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IN THE REGULAR DIVISION OF THE
OREGON TAX COURT

David K. KLIEWER Trust
and Jean D. Kliewer Trust,
each with an individual one-half interest as tenants in common,
Plaintiffs,

v.
DEPARTMENT OF REVENUE,
Defendant,

and

LINCOLN COUNTY ASSESSOR,
Defendant.

(TC 4432)

Plaintiffs sold designated forestland to an owner exempt from property taxation. The assessor belatedly removed the forestland designation and assessed additional taxes under
ORS 321.372. The court held: (1) the assessor is not prevented from belatedly removing forestland designation after the property sale, and (2) tax liens created under ORS 321.372(2) may not be enforced until the subsequent tax statement is issued and property taxes become due. The court also found that the highest and best use of Plaintiffs' property was not forestland.
Property taxation-Forestland-Definition
1.
Some forestland will not have the growing and harvesting of trees as its highest and best use.

Property taxation-Forestland designation-Removal

2.
Removal of forestland designation occurs when the assessor physically changes the assessment records.

Property taxation-Forestland designation-Removal-Sale to tax-exempt owner

3.
When removing forestland designation under ORS 321.359(1)(b)(B), the assessor must wait until the sale closes and title is transferred before removing the designation.

Property taxation-Forestland designation-Removal

4.
A forestland designation must be removed upon sale of the subject land to a tax-exempt owner. However, failure to immediately remove the designation will not invalidate a belated designation removal attempt.

Property taxation-Forestland designation-Removal-Additional taxes

5.
A tax lien created under ORS 321.372(2) may not be enforced until the property's subsequent tax statement is issued and property taxes become due.


Trial was held March 2, 2000, in the courtroom of the Oregon Tax Court, Salem.
David K. Kliewer argued the cause and filed a brief for Plaintiffs (taxpayers).
James C. Wallace, Assistant Attorney General, Department of Justice, Salem, filed an Answer but did not argue the cause for Defendant Department of Revenue.
Rob Bovette, Assistant County Counsel, Lincoln County, filed an answer and argued the cause for Defendant (county).
Decision for Defendants rendered April 14, 2000.
CARL N. BYERS, Judge.
Plaintiffs (taxpayers) seek a refund of "additional" property taxes they paid. The additional taxes arose when the assessor removed the forestland designation from taxpayers' property. Taxpayers claim that the process used to collect the additional taxes and the amount of the assessment are in error. Although both the Defendant
Department of Revenue and Lincoln County (the county) filed answers, only the county defended at the trial. (1)
FACTS
On December 17, 1976, taxpayer Jean D. Kliewer purchased 120 acres of forestland in Lincoln County, identified by the assessor as AP#14-10-700, Account No. R36469. The property was improved with a single

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Oregon Law