Item A: Measure 37 Givings Tax - Laserfiche WebLink

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ATTACHMENT A OPTION 1 – Tax on “Upzonings” Description: Property owners occasionally request the City to change the zoning of their property or the land use designation for their property in the Metro Plan or in a refinement plan. Often times, this change in zoning or designation will increase the value of the property. The council can adopt an ordinance that imposes a tax or fee on that increase in value. The council would need to identify the amount of the tax or fee – presumably a percentage of the increase in value. The increase in value would be measured by the difference in value immediately before the change and immediately after. Is the fee/tax legally permissible, or somehow preempted (by statute or constitution)? The City’s home rule powers authorize the council to adopt any type of fee or charge that is not preempted by federal or state law and that does not violate the U.S. or Oregon Constitutions. Neither the Constitution nor state statutes would preempt the council from adopting such a tax or fee. Therefore, the council has the power to enact a tax on upzonings. Would voter approval be required before adopting the fee/tax? No. Generally, voter approval is required only for certain taxes that are imposed on real property and subject to the limits of Measure 5. Other types of taxes (like the City’s telecommunications privilege tax, or an income tax or gross receipts tax) do not require voter approval. (In certain counties and cities in Oregon, the home-rule charter may include a provision that requires voter approval. Eugene’s Charter does not.) The tax would be subject to referendum. How would the fee/tax be administered and calculated? The charge could be collected either at the time of application or some time later. For example, it could be collected after the rezoning or re-designation is approved, or when the property changes hands. The first option for administration is that the charge would be collected as part of the application for the rezoning or Metro Plan amendment. Since the charge would be one created pursuant to the council’s home-rule powers under the Charter, the council can establish a requirement to submit appraisals as part of the rezoning (or Metro plan change) application. As part of the rezoning or Metro Plan amendment process, the City would need to agree with the applicant’s determination of increase in value, or alternatively, perform its own analysis to develop its own number. The rezoning or Metro Plan amendment processes would need to be revised to add such a requirement. In addition, a decision-maker would need to be designated for determining the increase in value and an appeals process would need to be identified if the property owner disagreed. Rezonings often are decided by a hearings official or the planning commission; Metro Plan amendments, on the other hand, are decided by the council. In addition, some Metro Plan amendments must be approved not only by Eugene, but also by Lane County and Springfield. A second option for administration is to collect the tax after the rezoning or plan amendment is approved. The tax could be determined by City staff, with an appeal to a hearings officer. The rezoning or plan amendment could be made effective only upon payment of the tax, or the L:\CMO\2006 Council Agendas\M060125\S060125A.doc