Item A: Measure 37 Givings Tax - Laserfiche WebLink

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event were the issuance of a building permit for the property, then there would be a need to obtain an appraisal to find out what the value of the property will be after the completion of the work authorized by the permit. That value then would need to be compared to the value at the time of the prior triggering event or previous sale of the property. The City would need to deduct from that difference in value investments (and inflation or other factors chosen by the council), and then impose the tax rate upon the remainder. On the other hand, if the triggering event were the transfer of the property, the City could compare the price the owner paid for the property with the sales price, deduct owner investments (and possibly other items), and then tax the difference. (Note again that the more the City relies on the sales price to establish the amount of the tax, the greater the chances that the preemption of ORS 306.815 applies.) In order to make some of the determinations identified above, the City likely would need to rely on certified appraisers. A property owner would have the right to challenge the City’s determination (including going to court to contest it); therefore, the City would need to have substantial evidence to support its determination. What is the anticipated cost of administration? The costs to the City in administering this type of tax would be in medium to high category. If the council chose to impose the tax annually, the City would need to develop an administrative mechanism to calculate, bill and collect a tax on more than 50,000 properties. If the council chose to impose the tax only upon some triggering event – such as the issuance of a building permit or the sale of property – the City would be faced with a less onerous task than annual bills for all property owners, but the task could still be very high, depending on the nature of the triggering event or events. For example, in 2005, there were more than 6,000 properties sold in Eugene. In addition, there were more than 2,000 building permits issued by the City. In addition to the administrative costs noted above, and as with the other options, there would also be additional costs where a property owner objected to the City’s determination as to the amount of any increase in the fair market value of a person’s property. Where the City and property owner had such a disagreement, the City would need to defend its determination in front of a hearings official, and possibly in court. Has the property owner paid (or will the property owner owe) other assessments, taxes or fees in connection with the same triggering action? Measure 50 allows assessed value (and therefore property taxes) to be increased under certain circumstances, such as for additions or improvements, partitions, subdivisions, rezoning where the property is used consistently with the rezoning, lot line adjustment, or the property is dis- qualified from exemption. Depending on how the council chose to impose this type of “capital gains” type tax, a property owner may end up paying tax more than once on the same increase in value for those property actions. In addition, if there has been a local improvement that was fully or partially paid from property owner assessments through a local improvement district, or if there was a public improvement that was funded from General Obligation Bonds, then the property owner would be paying the City twice for the same triggering action. L:\CMO\2006 Council Agendas\M060125\S060125A.doc