When Oregon's Measure 47 capped property taxes in 1997, did the cap apply to taxes a city had already pledged to repay its bonds, or were those bond taxes still exempt from the cap?

exist at the time section 11g was approved. Accordingly, it makes sense that "new" ad valorem property taxes, for
purposes of the special voting requirements of section 11g(3)(a), would be understood to mean "new kinds" of taxes.
We addressed a similar issue in 44 Op Atty Gen 85 (1984), in answering questions related to another property tax
limitation measure, Ballot Measure 2 (1984). That measure, like the present one, required that special voting requirements
be met before imposition of any "new tax", stating:
(6)(a) Notwithstanding subsection (1), from and after the effective date of this amendment, the State * * *
or other taxing unit of or within the state may increase a tax rate or special assessment or may levy a new
tax or special assessment, if such action would cause an increase in governmental revenues, only by a
majority vote of the legal voters of the taxing unit voting on the question, provided that at least fifty (50%)
of the legal voters of the taxing unit vote on the question.
(Emphasis added.) Interpreting whether these words required specific voter authorization for a district to levy property
taxes, either pursuant to a new tax base or outside the existing tax base, we concluded:
Such a tax may be levied without complying with subsection (6) if it neither imposes a new tax nor
increases the rate of an existing tax, or if it does not increase governmental revenues. * * *

• • • an annual general purpose levy to meet expenses of a taxing unit is not a "new" tax each time it is
      authorized. A new kind of tax, such as motel tax; a tax for a new special purpose, such as a special levy for
      law enforcement purposes; or a tax made newly applicable to property or persons formerly exempt, is
      probably a new tax * * * . Even a new tax base, we conclude, is not a new tax, since it simply raises money
      in the same way for the same purpose against the same property as the previous annual levies.
      44 Op Atty Gen at 187.
      We see no reason to depart from the foregoing analysis in the course of interpreting the similar provision found in Article
      XI, section 11g(3)(a). Thus, we conclude that, for purposes of section 11g(3)(a), a "new" ad valorem property tax is a new
      kind of tax that is legally authorized after the effective date of section 11g, not merely another iteration of an existing tax,
      such as a new serial levy to replace a levy that is expiring, or a one-year or continuing levy within a growing tax base.
      However, we caution that the courts might conclude otherwise, finding every new levy of an ad valorem property tax is a
      "new" tax that requires voter approval, irrespective of previous impositions of such taxes for the same purposes or with the
      same scope.
      B. "Additional" Taxes
      You next ask what is an "additional" tax for purposes of section 11g(3)(a). We conclude that this is a tax that is in addition
      to the amount of tax that may be imposed under the limits of section 11g(1) and (2).
      As with the term "new," in order to understand the meaning of "additional," it is necessary to identify the reference being
      used for purposes of comparison. The question is: "Additional to what?" There is nothing specific in either the text or the
      context of section 11g to suggest that "additional" taxes are those that are "in addition to existing taxes" or "in addition to
      the amount of existing taxes." The first interpretation would seem to be adequately covered by the meaning of the
      expression "new taxes." The latter interpretation would require voter approval even if the "additional" taxes were under the
      limitations of section 11g(1) and (2). Thus, it also does not seem to advance the general intent of section 11g.
      However, the context does suggest an alternative. Evidence of what the voters intended by the word "additional" in section
      11g(3)(a) is found in section 11g(1) and (2), the provisions that prescribe the limitations on ad valorem property taxes for
      tax year 1997-98 and thereafter. Each of those limitations applies "except as provided in subsections (3), (4), and (5)." This
      language implies that "additional" means in addition to the taxes that otherwise can be imposed under section 11g.
      We reached a conclusion consistent with this interpretation in a letter dated October 17, 1996, to Richard Munn, Director,
      Department of Revenue, from Thomas A. Balmer, Deputy Attorney General. In that letter, we concluded that, under
      section 11g(3)(a), voters could approve the levy of ad valorem property taxes that exceed the three percent limitation on
      the growth of such taxes prescribed in sections 11g(2). This conclusion was based on the rule of construction that all words
      in a constitutional provision must be given effect if possible; the words in this instance being "except as provided in
      subsection[ ] (3)," which are found in both section 11g(1) and (2).
      Thus, the word "additional" in section 11g(3)(a) refers to the those taxes that are "in addition to" those that may be
      imposed under the limitations of section 11g(1) and (2).(23) The voters may approve such "additional" taxes, subject to the

special voting requirements of section 11g(3)(a).
C. Application of "New" to Specific Examples
You also ask whether, for purposes of section 11g(3)(a), certain taxes should be considered "new" ad valorem property
taxes. Based upon our analysis above, we address each of the specific taxes identified in your question.
A new levy of an existing kind of property tax would not be a "new" tax; instead, it is merely another iteration of a tax
already authorized by law. For purposes of section 11g(3)(a), "new" taxes would not include a new serial levy to replace a
levy that is expiring, another operating levy within a growing tax base or a new continuing levy, these levies are authorized
to raise money in the same way, for the same general purposes and against the same properties as authorized under
existing law. See 44 Op Atty Gen 85, 187 (1984).
Similarly, a tax approved by the voters before December 5, 1996, but levied on or after that date, would be an existing tax,
not a "new" tax. This is not a "new" tax because the taxing district had legal authority to impose the taxes by virtue of the
voter approval.
"New" tax does not include a tax that is levied on or after December 5, 1996, to repay bonds issued without voter approval
before that date, provided the legal authority to impose the tax for payment of that bonded indebtedness existed prior to
December 5, 1996. Again, it is not a new "kind" of tax; rather, it is just another iteration of a previously authorized tax.
In your question you provided, as examples of bonds issued before the effective date of section 11g without voter
approval, local improvement district bonds, special assessment bonds and a $13 million retirement bond levy (presumably
to fund pension benefits). Because you did not specifically describe or identify particular bonds that were issued before the
effective date, we assume that your question is a general one.
We are aware of no feature peculiar to local improvement district bonds, special assessment bonds or bonds issued to fund
pension benefits that would change our conclusion. Taxes to pay such bonds are not "new" for purposes of section
11g(3)(a) if, prior to December 5, 1996, there was full legal authority to impose the taxes. Although, special assessment
bonds generally require voter approval, see, e.g., ORS 225.360 (city irrigation and fire protection), 476.330 (county fire
protection), assuming any such laws authorized bonds without voter approval prior to December 5, 1996, if the law also
authorized the imposition of ad valorem property taxes to pay those bonds, the taxes would not be "new." For example,
ORS 223.235(4) expressly authorizes the government unit that has issued Bancroft bonds for local improvements, under
ORS 223.205 and 223.210 to 223.295, to levy and collect the tax for the payment of the bonds, notwithstanding that the
question of the issuance of the specific bonds has not been approved by the voters. Another example is ORS 238.685,
which expressly authorizes school districts that are being integrated into the Public Employes' Retirement System to pay
part or all of their unfunded obligation to the system with the proceeds of general obligation bonds issued for such
purposes. ORS 238.685(2)(a) provides that, to the extent the bonded indebtedness is to be repaid from property tax levy
revenues, the levy is to be divided so that one part equals the amount necessary to pay bond principal and interest. This,
too, is not a "new" tax.
Likewise, increases in urban renewal ad valorem property taxes arising after December 5, 1996, are not "new" taxes
requiring voter approval under section 11g(3)(a), unless the increases are due to a change on or after that date in the laws
that impose the tax or a change in the urban renewal plan upon which the tax is based. Because the mechanics of tax
increment financing of urban renewal were thoroughly discussed in 44 Op Atty Gen at 134-35, 136-43 and Op Atty Gen
No. 8243, at 16, there is no need for lengthy explanation here. For present purposes, the critical fact noted in these earlier
opinions is that tax increment revenues are imposed under existing law, Article IX, section 1(c), of the Oregon
Constitution and ORS chapter 457. Under that law, urban renewal taxes are imposed on properties upon the adoption of an
urban renewal plan and are extended over new territory by an amendment to that plan that changes the boundary. See ORS
457.430.
Therefore, increases in such taxes that arise merely from the appreciating value of the property within the urban renewal
area are not "new" taxes for purposes of section 11g(3)(a). On the other hand, any tax increase resulting from an
amendment of the urban renewal law that changed its purposes or made its taxes newly applicable to persons or property
that were formerly exempt, such as a boundary change, would be a "new" tax for purposes of section 11g(3)(a). Such
"new" taxes would require voter approval in accordance with that provision.
D. Application of "Additional" to Specific Examples

You also ask whether any of the foregoing examples of taxes would be "additional" taxes for purposes of section
11g(3)(a). To answer this question, we note that the limitations of section 11g(1) and (2) apply to the total ad valorem
taxes on each property, not to tax levies themselves. Thus, we conclude that each of the taxes you describe would be
"additional" taxes for purposes of section 11g(3)(a) to the extent they are part of a total amount of ad valorem property
taxes imposed on a property that would exceed the limitations of section 11g(1) or (2). As discussed in Part I of this
opinion, those limitations do not apply to taxes to pay bonded indebtedness. Therefore, taxes to pay bonded indebtedness
are not added to the total taxes imposed on a property to determine whether the limitations of section 11g(1) or (2) apply.
Because bond taxes are not part of that total amount, they could never be "additional" to the taxes imposed under the
limitations.
V. Increases in Urban Renewal Taxes
Your next question asks how the voter approval requirements of section 11g(3)(a) apply to increases in urban renewal ad
valorem taxes. We conclude that increases of urban renewal taxes that are "new" or "additional" require voter approval
under section 11g(3)(a). Because neither section 11g nor current law provides for such elections, however, implementing
legislation will be necessary if such approving elections are to be held.
Section 11g(3)(a) provides:
On or after the effective date of this section, there shall be no new or additional ad valorem property tax
levied against real property, unless the question of the levy has been approved by not less than fifty percent
(50%) of voters voting in a general election in an even numbered year, or other election in which not less
than fifty (50%) of the registered voters eligible to vote on the question cast a ballot.
The applicability of these requirements to increases in urban renewal taxes hinges on the meaning of the words "ad
valorem property tax," "new" and "additional," and "levy" in section 11g(3)(a), and also upon the mechanism by which
urban renewal taxes can be increased. We discussed the meaning of "new" and "additional" in Part IV of this opinion.
A. Ad Valorem Property Taxes
We have not yet considered the specific meaning of the expression "ad valorem property tax" in the context of section
11g.(24) The constitutional amendment itself provides no definition of this expression.(25) Therefore, we turn to judicially
developed principles of construction.
Of course, the voters' intent governs. In this instance, "ad valorem" has a well established meaning in the context of
property taxation. Webster's International, at 30, provides this general definition:
2 : of a property tax : levied according to assessed value
In 44 Op Atty Gen 85, 141 (1984), quoting from Ampco Printing - Adv. Offset Corp. v. City of New York, 197 NE 2d
285, 288 (NY 1964), we stated:
"Ad valorem" means "according to the value" and is used "to designate an assessment of taxes against
property at a certain rate upon its value. An ad valorem property tax is always based upon ownership of
property and is payable regardless of whether the property is used or not.
This definition is consistent with the "context" of section 11g, which includes the existing system of property taxation, and
the common meaning of these words at the time section 11g was enacted. Although, there is no general definition of "ad
valorem property tax" in state statute, all such taxes are subject to ORS 310.090, which provides, in relevant part:
Subject to ORS 310.070, the county assessor shall compute the rate of ad valorem levy for each taxing
district by dividing the district's net levy for each category of taxes described in ORS 310.150 by the
assessed value [of the taxable property] used to compute the tax rate.
Accordingly, we conclude that, in enacting section 11g, the voters understood "ad valorem property tax" to mean a tax on
property that is calculated according to the assessed value of that property.
B. Tax Increment Financing for Urban Renewal
As noted in Op Atty Gen No. 8243, at 16, we have previously discussed at length the manner in which tax increment
revenue is collected from the taxes imposed on property located within an urban renewal district. See 46 Op Atty Gen 388,

429-30 (1990) and 44 Op Atty Gen 85, 136-37 (1984). Therefore, we will only summarize the mechanism here.
The urban renewal agency of a city or county may adopt an urban renewal plan, which causes the assessor to "freeze" the
real market values of taxable property within a "blighted" urban renewal area at the time the plan was adopted. See ORS
457.430. The assessor computes the tax rate that is necessary to generate the taxes of each taxing district in which all or a
part of the urban renewal area is located, by using only the "frozen" value of the property in the plan area when calculating
the tax rate of each taxing district. See ORS 457.440(5)(a). Once the district rates are calculated, an urban renewal tax is
calculated from those rates (each district's excess value times that district's tax rate). The urban renewal revenue is then
turned into a type of "levy" amount. This "levy amount" is divided by the value of the "shared property" of the taxing
district and the urban renewal agency in order to calculate an urban renewal tax rate for that district. The taxing district rate
on the "shared property" is lowered by subtracting the urban renewal tax rate from the taxing district rate. This lower tax
rate is then applied to the current real market value of all of the "shared property," and the urban renewal rate is also
applied to the current real market value of all of the "shared property." Revenue generated from the district tax rate goes to
the taxing district, revenue generated from the urban renewal rate goes to the urban renewal agency.
Accordingly, "tax increment" revenues for urban renewal are a form of ad valorem tax on property.
C. "Levied" for purpose of Section 11g(3)(a)
We next consider whether urban renewal taxes are "levied" for purposes of section 11g(3)(a), which by its terms applies to
certain ad valorem property tax "levies." In Part I C of this opinion, we discussed the meaning of the term "levy" for
purposes of section 11g(1) and (2). We concluded that the general meaning of the term includes "the political decision to
raise an amount of revenue from taxpayers by a specified formula." See p. 11, quoting Dennehy v. Dept. of Revenue, 305
Or 595 at 602. However, for purposes of interpreting section 11g(1) and (2), it was not necessary to consider how that
general definition would apply to tax increment revenues generated by urban renewal plans. Because of the relatively
unique nature of urban renewal taxes, we believe it is appropriate to include a separate analysis in this section of when
those taxes are "levied."
In 32 Op Atty Gen 429, 430 (1966), we interpreted "levied" in the context of a proposed constitutional limitation of total
property taxes to one and one-half percent of "true cash value" of the property. First we noted: "Technically, a levy is the
legislative act, whether state or local, which determines that the tax shall be laid, and fixes its amount." Id. However, that
is not the only definition.
The word "levy" often, and perhaps, usually, means the determination to impose the tax, as distinguished
from assessment and collection. But the word is also susceptible of other meanings, dependent upon the
context in which it is used, and may refer to all the steps, collectively, by which public revenue is raised, or
only to the assessment and collection of the tax.
Id. at 430 (citations omitted) (quoting from In re Zoller's Estate, 171 A2d 375, 379 (Del 1961)). We concluded that, when
this broader meaning was applied to the one and one-half percent property tax limitation, it was clear that the framers of
that limitation "intended to limit the total amount of the billing which is made against a given piece of real property." Id.
at 431.
We see evidence of a similar intent to limit the total ad valorem taxes on property in the limitations of section 11g(1) and
11g(2) and, as noted above, we interpret the voting requirements of 11g(3)(a) consistent with that intent. Specifically, the
aim of section 11g is to limit all ad valorem property taxes.
In Dennehy v. Dept. of Rev., 305 Or 595, 756 P2d 13 (1988), the court considered the issue whether urban renewal taxes
were to be considered in determining whether total taxes were within the tax base, for purposes of Article XI, section 11,
of the Oregon Constitution and, if so, which government's tax base, the city that created the urban renewal agency or the
state that authorized the tax increment financing for that agency. The defendant argued, among other things, that the taxes
resulting from the increased property values in the urban renewal area are not "levied," because the amount is uncertain.
Id. at 601. The court ultimately decided that urban renewal revenues are not subject to the tax base limitation because those
revenues were akin to special assessments, "to which Article XI, section 11, has been held not to apply." 305 Or 603.
However, the court offered these valuable observations concerning whether urban renewal taxes were "levied":
If to "levy" a tax, as distinct from "collecting" a tax, means the political decision to raise an amount of
revenue from taxpayers by a specified formula, see Black's Law Dictionary 816 (5th ed 1979), that decision
was not made by the state when it made available the statutory means of undertaking redevelopment or
urban renewal projects. It was not made by taxing units that did not participate in the decision to undertake

such a project but only reported for their own budgets. If it were necessary to identify the taxing unit that
made the political decision constituting the "levy" on the increased property values in the urban renewal
area, it would be the governmental body that decides to create the redevelopment agency and to undertake
the project with the revenue so obtained * * *. ORS 457.035, 457.045, 457.095.
Id. at 602-603.
Based on the foregoing, we believe the courts will take a broad view of "levied," for purposes of section 11g(3)(a), as
including all of the means by which the ad valorem property tax revenues are raised. Thus, for purposes of section
11g(3)(a), urban renewal taxes are "levied" if and when the city or county adopts or modifies an urban renewal plan which,
respectively, generates or increases tax increment revenues.
D. Increases in Urban Renewal Taxes Requiring Voter Approval
As noted above, section 11g(3)(a) requires voter approval of all "new" or "additional" ad valorem property tax levies
against real property. Given our interpretation of "additional" taxes in Part IV of this opinion, urban renewal taxes that
exceed the limitations in section 11g(1) or (2) would be "additional" taxes and would require voter approval under section
11g(3)(a). Similarly, given our interpretation of "new" taxes, urban renewal taxes generated by a new or amended law or
by newly authorized urban renewal plan or from an amendment to an urban renewal plan would be "new" taxes, requiring
voter approval under section 11g(3)(a).
Because urban renewal bonds are not voter approved under current law, it is not possible that taxes to pay those bonds
could satisfy the exception to voter approval found in section 11g(3)(b). Therefore, all "new" urban renewal taxes would
require voter approval under section 11g(3)(a), including the part of those taxes that is dedicated to pay bonded
indebtedness. Although "additional" ad valorem urban renewal taxes also require voter approval, by definition, those
"additional" taxes do not include taxes to pay bonded indebtedness because under section 11g(1) and (2) taxes to pay
bonded indebtedness are not subject to the limitations of those subsections. See discussion of taxes to pay urban renewal
bonds in Part I B of this opinion and discussion of "additional" taxes in Part IV.
E. Need for Legislation Authorizing Elections
Before leaving this subject, we note that section 11g(3)(a) only establishes voter approval as a condition on the levy of
"new" or "additional" ad valorem property taxes; it does not authorize elections for such purposes. Although most local
governments currently have statutory authority to submit their tax levies for voter approval, such authority does not
include submitting for voter approval the specific question whether those taxes are authorized notwithstanding the fact that
they may be "new" or "additional" for purposes of Article XI, section 11g(3)(a), of the Oregon Constitution. Therefore, it
will be necessary to enact laws authorizing and regulating elections for the purpose of certifying to the voters questions
concerning the approval of such "new" or "additional" taxes.
VI. Exception to Voter Approval Requirement for Bonded Indebtedness
Section 11g(3)(a) requires special voter approval of all "new or additional" ad valorem property taxes levied against real
property. Yet, section 11g(3)(b) exempts from this requirement "taxes levied to pay bonded indebtedness approved by the
voters in an election held prior to the effective date" of the constitutional amendment (December 5, 1996).
You ask whether the exception to the voter approval requirement in section 11g(3)(b) applies only to the issuance of bonds
or also to the levy of ad valorem property taxes to pay the bonded indebtedness. We conclude that the exception applies to
taxes to repay bonds, provided the bonds were approved by the voters prior to December 5. The exception also applies to
both the issuance of, and the levy of taxes to pay, bonds issued to refund bonds, but only if those original bonds received
voter approval in conformity with the requirements of section 11g(3)(a).
Section 11g(3)(b) provides:
Nothing in this subsection shall affect taxes levied for the repayment of bonded indebtedness approved by
voters in an election held prior to the effective date of this Act, or the issuance of refunding bonds to pay
such bonded indebtedness. This subsection shall not require voter approval for the issuance of, or the levy
of taxes to pay, bonds issued to refund bonds issued in conformance with this subsection.
(Emphasis added.)

Your question requires us to determine whether the phrase "approved by voters" in the first sentence of section 11g(3)(b)
modifies "taxes levied for the repayment of bonded indebtedness" or only the "bonded indebtedness." We conclude that it
is the latter for several reasons based on the text of this provision. First, the placement of the phrase "approved by the
voters" strongly suggests that it is intended to apply only to the "bonded indebtedness." Unlike other provisions in section
11g with multiple modifying phrases that make it difficult to place the modifier immediately following its object, the first
sentence in section 11g(3)(b) could easily have been worded to express a different intent. If the intent had been to
condition this exception on voter approval of the taxes, the provision could have been written to state that, "Nothing in this
subsection shall affect taxes levied for the repayment of bonded indebtedness and approved by the voters in an election
held prior to the effective date of this Act." Instead, the phrase "approved by the voters" directly modifies the "bonded
indebtedness."
Second, the last clause in the sentence extends its exception for voter approval of taxes to "the issuance of refunding bonds
to pay such bonded indebtedness." (Emphasis added.) The phrase "such bonded indebtedness" is not a reference to bonded
indebtedness generally, but to "bonded indebtedness approved by voters in an election held prior to the effective date of
this Act."
Thus, we believe that the text of the first sentence of section 11g(3)(b) is susceptible to only one interpretation.
Nevertheless, we also consider this sentence in the context of section 11g as a whole. The apparent purpose for the
exception in section 11g(3) is not only to ensure voter approval of "new" or "additional" taxes, but also to avoid violating
contract rights related to bonds that may have been created following, and been premised on, voter approval of those
bonds.
This point can be readily illustrated by an example. Assume that a government made contractual commitments to issue
bonds backed by ad valorem property taxes, having obtained voter approval of those bonds before December 5, 1996.
Assume further that the bond revenues were to serve a new purpose and, therefore, the ad valorem taxes might be deemed
"new" taxes requiring voter approval under section 11g(3)(a). The contractual commitments relating to the bonds would be
breached if the government, following the enactment of section 11g, could not secure voter approval of the taxes to repay
the bonds. The wording of section 11g(3)(b) apparently exists to avoid such a result.
There would be no issue of voter approval under section 11g(3)(a) if, prior to December 5, 1996, the effective date of the
constitutional amendment, the voters had approved the taxes to pay such bonds. As discussed above, such taxes would not
be "new" and, therefore, would not be subject to section 11g(3)(a) in any case. Also, taxes that prior to the effective date
were legally authorized for the payment of bonds issued prior to the effective date would not be "new" taxes. However,
taxes legally authorized on or after December 5, 1996, to repay bonds approved prior to, but issued after, that date would
be "new." Section 11g(3)(b) exempts from voter approval under section 11g(3)(a) taxes to pay such bonds.
Thus, the effect of the first sentence of section 11g(3)(b) exempts from the provisions of section 11g(3) all taxes levied to
pay bonded indebtedness if the bonds were voter approved before December 5, 1996. Absent this exemption, such taxes, if
"new" or "additional," would be subject to the voter requirements of section 11g(3)(a).
The second sentence of section 11g(3)(b) relates to the issuance of certain bonds and to the taxes to pay those bonds. It
provides that subsection (3) "shall not require voter approval for the issuance of, or the levy of taxes to pay, bonds issued
to refund bonds issued in conformance with this subsection." This exception to voter approval requirements applies to both
the issuance of and the levy of taxes to pay bonds issued to refund bonds, but only if those original bonds received voter
approval in conformity with the requirements of section 11g(3)(a).
One of two effects of the second sentence of section 11g(3)(b) is to exempt from the voter approval requirements of
section 11g(3)(a) taxes levied to pay for bonds that are used to "refund," i.e., pay off or retire, other bonds that were
approved in a manner consistent with section 11g(3)(a). In other words, if the original bonds received the required voter
approval, the taxes to pay the replacement bonds do not also require voter approval.
Another effect of the second sentence of section 11g(3)(b) is to declare that the voter approval requirements also do not
apply to the issuance of bonds that are used to refund bonds that received the required voter approval. This element of
section 11g(3)(b) is the most difficult to interpret because section 11g(3)(a) does not require voter approval regarding the
issuance of bonds, even if the taxes to pay for those bonds require voter approval because they are "new" or "additional."
In other words, there is no apparent reason for the exception because there is no requirement in section 11g(3) that bonds
be voter approved. The only explanation that we can offer for the statement that voter approval is not required for bonds
used to refund bonds that were voter approved is to remove any doubt that such voter approval is not required. We assume
this is simply a direct expression of the more general provisions in section 11g(1), (2) and (3)(b) intended to avoid

impairing existing bond commitments.
The first sentence of section 11g(3)(b) also exempts taxes to repay bonded indebtedness from the provisions of section
11g(3)(c). Section 11g(3)(c) restricts the meaning of "capital constructions and improvements" for which bonds may be
authorized under Article XI.(26) Since section 11g(3) in no way limits or conditions the issuance of bonds, the exemption
found in section 11g(3)(b) relates solely to the taxes to pay bonds, not to bonds themselves, consistent with its plain
language.
VII. "Property" and the Unit of Property
The limitations on ad valorem property taxes imposed by Article XI, sections 11g, apply to taxes levied on "each
property." Your next set of questions focuses on the meaning of the term "property" and the unit of property to which the
section 11g limitations apply.
A. Definition of "Property"
You first ask what is meant by the term "property" as used in section 11g, and whether that term includes centrally
assessed property. We conclude that the term "property" in section 11g encompasses all forms of property recognized in
law, such as real and personal property, tangible and intangible property. Thus, it includes utility property that is "centrally
assessed" by the Department of Revenue under ORS 308.515.

1. Property Generally
   As noted throughout this opinion, our goal is to determine the probable intent of the voters when they adopted section 11g.
   The best evidence of that intent is the text and context of the constitutional provision itself, interpreted not upon narrow
   technical principles, but upon broad general lines, in order that the object intended be accomplished. We approach the
   interpretation of the term "property" in this same manner.
   The fundamental objective of section 11g is that the ad valorem taxes on property be reduced for tax year 1997-98 and
   limited in growth thereafter. To accomplish this objective, the term "property" is used extensively throughout section 11g.
   The term "property," however, is not defined in section 11g. Thus, we must consider whether "property," as used in section
   11g, has an established or prescribed legal or technical meaning. If not, we would use its plain, ordinary meaning. See
   Ecumenical Ministries v. Oregon Lottery Comm., 318 Or at 560-62; Jones v. Hoss, 132 Or 175, 178, 285 P 205 (1930);
   46 Op Atty Gen 388 (1990).
   Section 11g neither provides nor implies a special meaning in its use of the term "property." Therefore, we conclude that
   its plain meaning will control. The most apt dictionary definition of property is:
   2 a : something that is or may be owned or possessed : wealth, goods; specif : a piece of real estate b : the exclusive right to possess, enjoy, and dispose of a thing :
   a valuable right or interest primarily a source or element of wealth : ownership c : something to which a person has a legal title : an estate in tangible assets (as
   lands, goods, money) or intangible rights (as copyrights, patents) in which or to which a person has a right
   protected by law
   Webster's International at 1818. The general meaning of "property" as "something * * * owned" includes all forms of
   things that legally may be owned: tangible assets, such as lands, goods or money, and intangible assets, such as intellectual
   property.
   Significantly, the term "property" in section 11g is not modified by other terms (as, for example, "real" property,
   "personal" property or "intangible" property) except in two places. Only in subsections 11g(3)(a) and section 11g(4)(a) is
   the expression "real property" used.(27) These two exceptions imply that when the term "property" is used in section 11g,
   unaccompanied by such words of limitation, it is intended to include all forms of property.
   Notwithstanding the foregoing preliminary conclusion, we also consider the "context" of section 11g. We note, initially,
   that the context of section 11g necessarily includes the ad valorem property tax system in effect at the time the voters
   approved it. Moreover, the tax limitation for tax year 1997-98 prescribed by section 11g(1) itself is based specifically on
   taxes in tax years 1994-95 or 1995-96. This suggests that the voters understood that the limitations on ad valorem taxes on
   "property" in section 11g would apply at least to all forms of property that were subject to tax at the time section 11g took
   effect. At the time section 11g took effect, the ad valorem property tax was assessed on real and personal property, but

only certain kinds of intangible property of designated utilities. ORS 307.030, 308.505.
We note also that section 11g(3)(c) modifies the definition of capital construction and improvements as used in Article XI,
thereby linking section 11g to other sections in Article XI. Like section 11g, section 11b of Article XI (Measure 5 (1990))
imposes limitations on property taxes. Although the term "property" is not defined in section 11b, the legislature provided
the following definition for the purpose of implementing Article XI, section 11b:
real or tangible personal property, and intangible property that is part of a unit of real or tangible personal
property to the extent that such intangible property is subject to a tax on property.
ORS 310.140(1).
It is reasonable to assume that property taxpayers would have been at least generally aware of these property concepts
when they adopted section 11g. Thus, it might not be unreasonable to conclude that the definition of property in ORS
310.140(1) prescribes the minimum scope of the meaning of "property" in Article XI, section 11g. In the absence of any
language in section 11g suggesting another definition, one could conclude that the voters intended the meaning of
"property" under section 11g to be the same as the existing statutory definition.
Notwithstanding the foregoing, we believe it is unlikely that the courts would conclude that, for purposes of section 11g,
the voters intended "property" to have the special definition found in ORS 310.140(1). Section 11g does not contain any
restrictive language to suggest that only certain property is subject to its limitations, and the overall purpose of section 11g
belies any such interpretation. Section 11g(1) and (2) limit not only existing, but also future ad valorem property taxes.
Moreover, section 11g(3) prohibits new or additional ad valorem property taxes without voter approval, suggesting that
other kinds of ad valorem property taxes would be subject to section 11g requirements. Accordingly, we conclude that the
term "property" in section 11g is intended to have its plain, natural and ordinary meaning which would include all types of
property, such as real and personal property, tangible and intangible property.

2. Centrally Assessed Utility Property
   Having concluded that "property" includes all types of property, we necessarily also conclude that utility property that is
   centrally assessed by the Department of Revenue under ORS 308.515 is "property" for purposes of section 11g.(28) In fact,
   the statutory definition of property for purposes of the central assessment statutes, found in ORS 308.510, appears to be
   equally broad.(29) The conclusion that "property" includes centrally assessed property is further supported by the facts that
   (1) utility property was taxed under the ad valorem tax system when section 11g became law, and (2) the definition of
   property in ORS 310.140 includes intangible property, for which only utilities are assessed.
   A California case interpreting Article XIII A, section 2, subdivision (a), of the California Constitution (part of the 1978
   initiative known as "Proposition 13"), holds that its valuation rollback provision does not apply to unit taxation of utility
   property. ITT World Communications, Inc. v. City and County of San Francisco et al, 693 P2d 811 (Cal 1985). This
   case does not provide guidance here, because the California constitutional provision applied only to real property. In
   contrast, Article XI, section 11g, of the Oregon Constitution applies not only to real property, but also to personal or
   intangible property, and therefore also applies to utility property. In addition, the California provision applied only to
   locally assessed property. Because utility property in California was state-assessed, it failed to meet this requirement. Id. at
3. In contrast, section 11g applies to all ad valorem property taxes, regardless of the unit of government assessing the
   tax.
   Therefore, we conclude that centrally assessed utility property is "property" for purposes of section 11g.
   B. The Unit of Property
   You also ask what unit of property is to be used for purposes of applying the limitations in section 11g. We first address
   this question and then consider the three examples you pose.
   As with the general concept of property, section 11g does not define or otherwise prescribe the unit of property for
   purposes of its provisions. In fact, "unit of property" is not mentioned in section 11g. Nevertheless, as discussed below, it
   is necessary to consider this issue because in the administration of the ad valorem property tax system the unit of property
   can be either groupings of items of property or each item of property individually or combinations of each.
   Because there is no term or expression relating to the unit of property, the proper focus is on the general intent of section
   11g. There is nothing in section 11g to suggest that it is intended to change the administration of ad valorem property taxes

apart from certain limitations on the imposition of taxes discussed above. In fact, as noted above, section 11g presupposes
the existing system of ad valorem property taxation and, in some instances, specifically refers to taxes imposed under that
system in previous years.
In particular, the remainder of Article XI, including section 11b, and related statutes in effect at the time section 11g was
approved by the voters, are part of the context of section 11g. Although the unit of property is not defined in section 11b
itself, it has been defined by the legislature for purposes of section 11b in ORS 310.160.(30) The objective of ORS 310.160
is to combine property which is used for a single integrative or operating purpose into the same unit. For example, all
contiguous property within a single code area under common ownership that is used and appraised for a single integrative
purpose is treated as the unit of property regardless of the number of tax accounts. ORS 310.160(1). All items of personal
property in a single tax account are treated as a single unit if they are not part of an operating unit consisting of both real
and personal property. ORS 310.160(4). Land and improvements under different ownership that are combined into a single
operating unit are treated together as a single unit. ORS 310.160(5). Therefore, the determining factor in defining the unit
of property for purposes of section 11b is the extent to which the property is combined into a single integrative unit
regardless of divisions by tax account.
It is arguable, although unlikely, that the specific concept of "unit of property" in ORS 310.160 at the time section 11g
became law governs the implementation of section 11g. We say "unlikely" because there is nothing in section 11g that
references ORS 310.160 or otherwise suggests the particular treatment of "unit of property" that is found in the statute.
Thus, there is no reason to suppose that when the people approved section 11g they had in mind ORS 310.160, or any
specific concept of "unit of property" or even a single concept of "unit of property." Nevertheless, we cannot say that the
treatment of the "unit of property" in ORS 310.160 is inconsistent with the provisions of section 11g. In fact, because
sections 11b and 11g both limit property taxes, it is reasonable to assume that the legislation implementing section 11b,
such as ORS 310.160, would not be inconsistent with the general intent of section 11g.(31)
Thus, we reach the following conclusions. First, because section 11g does not prescribe what the unit of property is to be
for purposes of applying its provisions, the legislature may enact implementing legislation to address this issue. Second,
the legislature may prescribe any definition or treatment of the unit of property, including different definitions for different
purposes, as long as those definitions do not conflict with the intent of section 11g in limiting property taxes, with other
provisions of the Oregon Constitution or with federal law.
Because the "unit of property" definition found in ORS 310.160 does not appear to conflict with section 11g, we address
the examples of property posed by your question using this existing definition for illustrative purposes only.

1. Industrial Plant
   You ask specifically whether an entire tax account consisting of either real property (land and improvements) or of
   personal property is a single unit of "property" if the real property or personal property is part of an industrial plant. As
   discussed above, the answer would depend upon what concept the legislature adopts as the unit of property for purposes of
   implementing section 11g. Under ORS 310.160, an entire industrial plant would be viewed as a single integrative unit. The
   defining feature is not whether the real or personal property is in a separate tax account but whether the property is part of
   a single operating unit.
   Assuming a similar standard is adopted by the legislature for purposes of section 11g, a tax account consisting either of
   real property (land and improvements) or of personal property would be a single unit of "property," unless the real or
   personal property is an integrated part of a larger property within a tax code area, such as an industrial plant, in which case
   it would be part of that larger unit of property, and not a separate unit of property. The legislature may, of course, adopt a
   different approach in implementing section 11g.
2. Identifiable Personal Property Within a Personal Property Account
   You next ask whether each identifiable piece of personal property within a personal property account is a separate unit of
   "property" for purposes of section 11g. The answer, again, will depend upon implementing legislation. Assuming the
   legislature follows the approach found in ORS 310.160, the unit of property will consist of all contiguous property
   (including both real and personal property) within a single code area in the county under common ownership that is used
   and appraised for a single integrated purpose. See ORS 310.160(1). Conversely, if the personal property "is not part of an
   operating unit consisting of both real and personal property, the unit of property shall consist of all items of personal
   property identified in a single property tax account." See ORS 310.160(4).

3. Centrally Assessed Utility Property
You also ask whether an entire centrally assessed utility property under ORS 308.515 is a single unit of "property" for
purposes of the section 11g limitation on ad valorem property taxes. Once again, if the legislature adopts legislation
implementing section 11g consistent with ORS 310.160, all of the property of a utility taxed within a tax code area, both
real and personal property, tangible and intangible, would be a single unit of property.
We are aware, however, that centrally assessed utilities typically have property in many tax code areas and in fact several
states. It would be entirely reasonable and consistent with the limitations of section 11g for the legislature to adopt a
special definition of "unit of property" for utilities in order to effectively administer the tax laws consistent with the special
features of utility property.
C. Consistency with Appraisal Theory and Practice
Finally, you ask if the unit of property for purposes of the section 11g limitations on ad valorem property taxes may be
different from the unit of property used for appraisal purposes. The answer is a conditional yes.
Section 11g is a limitation on the amount of property taxes, not a limitation on the manner in which property is appraised.
Section 11g achieves this objective by limiting the amount of the tax in tax year 1997-98, and then by limiting the annual
growth of those taxes to three percent per year in subsequent years subject, in certain circumstances, to additional
limitations.
The only reference in section 11g to appraisal is in subsection (6), which limits the assessed valuation of each property to
its real market value. This provision does not prescribe a particular unit of property for appraisal purposes. Thus, the only
requirement imposed by section 11g is that, whatever the unit of property, the appraisal of that property may not exceed its
real market value.
VIII. Improvements
Your next set of questions arises from section 11g(4)(a), which provides that taxes on a property may be increased by
reason of "improvements" to that property made during or after the 1994-95 tax year but may not exceed the special
limitations set out in section 11g(4)(a).
A. Effect of Tax Limitation on Property That Is Improved
You first ask for a general explanation of how the section 11g limitations would apply to improved property. The operative
language of the exception in section 11g(4)(a) provides:
In the event a property is improved during or after the 1994-95 tax year, the ad valorem property taxes on
that property may be increased, by reason of such improvements, in excess of the three percent (3%)
limitation of subsection (2) of this section, except that the tax shall not exceed the lesser of (i) the average
ad valorem property taxes paid on similar properties similarly valued and located in the same taxing code
area, or (ii) the ad valorem property taxes on the property without regard to the new or additional
improvements, plus the ad valorem property taxes on the improvements at the same dollar to value ratio as
paid on the property without the improvements.
Once the new improvements are added to a property and the ad valorem property tax attributable to the new
or additional improvements is determined, the ad valorem property tax attributable to the improvements
may be increased in subsequent tax years in the manner allowed under subsection (2) of this section.
As discussed in Part II B of this opinion, if the subject property is improved during the 1994-95, 1995-96 or 1996-97 tax
year, the limitation in section 11g(1) does not apply for purposes of calculating the permitted tax on the property for the
1997-98 tax year. If the property is improved during or after the 1997-98 tax year, the three percent growth limitation
under section 11g(2) does not apply for purposes of calculating the permitted tax on the property for the tax year following
the year in which the improvements were made. Instead, the applicable limitation is found in subsection (4)(a)(i) or
(4)(a)(ii). We discuss these two special limitations below and then provide an example of how our interpretation of
subsection (4)(a) would apply to improved property.

1. Limitation in Subsection (4)(a)(i)
   The limitation contained in subsection (4)(a)(i) requires a determination of "the average ad valorem property taxes paid on

similar properties similarly valued and located in the same taxing code area." Although this language does not expressly
designate any specific tax year for which the "average ad valorem property taxes" on similar property must be determined,
the most reasonable interpretation is that the taxes on the comparison properties are to be determined as of the same tax
year for which the taxes on the property that is improved are being determined. For example, assume that Property X was
improved during the 1997-98 tax year. The limitation in subsection (4)(a) would apply for purposes of calculating the
taxes on Property X for the 1998-99 tax year. Therefore, the limitation in subsection (4)(a)(i) would be ascertained by
determining the average ad valorem property taxes to be assessed for the 1998-99 tax year on similar properties that are
similarly valued.
We also must consider whether the comparison required by section 11g(4)(a)(i) is between taxes on the entire property
with the improvements and the average tax on similar properties similarly valued, or only between the tax on the
improvement and the average tax on similar improvements. The text of section 11g(4)(a) requires a comparison between
the tax on the property that is improved and the average ad valorem tax paid on "similar properties." Therefore, we
conclude that the comparison should be between taxes on the entire property with the improvements and the average tax
on similar properties with similar improvements similarly valued in the same tax code area.

2. Limitation in Subsection (4)(a)(ii)
   The limitation contained in subsection (4)(a)(ii) requires a determination of "the ad valorem property taxes on the property
   without regard to the new or additional improvements." Again, this language does not designate any specific tax year for
   determining "the ad valorem property taxes on the property." The most reasonable interpretation is that, for this purpose,
   the ad valorem property taxes are those that would have been assessed on the unimproved property for the current year,
   taking into account the property tax limitations under section 11g and under Article XI, section 11b, of the Oregon
   Constitution (Measure 5 (1990)).
   Subsection (4)(a)(ii) also requires that property taxes on the improvements be separately calculated "at the same dollar to
   value ratio as paid on the property without the improvements." We interpret this language as requiring, first, a calculation
   of the "dollar to value ratio" by dividing the property taxes that could have been assessed for the current tax year on the
   unimproved property by the real market value of that property as determined for the current tax year. Second, the taxes on
   the improvements would be determined by multiplying the resulting "dollar to value ratio" by the value of the
   improvements also as determined for the current tax year.(32)
3. Example of Subsection (4)(a) Limitation Applied to Improved Property
   The following example illustrates our interpretation of the limitation in subsection (4)(a). Assume the following facts:
4. The ad valorem property taxes on Property X for the 1994-95 and 1995-96 tax years were $1,100 and 1,200,
   respectively.(33) For the 1997-98 tax year, the tax on Property X, as limited by section 11g(1), was $1,080 (90% of
   the 1995-96 tax).
5. During the 1997-98 tax year, Property X is "improved" within the meaning of section 11g(4)(a).
6. For purposes of the 1998-99 tax year, the real market value of Property X is $175,000, of which $65,000 represents
   the value of the improvements.
7. The average ad valorem property taxes assessed for the 1998-99 tax year on properties within the same taxing code
   area that are similar to (and similarly valued as) Property X, as improved, are $1,800.(34)
   Application of Subsection (4)(a)(i): The subsection (4)(a)(i) limitation for Property X's taxes for the
   1998-99 tax year would be $1,800 (the average ad valorem property taxes paid by similar properties
   similarly valued within the same taxing code area).
   Application of Subsection (4)(a)(ii): The subsection (4)(a)(ii) limitation for Property X's taxes for the
   1998-99 tax year would be calculated as follows:
   First, determine the 1998-99 property taxes that could have been assessed on Property X had
   it not been improved. This tax will be subject to the applicable property tax limitation for
   that year. The limitation under section 11g is calculated by increasing the 1997-98 taxes
   ($1,080) by three percent, resulting in total permitted taxes for 1998-99 of $1,112.40. The
   limitation under Measure 5 is $15 for each $1,000 of real market value ($175,000 x .015),
   resulting in a limitation of $2,625. Because the section 11g limitation is lower, it is the
   applicable limitation in this example.

Second, calculate the dollar-to-value ratio of the 1998-99 property taxes by dividing
$1,112.40 by the value of Property X, without regard to the value of the improvements
($110,000). The resulting dollar-to-value ratio is .01011.
Third, determine the permitted 1998-99 taxes on the improvements by multiplying the
dollar-to-value ratio (.01011) by the value of the improvements ($65,000). This results in
permitted taxes on the improvements of $657.15.
Fourth, add the permitted taxes on the unimproved Property X ($1,112.40) to the permitted
taxes on the improvements ($657.15). The resulting figure, $1,769.55, is the limitation under
subsection (4)(a)(ii).
Subsection (4)(a) Limitation: Because the limitation calculated under subsection (4)(a)(ii) ($1,769.55) is
less than that calculated under subsection (4)(a)(i) ($1,800), the applicable limitation is that calculated
under subsection (4)(a)(ii). Accordingly, the maximum property tax that could be assessed on Property X
for the 1998-99 tax year would be $1,769.55.(35)
B. Effect of Concurrent Additions and Retirements or Depreciation
You next ask about the effect of additions and retirements or depreciation to the same unit of property in the same year in
determining whether property has been "improved" for purposes of the section 11g(4)(a) exception. We conclude that a
property could be "improved" within the meaning of section 11g(4)(a) even if the property had a concurrent offsetting
reduction in value due to depreciation or retirements.
In determining whether there is an improvement, the fundamental question is whether additions of property are netted
against retirements of property and depreciation. Section 11g(4)(a) discusses property being improved by "new
construction, reconstruction or major addition, remodeling, renovation or rehabilitation of real property." This provision
makes no mention of retirements, depreciation or netting additions with retirements to determine if an improvement exists.
Therefore, we conclude that the determination of whether a unit of property has been "improved" is made without regard
to any concurrent reductions in value due to depreciation or retirements of machinery or equipment, i.e., improvements are
not netted against retirements and depreciation.(36)
C. Value of Property Without the Improvements
You also ask how the value of the unimproved property is to be determined for purposes of calculating the dollar-to-value
ratio referred to in section 11g(4)(a)(ii) when the improved property includes machinery or equipment. As discussed
above, the section 11g(4)(a)(ii) limitation requires a determination of the property's value without regard to the
improvements. We concluded that, for this purpose, the value of the property without the improvements is to be
determined as of the current tax year.
We further conclude that the value must be the property's "real market value" as defined in ORS 308.205 and the
underlying administrative rules. Under the law in effect when section 11g was adopted by the voters, ad valorem property
taxes must be based on the subject property's "real market value." ORS 308.232; see also Or Const Art XI, § 11b
(imposing tax limitations based on property's "real market value"). Absent any indication of contrary intent, we assume
that the voters were aware of the taxation system in place at the time they adopted the Measure and that they intended it to
operate within that system. See 46 Op Atty Gen 388, 395 (1990).
There is no indication that section 11g was intended to supersede the "real market value" requirements under existing law.
To the contrary, section 11g(6) specifically states that "[i]n no case shall the assessed valuation of any property exceed its
real market value." We therefore conclude that, for purposes of calculating the limitation in section 11g(4)(a)(ii), the value
of the property without the improvements cannot exceed its real market value. That value must take into account
reductions in value due to retirements or depreciation for the year in question as well as any appreciation in value. See,
e.g., OAR 150-308.205-(D).
The following two examples will illustrate this conclusion. The first example shows the calculation of the section
11g(4)(a)(ii) limitation for a unit of property that has an improvement and retirement of equipment in the same tax year.
The second example shows the calculation of the section 11g(4)(a)(ii) limitation for a unit of property that has an
improvement and depreciation in the same year.

Example A (concurrent improvement and retirement): Assume the following facts:

1. The ad valorem property taxes on Property A for the 1994-95 and 1995-96 tax years were $1,100 and 1,200,
   respectively (assume for this purpose that no bond taxes are assessed on Property A for any of the years in
   question).
2. During the 1996-97 tax year, Property A is "improved" within the meaning of section 11g(4)(a). During the same
   year, a piece of equipment on Property A is retired.
3. For purposes of the 1997-98 tax year, the total real market value of Property A, taking into account both the value
   of the improvements and the reduction in value due to the retirement of equipment during 1996-97, is $175,000.
   The value of the improvements was $65,000 without regard to the retirement.
4. There are no properties within the same taxing code area that are similar to (and similarly valued as) Property A as
   improved.
   Application of Subsection (4)(a)(ii): The subsection (4)(a)(ii) limitation for Property A's taxes for the
   1997-98 tax year would be calculated as follows:
   First, determine the 1997-98 property taxes that could have been assessed on Property A had it not
   been improved. The limitation under section 11g(1) would be $1,080 (90% of the 1995-96 tax). The
   limitation under section 11b (Measure 5 (1990)) would be $2,625 ($175,000 x .015). Thus, the
   maximum amount that could have been assessed on the property without the improvements for
   1997-98 would be $1,080. (For purposes of this example, we assume that the taxes on the property
   without the improvements are capped at the property tax limitation.)
   Second, calculate the dollar-to-value ratio of the 1997-98 property taxes by dividing $1,080 by the
   real market value of Property A without regard to the value of the improvements ($110,000). The
   resulting dollar-to-value ratio is .0098.
   Third, determine the permitted 1997-98 taxes on the improvements by multiplying the
   dollar-to-value ratio (.0098) by the value of the improvements ($65,000). This results in permitted
   taxes on the improvements of $637.
   Fourth, add the permitted taxes on the unimproved Property A ($1,080) to the permitted taxes on the
   improvements ($637). The resulting figure, $1,717, is the limitation under subsection (4)(a)(ii).
   Example B (concurrent improvement and depreciation): Assume the following facts:
5. Property B, which includes depreciable personal property, had a real market value of $100,000 in 1997-98 (without
   regard to any improvements made to the property during that tax year).
6. The ad valorem property taxes on Property B for the 1997-98 tax year were $1,400 (assume for this purpose that no
   bond taxes are assessed on Property B for any of the years in question).
7. During the 1997-98 tax year, Property B is "improved" within the meaning of section 11g(4)(a).
8. For purposes of the 1998-99 tax year, the total real market value of Property B, taking into account both
   depreciation and the value of the improvement made during 1997-98, is $130,000. The real market value of the
   improvement is $50,000 without regard to the depreciation of the property without the improvements.
9. There are no properties within the same taxing code area that are similar to (and similarly valued as) Property B, as
   improved.
   Application of Subsection (4)(a)(ii): The subsection (4)(a)(ii) limitation for Property B's taxes for the
   1998-99 tax year would be calculated as follows:
   First, determine the 1998-99 property taxes that could have been assessed on Property B had it not
   been improved. The limitation under section 11g(2) would be $1,442 (the amount of the 1997-98
   tax, plus 3%). The limitation under section 11b (Measure 5 (1990)) would be $1,200 ($80,000 x
   .015). Thus, the maximum amount that could have been assessed on the unimproved property for
   1998-99 would be $1,200.
   Second, calculate the dollar-to-value ratio of the 1998-99 property taxes by dividing $1,200 by the
   real market value of Property B without regard to the value of the improvements ($80,000). The
   resulting dollar-to-value ratio is .015.

Third, determine the permitted 1998-99 taxes on the improvements by multiplying the
dollar-to-value ratio (.015) by the value of the improvements ($50,000). This results in permitted
taxes on the improvements of $750.
Fourth, add the permitted taxes on the unimproved Property B ($1,200) to the permitted taxes on the
improvements ($750). The resulting figure, $1,950, is the limitation under subsection (4)(a)(ii).
IX. New Personal Property
Your next question focuses on new personal property that is added to (a) an existing unit of business property consisting of
both real and personal property, (b) an existing tax account consisting entirely of items of personal property, and (c) an
existing individual item of personal property. You ask how the section 11g limitations should be applied when determining
the taxes for such property.
The answer to your question depends on whether personal property can be an "improvement" for purposes of section
11g(4)(a). If personal property is an improvement for purposes of section 11g(4)(a), the taxes on the "improved" property
would be subject to the limitation in that section, as described in Part VIII of this opinion. If personal property is not an
improvement, taxes on the "combined" property (the existing property plus the newly added personal property) would be
subject to the three percent growth limitation in section 11g(2).
In our earlier opinion regarding section 11g, we concluded that personal property could not be considered an improvement.
Op Atty Gen No. 8243, at 26-27. We now reverse that position. At the time our earlier opinion was issued, we had not
undertaken a detailed analysis of either the definition of property in section 11g or the unit of property for purposes of
applying the limitations of section 11g since those questions had not been asked. The present inquiry into these two
questions prompted a reexamination of the question whether personal property could be considered improvements. We
now conclude that personal property can be an improvement and can be improved for purposes of section 11g(4)(a).
Section 11g(4)(a) applies "[i]n the event a property is improved during or after the 1994-95 tax year," and permits taxes on
that property to be increased "by reason of such improvements" within the special limitations set out in section 11g(4)(a).
As we said in Op Atty Gen No. 8243, we believe that the terms "property" and "improved" would be given their plain,
ordinary meaning, since they are not defined in section 11g and the context in which they are used in that section does not
imply a technical meaning. In Part VII A of this opinion, we concluded that, for purposes of section 11g, the term
"property" includes both real and personal property. As used in the phrase "in the event a property is improved" in section
11g(4)(a), the term "property" is not modified by any words of limitation that would restrict its meaning to only real
property being improved. This lack of restriction suggests that the voters intended section 11g(4)(a) to apply to
improvement of personal property as well as real property.
The only instance in section 11g(4)(a) where the term "property" is qualified is in the definition of "improvement." Section
11g(4)(a) defines "improvement" as
new construction, reconstruction or major additions, remodeling, renovation or rehabilitation of real
property including siting, installation or rehabilitation of manufactured structures, but shall not include
minor construction or general, on-going maintenance and repair.
In Op Atty Gen No. 8243, we recognized that under the last antecedent rule, the qualifying phrase "of real property" in this
definition would be interpreted as modifying only the last word immediately preceding it, i.e., "rehabilitation."
Nevertheless, we stated that because none of the preceding words suggested forms of personal property, a court would
likely conclude that the "improvements" to which section 11g(4)(a) applied were improvements to real property.
We now reverse that portion of our earlier opinion and conclude that section 11g(4)(a) applies to improvement of personal
property as well as real property. While some of the terms defining improvements do suggest real property, such as "new
construction" or
"reconstruction," the applicability of other terms, such as "major additions, remodeling or renovation " are not in fact
confined to real property. For example, when airlines acquire new planes for their fleet, which are classified as personal
property, they report the new planes as "additions" to their unit. When the interior of a plane is changed, it is typical to
describe the change as a "remodeling" or a "renovation." Hardware upgrades to computer systems can be "major additions"
to the computer system. Consequently, we cannot discern solely from the words used that the phrase "of real property" was
intended to modify each of those words rather than the last antecedent.

Accordingly, we look for evidence of the voters' intent in the context of section 11g as a whole. As discussed throughout
this opinion, section 11g is intended to reduce and limit ad valorem property taxes. Nevertheless, section 11g(4)(a)
expressly permits taxes on a property to increase in excess of the three percent growth limitation in section 11g(2) by
reason of improvements. We find no apparent rationale why the voters would not have intended to permit taxes on
property to be increased in excess of the three percent growth limitation solely because the property to which there was a
"major addition," "remodeling" or "renovation" was personal, rather than real, property. New personal property can
enhance and improve a unit of property in the same fashion as "new construction" or "reconstruction" can do for real
property as contemplated in section 11g(4)(a), and presumably the taxes related to that increase in value should not be
capped at the annual three percent growth limitation, but increased in the same fashion (and subject to the same special
limitations) as improvements to real property. Although intending to limit property tax increases due to government action
or inflation in values, there is no indication in the text or context of section 11g that the voters did not want to tax the
increased value of personal property that is attributed to major additions, remodeling or renovation.
Nevertheless, because the definition of improvements is susceptible to more than on plausible reading, we look to extrinsic
materials. The Voters' Pamphlet materials discuss the provisions of section 11g(4)(a) only in general terms, stating in the
Explanatory Statement:
Other exceptions permit property taxes to exceed the three percent growth limitation when certain changes
occur to property or to the assessment of property. These changes include new construction or
improvements made to property * * *
(Emphasis added.) Again, the lack of any qualification to the term "property" that would restrict its meaning to real
property suggests that the voters did not intend such a restriction.
Because we do not find even the slightest intent to limit the section 11g(4)(a) limitation only to real property, we conclude
that the phrase "of real property" in the definition of improvements is intended to modify only the last antecedent, i.e.,
rehabilitation of real property. Therefore, we conclude that personal property can be an improvement to real or personal
property if it is a "major addition," "remodeling" or "renovation."
We turn now to the three examples contained in your question. You ask about the addition of new personal property to (a)
business property consisting of both real and personal property, (b) a tax account consisting entirely of items of personal
property, such as
an industrial property tax account, and (c) an individual item of personal property. Based on the foregoing analysis, adding
personal property to the existing property in each of those examples would be treated as an improvement, provided the
addition was a "major" addition to that unit of property,(37) or the existing unit of property was "remodeled" or "renovated"
by the new personal property.(38) As an improvement, the new personal property would be subject to the special limitation
in section 11g(4)(a) instead of the three percent growth limitation in section 11g(2).
X. Revenue Reductions
Your final question asks how to measure "revenue reductions resulting from" section 11g. We conclude that such revenue
reductions are the difference between the amount of property taxes that could be imposed on property absent the
limitations of section 11g and the amount of property taxes that may be imposed on property within the limitations of
section 11g.
Section 11g(1) limits the amount of property tax that may be imposed for the 1997-98 tax year, exclusive of taxes levied to
pay bonded indebtedness or interest thereon, to the lesser of 90 percent of the 1995-96 taxes on the property or the amount
of the 1994-95 taxes on the property. The growth of property taxes is limited by section 11g(2) to no more than three
percent per year thereafter. Section 11g(7) provides that if these limits result in "revenue reductions," the reductions are to
be allocated to protect, to some extent, public safety and public education and to minimize the loss of local control of cities
and counties. See Op Atty Gen No. 8243, at 9.
Section 11g imposes a limitation on the amount of property taxes that can be imposed on each property. It is clear from its
text and context that section 11g was intended to reduce property taxes from their current levels. Section 11g(7) describes
the "revenue reductions" that must be allocated as those "resulting from" the constitutional amendment itself. According to
Webster's International, at 1937, the term "result" means "to proceed, spring, or arise as a consequence, effect or
conclusion." The revenue reductions that are a consequence of section 11g are those that are caused by its operation after
all preexisting limits on property taxes have been applied.

Under the law in effect at the time section 11g was approved by the people, the amount of property taxes to be collected
was determined initially by reference to the budgets of local government entities. Each local government unit is required
by law to determine how much property tax revenue is needed to balance its annual budget. ORS 294.435, 310.010. Each
unit of local government certifies a tax levy to the county assessor. ORS 310.060. The assessor then calculates the rate of
tax needed to raise the amount of the levy for all local government units within the county. ORS 310.090. The assessor
must assure that the taxes imposed on any particular property comply with all statutory and constitutional limits, including
the limits of Article XI, section 11 (tax base limitation) and section 11b (Ballot Measure 5 (1990)), and any statutory
limitation on the amount of property tax that can be levied. ORS 310.070, 310.150. Therefore, it is reasonable to conclude
that the reductions in taxes "resulting from" section 11g must be determined by comparison of the
total amount of taxes that may be imposed under section 11g with the amount of property taxes that could have been
collected under the statutory and constitutional limitations that existed immediately before the approval of section 11g.
HARDY MYERS
Attorney General

1. Article XI, section 11g, of the Oregon Constitution provides:
   Notwithstanding Section 32, Article I, Section 1, Article IX, Section
   11, Article 11, or any other provision of this Constitution:
   (1) Except as provided in subsections (3), (4), and (5) of this section,
   the ad valorem property tax on each property for the tax year 1997-98,
   excluding the portion of the tax that is levied to pay bonded
   indebtedness or interest thereon, shall not exceed the lesser of the
   following: (i) the ad valorem property tax on the same property for the
   tax year ending June 30, 1996, reduced by ten percent (10%), or (ii) the
   ad valorem property tax on the same property for the tax year ending
   June 30, 1995.
   (2)(a) For tax years following tax year 1997-98, except as provided in
   subsections (3), (4), and (5) of this section, the ad valorem property
   tax on each property shall not exceed the tax for the previous year,
   plus three percent (3%).
   (b) The portion of the property tax that is levied on each property for
   the payment of bonded indebtedness or interest thereon is exempted from
   the three percent (3%) annual increase limitation set forth in (a) of
   this subsection.
   (3)(a) On and after the effective date of this section, there shall be
   no new or additional ad valorem property tax levies against real
   property, unless the question of the levy has been approved by not less
   than fifty percent (50%) of voters voting in a general election in an
   even numbered year, or other election in which not less than fifty
   percent (50%) of the registered voters eligible to vote on the question
   cast a ballot.
   (b) Nothing in this subsection shall affect taxes levied for the
   repayment of bonded indebtedness approved by voters in an election held
   prior to the effective date of this Act, or the issuance of refunding
   bonds to pay such bonded indebtedness. This subsection shall not require
   voter approval for the issuance of, or the levy of taxes to pay, bonds
   issued to refund bonds issued in conformance with this subsection.
   (c) For purposes of this Article, capital construction and improvements
   for which bonded indebtedness may be authorized shall not include
   maintenance and repairs, the need for which could reasonably be
   anticipated, supplies and equipment which are not intrinsically part of

the structure, but shall include public safety and law enforcement
vehicles with a projected useful life of not less than five years or the
period established for the repayment of the bonds, whichever is greater.
(c) The ballot title of a bond measure which is subject to this section
shall include a reasonably detailed, simple and understandable
description as to the use of the proceeds and the approximate percentage
each use is of the whole.
(d) If an election is conducted by mail and includes a question, the
approval of which would result in a new or additional ad valorem
property tax levy against real property, the front of the outer envelope
mailed to electors shall be clearly and boldly printed in red with the
following statement: CONTAINS VOTE ON PROPOSED TAX INCREASE.
(e) When an election includes a question regarding a new or additional
ad valorem property tax levy, elections officers shall provide a timely
notice of deadlines for the filing of voters pamphlet statements to each
person who has requested in writing that they receive such notices.
(4)(a) In the event a property is improved during or after the 1994-1995
tax year, the ad valorem property taxes on that property may be
increased, by reason of such improvements, in excess of the three
percent (3%) limitation of subsection (2) of this section, except that
the tax shall not exceed the lesser of (i) the average ad valorem
property taxes paid on similar properties similarly valued and located
in the same taxing code area, or (ii) the ad valorem property taxes on
the property without regard to the new or additional improvements, plus
the ad valorem property taxes on the improvements at the same dollar to
value ratio as paid on the property without the improvements.
Once the new improvements are added to a property and the ad valorem
property tax attributable to the new or additional improvements is
determined, the ad valorem property tax attributable to the improvements
may be increased in subsequent tax years in the manner allowed under
subsection (2) of this section.
For the purposes of this subsection, "improvements" mean new
construction, reconstruction or major additions, remodeling, renovation
or rehabilitation of real property including siting, installation or
rehabilitation of manufactured structures, but shall not include minor
construction or general, on-going maintenance and repair.
(b) In the event a property is rezoned, resulting in a higher assessed
valuation, ad valorem property taxes on that property may be increased
in excess of the limitation set forth in subsection (2) of this section,
except the tax shall not exceed the average ad valorem property taxes
paid on similar properties similarly valued and located in the same
taxing code area, and the ad valorem property tax increase exceeding
three percent (3%) per annum shall not be in effect until the first tax
year after the property is actually used in a manner or for a purpose
consistent with the new zoning unless the zone change was requested in
writing by the property owner(s).
If prior to the effective date of this Act the ad valorem property taxes
on a property have been increased due to a zone change not requested by
the owner of the property, and the property has not been used in a
manner or for a purpose consistent with the new zoning, and there has
not been a transfer of ownership, the property shall be reassessed for

the tax year 1997-98 consistent with the zoning effective immediately
prior to the unrequested zone change or the actual use of the property,
whichever results in the greater tax. Thereafter, the tax may be
increased only within the limitations of this Act until there is a
transfer of ownership or the property is used in a manner consistent
with the new zoning. transfer of ownership by inheritance shall not be
considered transfer of ownership for purposes of this subsection.
(c) If a property is subdivided into two or more separate parcels, the
tax on each newly created parcel shall not exceed the average tax paid
on property similarly valued to the newly created parcel and located in
the same taxing code area.
(d) If there is a lot line adjustment between existing, adjacent
properties that does not create a new lot of record, the tax on each
newly created parcel shall be adjusted according to any increase or
decrease in value, but the combined ad valorem property tax on the
properties shall not be increased more than is permitted under
subsection (2) of this section for the tax year in which the lot line
adjustment is taken into account.
(e) If a property is placed in a different taxing code area, the ad
valorem property tax on that property may be increased in excess of the
limitation set forth in subsection (2) of this section if:
(A) The taxing district annexation that resulted in the property being
placed in the different taxing code area was approved by a majority of
voters casting a ballot in a general election in an even numbered year
or other election in which not less than fifty percent (50%) of the
registered voters eligible to vote in the election cast a ballot, and
(B) the increased tax on the property does not exceed the average ad
valorem property tax paid on similar property similarly valued in the
same taxing code area.
(5) For the first year following disqualification for exemption or
special assessment, or in the event a property is added to the
assessment and tax rolls as omitted property, ad valorem property taxes
on that property may be increased in excess of the three percent (3%)
increase limitation set forth in subsection (2) of this section, except
the tax shall not exceed the average ad valorem property taxes paid on
similar property similarly valued in the same taxing code area.
(6) In no case shall the assessed valuation of any property exceed its
real market value.
(7) If it is necessary to allocate among political subdivisions of the
state, or departments or agencies within those political subdivisions,
any revenue reductions resulting from this Act, redistribution of
revenues shall be done in a manner so as to (i) prioritize public safety
and public education, and (ii) minimize any loss of local control of
cities and counties to state government.
(8)(a) No government product or service that on or after June 30, 1995
was wholly or partially paid for by ad valorem property taxes, shall be
shifted, transferred, or otherwise converted so as to be wholly or
partially paid for by a fee, assessment, or other charge except state
income taxes, without prior voter approval. If such a shift,
transference or conversion of a property tax to a fee, assessment, or

other charge except state income taxes, occurred without voter approval
after June 30, 1995 and prior to the effective date of this Act, for tax
year 1997-98 and subsequent years, the ad valorem property tax on each
such property, the owner or user of which continues to be subject to
such a fee, assessment, or other charge except state income taxes, shall
be decreased by an additional amount equal to the portion of the fee,
assessment, or other charge which was formerly paid through property
taxes until such time as voters approve the fee, assessment, or other
charge.
(b) The limitations of (a) of this subsection shall not apply to a new
or increased fee, assessment or other charge, the imposition or
enactment of which directly results in an equal or greater offsetting
reduction in property taxes levied in the same taxing district,
providing that the reduction is in addition to the reductions and
limitations set forth elsewhere in this Act.
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2. Article XI, section 11g(3)(a), provides that its voter approval requirement
   applies "[o]n and after the effective date of this section." Section 11g became
   effective 30 days after it was approved by the people, or December 5, 1996. See Or
   Const Art IV, § 1(4)(d).
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3. Ballot Measure 2 (1984) read, in pertinent part:
   (2) The [one and on-half percent ad valorem property tax] limitation
   imposed by subsection (1) shall not apply to ad valorem taxes or special
   assessments levied to pay the interest and redemption charges on any
   bonded indebtedness authorized prior to or concurrent with the date upon
   which this amendment becomes effective.
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4. We recognize that some forms of notes, for example bond anticipation notes, are
   particularly similar to bonds. This does not change our conclusion.
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5. See Part V C of this opinion for an analysis of how this general definition of
   the term "levy" applies to tax increment revenues generated by urban renewal
   plans.
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6. We assume that the people were generally aware of the taxation system in place
   at the time they approved Article XI, section 11g, of the Oregon Constitution and
   that they intended section 11g to operate within that taxation system. See 46 Op
   Atty Gen 388, 395 (1990).

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7. The portion of a taxing unit's ad valorem taxes that is legally dedicated to
   the payment of bonded debt should be at least equal to the unit's minimum bond
   payment obligations for the tax year. However, the existence of such a minimum
   obligation does not automatically result in the requisite funds being legally
   dedicated to meet that obligation. For example, a taxing unit would be subject to
   breach of contract claims if it fails to meet its bond payment obligations, but
   its use of tax revenues for other purposes would not constitute an improper use of
   funds unless those funds were legally dedicated to the payment of bonded debt.
   There are a number of circumstances under which tax revenues would be legally
   dedicated to the payment of bonded debt. For example, taxes that are levied for
   the specific purpose of paying bonded debt would be legally dedicated to that
   purpose. Moreover, as discussed in the text, some taxes are statutorily required
   to be used to pay bonded debt. See, e.g., ORS 238.685(2)(a). If a taxing unit
   certifies or classifies a portion of its ad valorem taxes as being for the payment
   of bonded indebtedness, such a certification or classification probably would be
   legally binding as to the use of those funds. See ORS 310.145(1), 310.060,
   310.143.
   There may be other situations in which a portion of the taxing unit's tax revenues
   would be legally dedicated to the payment of bonded debt. If you have questions
   about any specific situation not discussed in this opinion, you should seek the
   further advice of this office.
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8. The current procedures for assessing property taxes to pay bonded debt vary
   considerably depending on the taxing unit and the type of bond involved. Moreover,
   current law may not provide adequate procedures for identifying the portion of a
   taxing unit's property tax assessment that is legally dedicated to the payment of
   bonded debt. Cities, school districts and other public corporations that are
   authorized to levy or impose ad valorem taxes must certify to the assessor the
   amount to be levied for the payment of bonded debt. ORS 310.060(2)(c), 310.143(1).
   In addition, local governments are authorized to adopt ordinances or resolutions
   that classify the taxes imposed by it into various categories, one of which is
   "[t]axes to pay principal and interest on exempt bonded indebtedness."
   ORS 310.145(1)(d).
   Although certification and classification procedures such as these may adequately
   identify the amount to be used to pay bonded debt for purposes of section 11g, the
   amount certified or classified pursuant to these and other existing statutes may
   not necessarily reflect the amount to be legally dedicated for the payment of
   bonded debt during the ensuing tax year because such certification or
   classification is not the same as legal dedication. Consequently, it may be
   necessary for the legislature to prescribe procedures for identifying in advance
   the amount of property taxes that are to be legally dedicated to the payment of
   bonded debt for the ensuing tax year.
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9. Under this standard, the portion of a school district's general operating levy
   dedicated to the payment of bonded debt under ORS 238.685(2)(a) would not be

subject to the limitation in section 11g(1) and (2) as long as the amount is
identifiable before the taxes are assessed.
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10. Urban renewal agencies are required to certify the following information to
    the county assessor each year:
    The amount of funds to be raised each year for the purpose of paying
    principal and interest on bonded indebtedness from each urban renewal
    area through the division of taxes that are not subject to the limits of
    section 11b, Article XI of the Oregon Constitution.
    ORS 457.440(2)(a). If the amount to be certified under this section is equal to
    the amount that will be legally dedicated to the payment of bonded debt for the
    ensuing year, this certification would sufficiently identify the amount that is
    exempt from the section 11g limitations. It is possible, however, that the two
    amounts will be different. This would be the case if a portion of the agency's tax
    increment revenues is to be legally dedicated to the payment of bonded debt that
    is subject to the constitutional limits described in ORS 457.440(2)(a). For this
    reason, it may be necessary for the legislature to provide separate procedures for
    the identification of amounts that are exempt from the section 11g limitation.
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11. The meaning of the term "context" is not self-evident. It certainly includes
    "other provisions of the same [enactment] and other related [enactments]." PGE,
    317 Or at 611. Context also might include the surrounding historical milieu from
    which an enactment emerges. Although the Oregon Supreme Court has never included
    historical context in its definitions of first level sources, in two cases it has
    used it that way. Fisher Broadcasting, Inc. v. Department of Revenue, 321 Or 341,
    898 P2d 1333 (1995); Goodyear Tire & Rubber Co. v. Tualatin Tire & Auto, 322 Or
    406, 908 P2d 300 (1995); see generally Jack L. Landau, Some Observations About
    Statutory Construction in Oregon, 32 Willamette L Rev 1, 39-41 (1996).
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12. We have reviewed some real-world projections of the effects of applying
    section 11g(1) literally in order to test whether there is a conflict between the
    literal formula in section 11g(1) and the general directive to reduce taxes. We
    did so with some caution for two reasons. First, revenue projections are
    frequently unreliable; second, the meaning of a legal enactment should not depend
    on some shifting state of facts so that in one time and place the enactment means
    one thing, and in another it means something different.
    Projections from Legislative Revenue Office indicate that applying section 11g(1)
    according to its literal terms will achieve the purpose of section 11g to reduce
    taxes as inferred from other provisions within it. Text and context are not
    necessarily in tension with each other. If every taxing authority in Oregon
    imposes the maximum 1997-98 property taxes allowable based on comparison years'
    taxes that include bond taxes, section 11g(1) will produce tax reductions from
    1996-97 property taxes for the substantial majority of Oregon property owners.
    Although the literal application will not necessarily result in the reduction of
    property taxes to the levels of the comparison years' taxes, the text and context
    of section 11g(1) do not necessarily demonstrate an intent to reduce property

taxes to the levels of a particular tax year, only to reduce taxes from their
level at the time the voters approved section 11g, i.e., a reduction from 1996-97
tax levels.
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13. The Ballot Title states in pertinent part:
    summary: * * * Limits future annual property tax increases to 3 percent,
    with exceptions.
    estimate of financial impact: This estimate is based on the following
    assumptions: * * * existing bond levies are exempt from this measure
    even if not voter approved.
    The Explanatory Statement states in pertinent part:
    For tax years following 1997-98, the measure would limit the amount by
    which property taxes could increase to three percent each year.
    Ballot Measure 47 provides exceptions and restrictions. One exception is
    for property taxes levied to pay existing bonded indebtedness.
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14. Because we conclude that the section 11g(1) and (2) limitations do not apply
    to the exceptions in subsections (3), (4) and (5), we do not address the second
    part of your question, i.e., how those exceptions affect the application of the
    section 11g(1) and (2) limitations.
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15. Subsection (4)(c), which deals with subdivided property, imposes a separate
    limitation on the taxes that may be imposed after the subdivision but does not
    expressly authorize a tax increase in excess of the three percent limitation.
    Thus, it is possible to argue that the three percent limitation continues to apply
    to subdivided property subject to the additional limitation imposed by
    subsection 4(c).
    There are two problems with that argument, however. First, once property is
    subdivided, its identity changes and the "property" on which the preceding year's
    tax was imposed no longer exists. Thus, the three percent limitation no longer has
    relevance. Second, subdividing a property typically increases its per-unit value.
    The combined value of the properties comprising the subdivision generally will
    exceed the original property's value by more than three percent. This being the
    case, the specific limitation for subdivisions in subsection (4)(c) would never
    apply if the properties comprising the subdivision were also subject to the three
    percent limitation. For these reasons, it is our opinion that, for the tax year
    after the year in which property is subdivided, the three percent growth
    limitation in section 11g(2) does not apply. Instead, the property is subject to
    the specific limitation for subdivided property in subsection (4)(c).
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16. If the property is depreciating in value, 1994-95 would not necessarily be the
relevant comparison year because the depreciation in value from 1994-95 to 1995-96
could more than offset the increased value due to the improvements made in
1994-95. The 1995-96 taxes would have taken the value of the 1994-95 improvements
into account and therefore would provide an appropriate basis for calculating the
1997-98 tax. However, section 11g(4)(a) clearly provides that the special
limitation for improved property applies if the property is improved "during or
after the 1994-95 tax year." That language is unconditional. We therefore conclude
that the property improvement exception to the section 11g(1) limitation applies
whenever the subject property is improved during the 1994-95 tax year, even if the
relevant comparison year for purposes of applying section 11g(1) would have taken
into account the value of those improvements.
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17. If the subject property is improved during or after 1997-98, the applicable
    limitation for the subsequent tax year is the special limitation for improved
    property under subsection (4)(a), instead of the three percent growth limitation
    under section 11g(2).
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18. This opinion does not address the limits, if any, imposed by federal law.
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19. "It is elementary that the legislature has plenary authority except for such
    limits as might be found in the constitution or in federal laws." La
    Grande/Astoria v. PERB, 281 Or 137, 156, 576 P2d 1204, affirmed on rehearing 284
    Or 173 (1978).
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20. For example, the limitations in Article XI, section 11g, would prevail over
    the authorization in Article XI, section 11a. The latter provision explicitly
    authorizes special school district property levies while the former prohibits
    them.
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21. Article VI, section 10, of the Oregon Constitution provides in relevant part:
    The Legislative Assembly shall provide by law a method whereby the legal
    voters of any county * * * may adopt, amend, revise or repeal a county
    charter. A county charter may provide for the exercise by the county of
    authority over matters of county concern.
    Article XI, section 2, provides in relevant part:
    The Legislative Assembly shall not enact, amend or repeal any charter or
    act of incorporation for any municipality, city or town. The legal
    voters of every city and town are hereby granted power to enact and

amend their municipal charter, subject to the Constitution and criminal
laws of the State of Oregon * * * .
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22. For purposes of geographical or territorial classifications (the only type
    implicated by the hypothetical statute), if the statute survives scrutiny under
    Article I, section 32, it survives under Article IX, section 1. Jarvill v. City of
    Eugene, 289 Or 157, 171 n 15, 613 P2d 1 (1980).
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23. We recognize that, for purposes of the limitations of section 11g(2), it is
    the aggregate of all taxes against the property that determines whether the
    limitation is exceeded, not the last tax levied or, for that matter, any one tax
    that is part of the aggregate.
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24. In our earlier opinion, Op Atty Gen No. 8243, at 16, we addressed urban
    renewal taxes to pay urban renewal bonds, but we did not specifically address
    whether the urban renewal "tax increment" revenues were "ad valorem property
    taxes" for purposes of section 11g(3)(a).
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25. Section 11g refers to ad valorem property taxes in varying ways. For example,
    section 11g(1) and (2) impose limitations on the "the ad valorem tax on each
    property." Section 11g(3)(a) imposes special voting requirements on certain "ad
    valorem property tax levies against real property. However, because there is
    nothing in section 11g to suggest otherwise, we conclude that each of the varying
    references to an ad valorem property tax has the same meaning except to the extent
    that they are qualified by other words. For example, section 11g(3)(a) refers to
    "ad valorem property tax levies against real property."
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26. The restriction in section 11g(3)(c) on capital construction appears to be
    aimed at Article XI, section 11b(3)(b) (Measure 5 (1990)), which limits property
    taxes but exempts from its limitation taxes imposed to pay bonded indebtedness
    incurred for capital construction and improvements. Thus, by restricting the scope
    of "capital construction and improvements," section 11g(3)(c) narrows the scope of
    the section 11b(3)(b) exemption of taxes to pay bonded indebtedness.
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27. "Real property" includes land and improvements to land. See second definition
    of "real" in Webster's Third New International Dictionary (unabridged 1993) at
    1890.

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28. Our conclusion that "property" includes centrally assessed utility property is
    also applicable to other companies that are centrally assessed under ORS 308.515.
    Subject to specific exceptions, the Department of Revenue is required to make an
    annual assessment of the property of the following companies: railroad
    transportation, railroad switching and terminal, electric rail and trackless
    trolley transportation, sleeping car, refrigerator car, private car, tank car, air
    transportation, water transportation upon the inland waters of Oregon, air or
    railway express, communication, heating, gas, electricity, pipeline, toll bridge.
    ORS 308.515(1)(a). The department must also annually assess refrigeration, tank
    and private cars of all companies not included in ORS 308.515(1)(a) when such cars
    are rented, leased or used in railroad transportation for hire. ORS 308.515(1)(b).
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29. ORS 308.510 states, in pertinent part, that as used in ORS 308.505 to 308.665,
    "property" includes "all property, real and personal, tangible and intangible,
    used or held by a company as owner, occupant, lessee, or otherwise."
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30. ORS 310.160 provides:
    (1) For purposes of determining whether the taxes on property to be
    imposed on any property exceed the limits imposed by section 11b,
    Article XI of the Oregon Constitution, the unit of property to be
    considered shall consist of all contiguous property within a singe code
    area in the county under common ownership that is used and appraised for
    a singe integrated purpose, whether or not that property is taxed as a
    single account or multiple accounts.
    (2) In the case of real property that is specially assessed under ORS
    308.370, 308.377. 308.765 or 321,257 to 321.381 or any other law, or
    partially exempt from tax under ORS 307.250, 307.370 or 358.485 or any
    other law, the unit of property shall consist of all components of land
    and improvements in a single operating unit.
    (3) In the case of timeshare properties, the unit of property shall
    consist of all real property components associated with all timeshare
    property within a timeshare plan as described in ORS 94.808.
    (4) In the case of personal property that is not part of an operating
    unit consisting of both real and personal property, the unit of property
    shall consist of all items of personal property identified in a single
    property tax account.
    (5) In the case of land upon which an improvement is located, and the
    land and the improvements are owned by different persons, if the land
    and improvements are a single operating unit, the unit of property shall
    consist of the entire improved parcel.
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31. One exception, of course, is Article XI, section 11g(3)(c), which amends
Article XI with respect to capital construction and improvements for which bonded
indebtedness may be authorized. In that particular, section 11g may well be
inconsistent with legislation implementing section 11b.
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32. For purposes of this opinion, we do not address whether section 11g(4)(a)(ii)
    requires the tax on the improvement be based on the improvement's real market
    value isolated from the unimproved property or upon the increase in real market
    value of the improved property attributable to the addition of the improvement.
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33. For purposes of this example, none of the property tax figures includes any
    taxes levied to pay bonded indebtedness.
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34. For purposes of this opinion, we express no opinion on what are similar
    properties similarly valued or how the average ad valorem property tax is
    calculated.
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35. For the 1999-2000 tax year, assuming that none of the exceptions in
    subsections (3), (4) or (5) apply, the maximum permitted property tax on Property
    X would be $1,822.64 ($1,769.55 increased by 3%).
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36. As discussed in Part III of this opinion, the legislature may enact
    legislation that imposes greater limits on taxation than section 11g, as
    interpreted by this opinion. Thus, the legislature could require that additions of
    property be netted against retirements of property and depreciation in valuing an
    improvement if that would result in taxes lower than allowed under section
    11g(4)(a).
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37. Section 11g does not define "major additions." This term has no fixed meaning,
    and we cannot discern from its text or context, or the Voters' Pamphlet materials,
    what the voters intended to be a "major" addition. Thus, this term cannot simply
    be interpreted, but will require further articulation of policy either in
    legislation or by administrative rule.
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38. Our conclusion that personal property may be an improvement under section
11g(4)(a) is not dependent upon the particular definition of unit of property that
may be adopted by the legislature for purposes of section 11g. Whether the new
property being added to an existing property is a "major" addition to that
existing property may depend upon that definition.
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Created 11/01/97
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