Item C: Measure 37 Givings Tax - Laserfiche WebLink

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designation when Lane County becomes aware that the use of the property has actually changed, usually as a result of notification that a land use permit has been filed with the City. This may occur months or years after a rezoning or change in plan designation is completed. One approach to imposing the tax would be to wait until Lane County Assessment and Taxation records a change in use and new real market value, and impose the tax at that time. This would normally be long after the rezoning or change in plan designation is complete. Subject properties would need to be tracked and a separate billing, collection and enforcement process would be needed in this case. If the tax were imposed and collected at the time of the rezoning or change in plan designation, rather than later as a separate process, changes in real market value could be determined by individual property appraisals, but a reasonable alternative could be to estimate changes in real market values using citywide data for similar property. Typical values per acre can be calculated for each zone from citywide data provided by Lane County Assessment and Taxation. These typical values can then be used to estimate the change in real market land value for a piece of land. The difference between the estimated new value after the rezoning or change in designation and the prior value could be the basis for the tax. A tax rate could then be applied to this basis amount to determine the tax due. However, it would not feasible to estimate change in value of improvements in the same way; an individual appraisal would probably be needed to determine the change in real market value of improvements. If individual appraisals are used (and they would be necessary if improvement value is included in the basis of the tax) each property would need to be appraised twice: once under the old zone or plan designation and once under the new. The cost of individual appraisals would be two or three thousand dollars per property and could be quite a bit higher, depending on the property involved. Attachment B shows the typical value of land per acre in 2005 for various zones, calculated from the current real market values for all property in each zone within the City of Eugene. Values of improvements are not included because the change in value for improvements cannot be reasonably estimated without an individual appraisal of the property. Some special area zones do not show typical value in Attachment B because there is currently no information on these zones in the Lane County Assessment and Taxation database. Overlay zones and plan designation values are also not included in this table due to lack of information. Additional analysis will be necessary to determine the effect of special zones, overlay zones and plan designations on real market values. In order to estimate the revenue that a tax on rezoning and change in plan designation might yield, this analysis is based on the following assumptions. Only citizen-initiated rezoning or change in designation applications for property within the city ? would be subject to the tax. A City-initiated action would not trigger the tax. The tax would be collected at the time of approval of a rezoning or change in designation ? application. Assuming that payment of the tax is a condition of approval of the rezone or change in designation, no new billing, collection and enforcement process should be needed and attendant costs will not be incurred by the City. The biggest potential cost would be the cost of litigation is someone challenges the legality of the proposed tax. L:\CMO\2006 Council Agendas\M060522\S060522C.doc