The problem is multi acre Designated Forestland properties within the residential zoned city of Bend Oregon that have a property tax computed on a special Forestland Designation on their property that assigns it a property tax assessment value of $79.38 per acre that has a reasonable market value of at least $250,000. It is an unintended consequence of the Oregon Forestland Value laws and rules.
The big problem is....how are thousands of acres of privately owned forestland in Oregon going to be given a property assessment value. One that is reasonable and fair and promotes the multitude of private forestland values to the state and its citizens.
The size of private forestland assessed for value and taxed under state law and DOR implementation ranges from a minimum of 2 acres to thousands of acres. Thousands of acres of private forestland in remote areas...only have their own vast number of acres as well as acres owned by others around them. A minimum of 2 acres in the city assessed at $79.38 per acre where the next neighbor with 2 or more acres is assessed at at a value of maybe $250,000 per acre.
The best examples in Bend of this situation are located along Bachelor View Rd.
There is a difference in value between an acre of forestland in the middle of nowhere held as a parcel of thousands of acres and an acre of of officially Designated Forestland in the city of Bend. Big difference. They are both assessed at the same value for tax computation!
DOR annually certifies the property assessment value for county assessors to use in Eastern Oregon for assessing and taxing privately owned Forestland and Designated Forestland. $79.38 assessment per acre for the forthcoming year....
Examining the certification that the DOR makes it looks to me like the law requiring this certification applies to parcels over 5,000 acres. Makes sense, I guess. However when it comes to applying this assessment rate the county assessor applies to Designated Forestland properties that have the minimum of 2 acres qualifying the property (even in the city!) for the $79.38 per acre assessment value.
Maybe that is a point of entry to attack this anomaly. The tax assessment value is applicable by law only to forestland properties of more than 5,000 acres.
Based on Oregon ORS law a decision making chart would lay it all the relationships of the Forestland value assessment and tax. That is the objective of the following dive into the working parts of how it was intended to work at the legislative level and how it works in application.
There are unintended consequences where the rubber meets the road. Probably intended consequences by special interests. Perhaps the consequences of captured state offices and individuals as well as state offices and individuals that do not want to get involved in calling attention to the problem or doing anything about it......whoever they my be and state office they may be in ore running for.
I am not armed with any special expertise or knowledge in this area. It is a slow and painful effort to sift through it all just to get an understanding of the scope of the problem and all its relationships much less to come up with a solution. It is essentially all about money on the assessment and taxation side but then there are all the other issues that come into play that are either valid in themselves or useful idiots to those whose agenda is money....money in their pocket as an intended big player or unintended small player beneficiary along for the ride of self interest benefit. Big beneficiaries? Big forestland owners on the doorstep of Bend. They get the forestland assessment rate for the assessor approved purpose of growing and harvesting trees for timber and big bucks on what is really speculation property that will grow far more bucks as leaves on a conceptual money tree that sheds real dollars in a windfall.
Maybe the followings a solution from looking at the huge magnitude of difference between the forest and the trees is to draw a line between them at some point.....What point and why? Maybe when the county assessed value goes beyond 1 or 2 thousand times a Designated Forestland value of $79.38 per acre then it is time to terminate the exorbitant tax benefit to property owners that have avoided and morally evaded pay taxes on based on the sham of growing trees for sale on a future commercial market.
What is the state and citizens of Oregon, tax paying residents of Bend getting in return for the low tax assessment given to these property owners of a few acres....? Getting to pay property taxes that they don't pay?
For example:
Real Market Value for this non-Designated Forestland vacant bare land property on Bachelor View Rd. in Bend with 1.97 acres is $450,750.
https://dial.deschutes.org/Real/Index/204894
Assessed Value: $141,070. Property tax: $2,188.94
Real Market Value for this Designated Forestland vacant bare land property
nearby on Bachelor View Rd in Bend with 4.72 acres is $739,380.
https://dial.deschutes.org/Real/Index/117569
Assessed Value: $136,396 Property tax: $2,135.16. That is extraordinarily high tax when the assessed value of Designated Forestland last tax year was about $72 pr acre! There is a reason. It is to be found in the Land and Structures for the account:
One acre is assessed as "Tract'. The remaining 3.72 acreage is assessed as Designated Forestland at about $72 per acre and about $230 is taxed at about .015%. The Tract is a higher level assessment. Subtracting the measly Designated Forestland tax from the total tax paid and rounding everything for ease of mental computation .015% of the remaining Tract assessed value tax is around $2,000. Close enough.
The one acre "Tract" of vacant land is set up to be the 1 acre the house is to be built on. The remainder is Designated Forestland. That is the model used for about a dozen other properties with 1 acre devoted to the house that is subject to normal land assessment and tax computation and the remainder average is Designated Forestland.
Look at the two example of bare land properties. The interactive map provides the view for looking:
2nd Property:https://dial.deschutes.org/Real/InteractiveMap/117569
Looking at other bare land on Bachelor View Rd a general guess at the assessor Market Value of an acre in this area is about $300,00. When that value per acre its protected from tax by an assessment of that is protected from taxation at the Designated Forestland assessment value rate of $79.38 then the non-Designated Forestland Market Value is .....3,779 times greater than the Designated Forestland assessment value.
Keep in mind that this is property in a residential zoned area within the City of Bend!
There may be other ways to terminate this unbelievably unfair situation where a property owner in the city with 2 or more acres of land exclusive of an acre for their home can apply to the county assessor for Designation as Forestland with a promise to plant and grow trees to maturity for sale on the commercial market and receive a property assessment that is thousands of times less than their neighbor that does not have (but certainly could have if they qualified).
One final example.....go figure. Not even enough trees on it to sell them
https://dial.deschutes.org/Real/Index/241568
https://dial.deschutes.org/Real/Index/117545
https://dial.deschutes.org/Real/Index/117545
3 contiguous Designated Forestland properties on Bachelor View road in a city residential zoned area.
Assessor Market Value Total: $2,400,380.00
Tax................................................... $97.11
Been getting this gift since 2005!
End of my post-analysis and thoughts on what I wrote this morning.
Pick and shovel data mining in a pile of crap to find the pony follows:
..........................................................................................
DOR certified Oregon Designated Forestland Assessed Value 2018 -19: $79.38 per acre.
https://www.oregon.gov/DOR/programs/property/Documents/specially-assessed-forestland-values.pdf
To Whom It May Concern:
ORS ORS 321.216 requires that the Department of Revenue certify the specially assessed values of forestland to the counties on or before June 1 of each year. I, therefore, certify that the enclosed schedule contains the 2018-2019 per acre values of forestland in your county.
These certified specially assessed values constitute the department’s determination of the real market value, as of the assessment date for the tax year, of highest and best use forestland.
These certified specially assessed values constitute the specially assessed values, as of the assessment date for the tax year, of designated forestland that is assessed under either ORS 321.354 in the land class for which the certification is being made for western Oregon or ORS 321.833 (formerly 321.812) for eastern Oregon.
The 2018-2019 Maximum Specially Assessed Value (MSAV) was calculated using a three percent increase over last year’s Assessed Value (AV) and is included in the table for your benefit.
The 20% Specially Assessed Value (SAV) is for use on forestland that is assessed under 321.700 to 321.754 (Small Tract Forestland Option).
The 20% MSAV value for the tax year beginning July 1, 2018 was calculated using a three percent increase over last year’s 20% AV and is included in the table for your benefit.
The values in this certification are calculated based on the procedures set out by ORS 321.207 to 213 and OAR 150-321-0200.
Page 2:
Eastern Oregon MSAV – Maximum Specially Assessed Value (Measure 50):
$79.38 per acre.
The Oregon DOR is guided by these referenced ORS extracted from the DOR Certification document:
ORS 321.216
ORS 321.354 (Western Oregon, not applicable to this analysis)
ORS 321.833 (Eastern Oregon)
ORS 321.207 to ORS 321.213
OAR 150-321-0200
The following is an examination of the specific Oregon Revised Statutes law related to to the DOR required Certification of the value for Eastern Oregon Forestland at $79.38 per acre.
ORS 321.216
Certified specially assessed values
(1) On or before June 1 of each assessment year, the Department of Revenue shall adopt specially assessed values of forestland, as of the assessment date for that year. The department shall certify the specially assessed values of forestland in eastern Oregon to the county assessors of eastern Oregon and the specially assessed values of forestland in western Oregon to the county assessors of western Oregon.
(2). The certified specially assessed values constitute:
(a) The department’s determination of the real market value, as of the assessment date for the tax year, of highest and best use forestland in the land class for which the certification is being made; and
(b): The specially assessed values, as of the assessment date for the tax year, of designated forestland that is assessed under ORS 321.354 (Western Oregon)(Common ownership minimum acreage requirements) and ORS 321.833 (Eastern Oregon) (Common ownership minimum acreage requirements) in the land class for which the certification is being made.
(3) Upon receipt of the certified values, the county assessors shall develop tables for each assessment year that reflect, for each class and area, the values determined under this section and that express the values as values per acre. [2001 c.860 §18]
ORS 321.833 states the specific applicability of the requirement of DOR to certify specially specially assessed values of Eastern Oregon forestland. Specifically for 5,000 minimum acres or more.
https://www.oregonlaws.org/ors/321.833
Common ownership minimum acreage requirements
• specially assessed value and maximum assessed value of forestland of large landowners
1. (a) The Department of Revenue shall identify the forestland that is held in common ownership of 5,000 acres or more as of the assessment date for each tax year.
ORS 321.207 to 321.213
The values in this certification are calculated based on the procedures set out by ORS 321.207 :
The Department of Revenue by rule shall develop valuation models to be used to value forestland in western Oregon and eastern Oregon.
It is best to start at ORS Chapter 321 to get the big picture on Forestland..
(2) The valuation models may consider forestland sales, stumpage values, immediate harvest values, log prices or other commercially reasonable factors or data that promote real market value analysis of forestland. [2001 c.860 §15]
It is important to note that the following is an Oregon Administrative Rule and the relationship of an OAR to Oregon Revised Statutes. The difference being what agency makes them and their authority.
OAR 150-321-0200
Forestland Valuation Rule
(1) Purpose: The purpose of this rule is to describe the process used to develop the annual preliminary forestland values and to clarify the establishment of the final certified forestland values (ORS 321.216).
(2) General Principles and Definitions:
(a) For the purpose of this rule, “forestland” has the meaning provided in ORS 321.257(2) for Western Oregon, and ORS 321.805(4) for Eastern Oregon.
Important note #1: The stated purpose of this OAR rule applies solely to describing the process and clarify the final DOR certified forestland values required by Oregon Revised Statute ORS 321.216. This preceding analysis of links contained in ORS 321.216 reveal that ORS is exclusively related and only applicable to the end intent of DOR promulgating to county assessors the valuations of forestland of 5,000 minimum forestland acres or more.
Is that exactly what the DOR certification of Eastern Oregon "specially assessed values" for Highest and Best Use Eastern Oregon Forestland did in explicit compliance with ORS 321.316 requirements 2(a) and 2(b) for the Designated Forestland in the land class of a minimum of 5,000 acres? That is what the certification relates to by the inclusion of "designated forestland that is assessed under either ORS 321.354 (Western Oregon) in the land class for which the certification is being made and 321.833 (Common ownership minimum acreage requirements) in the land class for which the certification is being made." in accordance with ORS 321,316Yes. By my examination I conclude that it certified the specially assessed values of Forestland
https://www.oregonlaws.org/ors/321.805
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