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IN THE OREGON TAX COURT MAGISTRATE DIVISION Property Tax RICHARD BANDUCCI, Plaintiff, v. DOUGLAS COUNTY ASSESSOR, Defendant. ) ) ) ) ) ) ) ) )

TC-MD 090069C

DECISION

This appeal concerns certain real property assessments of nine undeveloped lots for the 2006-07 tax year. They are identified in the Douglas County tax records as Accounts R62064, R62085, R62092, R62099, R62106, R62113, R62120, R62127, and R62134 (tax lots 500 and 800 through 1500). (Defs Closing Argument at 2; Ptfs Compl at 1-12.)1 The lots have no structures (e.g., houses, sheds, shops). (Defs Closing Argument at 1.) Trial in the matter was held by telephone, with the submission of post-trial briefs by the parties. Plaintiff was represented by Steve Gerlt (Gerlt), an Oregon licensed real estate broker and registered appraiser, and a former appraiser for the Douglas County assessor. Also representing Plaintiff was Valynn Currie, an Oregon licensed real estate broker. Defendant was represented by Paul Meyer, Douglas County Counsel. Ron Northcraft, Douglas County Assessor, Susan Acree (Acree), Residential Appraisal Supervisor, and Eileen Simms, county appraiser, also appeared for Defendant. I. STATEMENT OF FACTS The subject property consists of the nine lots acquired by Plaintiff and an associate in March 2006 as part of a bulk purchase of 11 lots for $687,500 (or $62,500 per lot). (Ptfs Ex 1-

In an Order filed March 12, 2009, the court dismissed Accounts R62071 and R62078, leaving nine accounts at issue.

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DECISION TC-MD 090069C

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1.) The lots range in size from approximately one-fifth of an acre to one-quarter of an acre. (Defs Ex A at 13.) The lots are in Phase III of the Knolls Estates PUD subdivision, which is the third phase of a subdivision on the Oak Hills Golf Course in the Sutherlin, Oregon. (Id. at 3.) There are a total of 27 lots in Phase 3. (Defs Closing Argument at2.) The subdivision was "initially platted in or about 1996." (Id.) However, it was not until sometime in 2005 that the infrastructure for the subdivision (paving, water, sewer, gas, and electric hookups) was completed. (Id.; see, e.g., Defs Ex A at 34.2) It is the value attributable to the infrastructure that is at issue; specifically how much those improvements added to the value of the existing lots. The parties have stipulated that the real market value (RMV) for each of the lots under appeal was $85,000 as of January 1, 2006, which is the assessment date for the tax year at issue (2006-07).3 (Defs Closing Argument at 1.) The parties further stipulated that the lots were 100 percent "completed" (apparently referring to street paving, water, electricity, etc.) but "undeveloped" (i.e., without houses or other structures) on the January 1, 2006, assessment date. (Id.) The parties also agree that the change property ratio (CPR) for the year at issue was 59 percent. (Id.) Finally, the parties agree that, for the prior tax year (2005-06), each of the lots had an RMV on the assessment and tax rolls of $7000, a maximum assessed value (MAV) of $7266, and an assessed value (AV) of $7000. (Id.) /// /// /// ///
That exhibit is a "Certification of Completion" by the Phase 3 "Project Manager, i.e. Engineer" dated December 30, 2005. The case involves a "prior tax year," and is before the court under ORS 305.288(3) (2005) based on an earlier court determination that Plaintiff failed to timely petition the county board of property tax appeals due to good and sufficient cause. (See Courts Order at 5, filed Mar 12, 2009.)
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DECISION TC-MD 090069C

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The only issue before the court is the "exception" RMV4 for the 2006-07 tax year. (Id.) Defendant asserts that the 2006-07 exception RMV is $75,000, arguing that that figure captures the increase in value from a physically incomplete to a physically complete subdivision. (Id.) Plaintiff asserts that the 2006-07 exception RMV should be only $28,000. (Id.) II. ANALYSIS In May 1997, Oregon voters passed by referendum Measure 50 (M50), which substantially modified the property tax system in the state of Oregon. Measure 50 is codified in ORS 308.142 through ORS 308.166.5 Prior to M50, a property was taxed at its RMV. Due to increasing values, Oregon voters chose to limit the growth of assessed values. In doing so, M50 created the concept of MAV. For the 1997-98 tax year, which was the implementation year for M50, the MAV was calculated by taking the propertys 1995-96 RMV and subtracting 10 percent (i.e., 90 percent of the July 1, 1995 RMV on the assessment and tax rolls). Or Const, Art XI,

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Oregon Law