapter 45, Oregon Laws 1969, is amended to read:

"Sec. 8. For each of the fiscal years 1969-70 [,] and 1970-71 [and 1971-1972], except where a new tax base has been adopted for any such year after July 1, 1969, . . . a county shall not levy within its tax base more than an amount equal to its base for the year, reduced by subtracting an amount equal to the amount the county levied in 1967 for public assistance purposes. . . .

" Section 2. Notwithstanding the provisions of any other law, the amendments contained in this 1971 Act shall apply to taxes levied for the fiscal year beginning July 1, 1971." (Bracketed material is deleted from the original Act, and underscored material is added to it by the 1971 Act).

Since the Act does not have an emergency clause it takes effect 90 days after the close of the 1971 legislative session, i.e., on September 9, 1971. Or. Const. art. IV, § 28. However, the amendment to section 8 of the 1969 Act, deleting all references to the 1971-72 fiscal year, and section 2 of the 1971 Act, both make it clear that the 1971 Act is intended to apply to the fiscal

year beginning on July 1, 1971, 69 days before the Act becomes effective, and that the restrictions of the 1969 Act are not intended to apply to that fiscal year. To that extent the Act's effect is retroactive.

It is clear under the Oregon cases that retroactive provisions in taxing statutes are proper. Collins v. State Tax Comm. , 3 OTR 275 (1968); Fisher v. City of Astoria , 126 Or. 268, 286, 269 P. 855, 859 (1928). The prohibition in Article I, Section 21 of the Oregon Constitution against ex post facto laws applies only to statutes that are criminal in nature. In re Idleman's Commitment , 146 Or. 13, 27, 27 P.2d 305, 310 (1933); Fisher v. City of Astoria , supra . As stated by the United States Supreme Court in Welch v. Henry , 305 US 134 (1938):

"Taxation is neither a penalty imposed on the taxpayer nor a liability which he assumes by contract. It is but a way of apportioning the cost of government on those who in some measure wish to enjoy its benefits and must bear its burdens. Since no citizen enjoys immunity from that burden, its retroactive imposition does not necessarily infringe due process, and to challenge the present tax it is not enough to point out that the taxable event, the receipt of income, antedated the statute." 305 U.S. at 146.

It may also be asserted that Article IX, Section 1a of the Oregon Constitution, which prohibits use of the emergency clause in any act regulating taxation, should be construed to prohibit enacting a tax statute with retroactive effect. This would assume that since a statute regulating taxation cannot take effect until 90 days after adjournment of the legislative session, permitting it to have retroactive application would be an improper evasion of

the purpose of Article IX, Section 1a.

The purpose of this provision, however, is to preserve the right of the voters to the referendum, and to prevent the legislature from frustrating that right with respect to tax measures. Article IX, Section 1a has never been held to limit the legislature's right to give a tax measure retrospective application.

The deadline for delivery to the tax collector of the assessment roll for the 1971-1972 tax year is October 15, a full month after the effective date of the Act. ORS 311.115. Taxes are likewise not due until November 15. However, the county's budgeting and determination of the amount of the levy must be completed well in advance of those dates, and in advance of the effective date of the Act. It is clear that the counties are entitled to rely upon Ch. 39 [1971] Oregon Laws in their budget work, however, even in advance of the effective date of the Act, since it will be in effect before the assessment roll is filed. This does not differ in concept from the acts of the Governor in screening candidates for an appointive position before the effective date of the measure creating the position, so that he will be able to make an appointment on the effective date.

It is therefore our opinion that the counties may proceed with their budgeting and determination of a levy for the 1971-1972 fiscal year on the basis of the law which will be in

effect after the effective date of Ch. 39 [1971] Oregon Laws 55, just as though the Act were already in effect.

1 The "freeze" did not affect counties which had no levy for welfare purposes in 1967.