Farm Use Manual, 150-303-422

150-303-422 (Rev. 11-07-22)

2022

Farm Use Manual

www.oregon.gov/dor

i 150-303-422 (Rev. 11-07-22)

Table of contents

Introduction ........................................................................................................................................................................1-1

Qualification chapter ......................................................................................................................................................2-1

Introduction ..................................................................................................................................................................... 2-1

Farm use ...........................................................................................................................................................................2-1

Zoning and planning statutes ..................................................................................................................................... 2-4

Farmland qualification ................................................................................................................................................. 2-6

Non-EFU income requirements .................................................................................................................................... 2-7

Non-EFU applications ....................................................................................................................................................2-9

Non-EFU “gross income questionnaires” ................................................................................................................. 2-11

Requalification .............................................................................................................................................................. 2-11

Exempt farm property .................................................................................................................................................2-12

Homesites .......................................................................................................................................................................2-13

Potential additional tax notation ................................................................................................................................ 2-14

Appeals ..........................................................................................................................................................................2-14

Valuation chapter .............................................................................................................................................................3-1

Introduction .....................................................................................................................................................................3-1

Farm use mass appraisal procedures ..........................................................................................................................3-1

Land classification ..........................................................................................................................................................3-1

Value zones ......................................................................................................................................................................3-1

Land classification and appraisal records...................................................................................................................3-1

Farm board of review .................................................................................................................................................... 3-3

Income approach to farm use land value ................................................................................................................... 3-3

Net income per acre....................................................................................................................................................... 3-3

Capitalization rate ......................................................................................................................................................... 3-3

Farm use income approach examples ......................................................................................................................... 3-4

Other considerations when valuing farm properties .............................................................................................. 3-11

Valuation of dwellings, rural buildings, and real property improvements .........................................................3-12

Valuation of farm and rural homesites ...................................................................................................................... 3-16

Measure 50 MAV limitations ......................................................................................................................................3-18

Disqualification chapter ................................................................................................................................................4-1

Before you disqualify .....................................................................................................................................................4-1

Disqualification and special assessment programs ..................................................................................................4-1

Types of disqualification ...............................................................................................................................................4-1

Reviewing an account for disqualification .................................................................................................................4-1

Processing a disqualification and Measure 50 requirements ................................................................................. 4-2

Effective date of disqualification ................................................................................................................................. 4-2

Disqualification timing—general rule ....................................................................................................................... 4-3

Disqualification timing—special provisions ............................................................................................................. 4-3

No longer in use disqualifications .............................................................................................................................. 4-4

Removal of land from an EFU zone disqualification ............................................................................................... 4-5

Non-farm dwelling in an EFU zone disqualification ............................................................................................... 4-6

ii 150-303-422 (Rev. 11-07-22)

Disqualification of land zoned for urban uses .......................................................................................................... 4-6

Taxpayer request disqualification ................................................................................................................................4-7

Non-EFU income disqualification ............................................................................................................................... 4-8

Subdivision disqualifications ...................................................................................................................................... 4-9

Homesite disqualifications ..........................................................................................................................................4-11

Government exchange of land ....................................................................................................................................4-12

Conservation management effect on disqualification ............................................................................................4-12

Disqualification notification letter .............................................................................................................................4-12

Appeals ..........................................................................................................................................................................4-13

Additional tax chapter ....................................................................................................................................................5-1

General information .......................................................................................................................................................5-1

Additional tax upon disqualification ..........................................................................................................................5-1

Additional tax deferred ................................................................................................................................................ 5-2

No additional tax ........................................................................................................................................................... 5-6

Non-EFU abatement ...................................................................................................................................................... 5-7

Appendix ...............................................................................................................................................................................6-1

Appendix A: Farm use legislation and history ..........................................................................................................6-1

Appendix B: Resource information ...........................................................................................................................6-17

Appendix C: Forms and publications ....................................................................................................................... 6-31

Appendix D: Farm use certification and capitalization ......................................................................................... 6-49

Appendix E: Farm use valuation ............................................................................................................................... 6-53

Appendix F: Disqualification ..................................................................................................................................... 6-68

1-1 150-303-422 (Rev. 11-07-22)

The purpose of Farm Use Manual is to develop a uni-

form approach for the special assessment of farm prop-

erties. The manual serves as a guide to assist counties

with interpretation of farm use laws and administra-

tive rules.

An internal group of Department of Revenue property

tax specialists and an external group of county assessor

property tax specialists have developed this manual.

The Farm Use Manual is organized into sections that

follow the statutes. A table of contents identifies each

section. A tab identifies each section. The appendix

contain supporting information such as charts, forms,

diagrams, and examples to assist in interpreting stat-

utes and processing accounts.

If you have any comments concerning this manual or

questions on farm use assessment, contact:

Oregon Department of Revenue

955 Center Street NE

Salem Oregon 97301-2555

www.oregon.gov/dor

503-378-4988 or 1-800-356-4222

[email protected]

other languages.

Introduction

In 1961, the Oregon Legislature began to adopt farm

use special assessment laws. The Oregon Legislature,

administrative rules, and Tax Court, Attorney General,

and the Department of Revenue decisions have modi-

fied or clarified these special assessment laws since

then. This comprehensive manual details the complexi-

ties of this program.

The legislative intent can be found in Oregon Revised

Statute (ORS) 308A.050 and is summarized as follows:

ORS 308A.050: The Legislative Assembly recog-

nizes that agriculture and related land uses con-

tribute significantly to Oregon’s character and

economy and is in the interest of all citizens of

this state. Valuation of farm properties is based

on agricultural production capability. Therefore, it

is the declared intent of the Legislative Assembly

that bona fide farm properties be assessed for ad

valorem property tax purposes at a value that is

exclusive of values attributable to urban influences

or speculative purposes.

Foreword

Qualification, valuation, and disqualification statutes

regulate farm use special assessments. The following is

a brief discussion on each of these categories:

Qualification. Land within an exclusive farm use (EFU)

zone automatically qualifies for farm use special assess-

ment if there is an active bona fide farm use with an

intent to make a profit from farming as defined under

ORS 308A.056.

Land not within an EFU zone is called non-exclusive

farm use (non-EFU) land. Non-EFU land must also

meet the same qualifications of ORS 308A.056. In addi-

tion, non-EFU land can only qualify by application and

must meet minimum income requirements outlined in

ORS 308A.071. “Gross income questionnaires” are peri-

odically mailed to non-EFU landowners to verify that

these requirements continue to be met.

The statutes for EFU and non-EFU land are to be inter-

preted and addressed separately from each other. Any

portion of land may qualify for special assessment

while other portions may be assessed under differ-

ent assessments or exemptions. Each portion can only

qualify for ONE special assessment at a time. It is pos-

sible to have any combination of portions of a property

under EFU, non-EFU, or a different special assessment

such as forestland or portions not under special assess-

ment. Portions not under special assessment such as

dwellings, buildings, equipment, or land not under

special assessment may be assessed based on market

value or some other assessment or exemption. Qualifi-

cation requirements apply only to the land, homesite, or

onsite developments that are being specially assessed.

Valuation. Under ORS 308A.092, the counties shall use

a legislated income approach when valuing qualified

land as follows:

The legislated income approach consists of dividing the

net income of the land by a capitalization rate to calcu-

late a farm use value.

Annually, the assessor is responsible for conducting

farm income studies for each land class and area. The

assessor utilizes the Department of Revenue certified

interest rate and the local property tax rate to calculate

the specially assessed value (SAV).

The maximum special assessed value (MSAV) limita-

tions of Measure 50 apply to both EFU and non-EFU.

MSAV valuation tables for each land class and area are

required to have a Measure 50 calculation each year

under ORS 308A.107. Each MSAV table matches with a

corresponding SAV table.

1-2 150-303-422 (Rev. 11-07-22)

Valuation of farmland is complex in Oregon due to

the wide variety of climates, rainfall, soil capabilities,

farming operations, and land uses. In the “Valuation”

section of this manual, there are several basic examples

for the various farm land uses around the state. Spe-

cialized farms are beyond the scope of this manual.

Homesites, which include domestic onsite develop-

ments, are valued separately using a different valuation

procedure under ORS 308A.256.

Any portion of the land that qualifies can receive farm

use value. Any portion that doesn’t qualify is assessed

based on real market value under ORS 308.146, unless

the land is in a different assessment program or is

exempt from property taxes.

Disqualification. EFU and non-EFU statutes are to be

interpreted separately when considering the disquali-

fication of farmland or homesites. There are many rea-

sons for disqualification. Any portion of a property

not maintaining farm use may be disqualified. It is

also possible that a portion of a property may be dis-

qualified and a portion may continue special assess-

ment. One can’t go back in time to correct the roll for

a disqualification so it is important to be sure the dis-

qualification of EFU or non-EFU land is timely. If the

disqualification timelines are missed, the change in

assessment will occur for the next assessment and tax

year and if in the next assessment and tax year the land

meets qualification requirements the disqualification

will be invalid.

Once land has been disqualified, the notification pro-

cedures under ORS 308A.718 and 308A.724 must be

strictly followed. For procedures following a disquali-

fication, see “Disqualification notification procedures”

in the appendix. The disqualification notification pro-

cedures addresses procedures following a disquali-

fication from EFU, non-EFU, wildlife habitat, and all

forestland assessment programs.

Summary

This manual is designed to help you interpret the stat-

utes in a uniform, consistent manner. Additional charts

and information have been included in the appendix

as a quick reference to assist in understanding quali-

fication, valuation, and disqualification procedures.

While processing farm properties can be accomplished

in mass, some properties may need to be considered on

their individual merits.

2-1 150-303-422 (Rev. 11-07-22)

Introduction

Exclusive farm use (EFU) zoned land qualifies for “farm

use” special assessment provided the owner maintains

an acceptable farm practice with the intent to make a

profit as defined by ORS 308A.056. Landowners don’t

need to apply for land to be qualified and assessed as

farm use.

Exclusive farm use zones are regulated by zoning and

planning statutes and local zoning ordinances. Allow-

able and conditional uses in an EFU zone are defined in

ORS 215.213 or 215.283.

Non-exclusive farm use (non–EFU) land must also

maintain an acceptable farm practice with the intent to

make a profit as defined by ORS 308A.056. Addition-

ally, non–EFU landowners must file an application with

the county assessor in the first year the property quali-

fies for special assessment. Each year after the initial

application, the farm operation must meet minimum

gross income requirements by responding to the asses-

sor’s request for an income questionnaire. As part of

meeting the gross income requirements of an applica-

tion or questionnaire, land owners should be informed

that they must file a Schedule F or other appropriate

income tax reporting annually for their farm operation

as specified in ORS 308A.071(3) and (4).

Non-EFU special assessment can be in any zone, except

EFU zones. Parcels of land in zones other than EFU

often have a mix of uses such as residential subdivi-

sions, forestland, commercial, or industrial.

EFU or non-EFU land identified with an approved

Measure 37 or 49 claim are not necessarily restricted to

current planning or zoning ordinances depending on

the terms of the Measure 37 or 49 claim. The terms of

the approved Measure 37 or 49 claim override or waive

any land use regulations that the land would otherwise

be subject to without necessarily changing the zone. It

is recommended to contact the planning department to

determine whether the claim affects qualification for

special assessment.

Some EFU or non-EFU parcels may have a mix of

special assessments. For example, a portion may be

in forestland or wildlife habitat special assessment,

while other land area portions may be assessed based

on market value. Only the land area that is actively

farmed as specified in ORS 308A.056(1) or land iden-

tified for current employment for farm use under

ORS 308A.056(3) qualifies for farm use. EFU waste-

land qualifies for farm use special assessment under

ORS 308A.056(3) and non-EFU wasteland may qualify

for farm use special assessment by a special annual

Qualification

application under ORS 308A.074. Each portion of a

parcel is identified for its qualifying land uses. While

a parcel or tax account may be assessed under several

different special assessments or exemptions at the same

time, no area within the parcel or tax account may have

more than one special assessment or exemption on the

same land at the same time.

EFU and non-EFU homesites used in conjunction with

a farm operation may qualify for a separate special

assessment under ORS 308A.250 to 308A.259. By defi-

nition under ORS 308A.253, the homesite is defined as

only the land area under the dwelling and domestic

onsite improvements. The homesite dwelling, even

though it is used for farming purposes, is assessed

based on real market value. Few non-EFU homesites

receive special assessment because of strict qualifica-

tion requirements of ORS 308A.253(3).

Real property improvements such as dwellings, farm

buildings, farm processing equipment, automatic feed-

ers, and irrigation equipment don’t qualify for special

assessment and are assessed based on their real market

value.

Personal property improvements such as farm machin-

ery, farm equipment, irrigation equipment, crops, and

livestock are exempt from property taxation.

In summary, only land can qualify for “farm use”

special assessment. Only qualified homesites used in

conjunction with specially assessed farmland receive

“homesite special assessment.” Qualified farm use

land and qualified homesites are valued separately and

differently. A parcel can have portions that are under

farm use special assessment with different portions of

the same parcel under a different special assessment,

portions of the same parcel not under special assess-

ment can be assessed based on market value, or por-

tions may be exempt from property taxes.

Farm use

Farm use defined [ORS 308A.056(1)]

ORS 308A.056(1) defines “farm use” in part, as follows:

“Farm use” means the current employment of land

for the primary purpose of obtaining a profit in

money by:

a. Raising, harvesting, and selling crops;

b. Feeding, breeding, managing or selling livestock,

poultry, fur-bearing animals, honeybees, or the

produce thereof;

c. Dairying and selling dairy products;

2-2 150-303-422 (Rev. 11-07-22)

d. Stabling or training equines, including but not lim-

ited to, providing riding lessons, training clinics

and schooling shows;

e. Propagating, cultivating, maintaining or harvest-

ing aquatic species and bird and animal species to

the extent allowed by the rules adopted by the State

Fish and Wildlife Commission;

f. On-site constructing and maintaining equipment

and facilities used for the activities described in

this subsection;

g. Preparing, storing or disposing of, by marketing,

donation to a local food bank or school or other-

wise, the products or by-products raised for human

or animal use on land described in this section;

h. Implementing a remediation plan previously pre-

sented to the assessor for the county in which the

land that is the subject of the plan is located

i. Using land described in this section for any other

agricultural or horticultural use or animal hus-

bandry or any combination thereof;

j. Growing cultured Christmas trees and hybrid

hardwoods (cottonwoods) on cropland under

intensive cultivation.

“Farm use” does NOT include the use of land subject

to timber and forestland taxation under ORS chapter

321, except land used exclusively for growing cultured

Christmas trees or land described in ORS 321.267 (3) or

321.824 (3) (relating to land used to grow certain hard-

wood timber, including hybrid cottonwood).

Additional qualifying uses defined as

“current employment” [ORS 308A.056(3)]

Current employment activities identified under ORS

308A.056(3) qualify for “farm use” even if the land isn’t

used with the intent to make a profit from agricultural

production as required by ORS 308A.056(1). Also, as

specified in ORS 308A.071(2)(b), land qualifying for

current employment under ORS 308A.056(3) isn’t tested

for non-EFU income requirements. Land that meets

the definition of current employment receives farm

use special assessment the same as any other farmland

using the appropriate value classification under ORS

308A.107 as if the land was employed for its highest and

best farm use.

As specified in ORS 308A.056(3) land is currently

employed for “farm use” if the land is:

• Farmland subject to any farm-related government

program;

• Land lying fallow for one year as a normal and regu-

lar requirement of good agricultural husbandry;

• Land planted in orchards, cultured Christmas trees

or other perennials prior to maturity (see also “Non-

EFU applications”), [see ORS 308A.056(4) for Christ-

mas tree growing requirements], (see addenda for

“List of perennial crops and first year they should

meet requirements”);

• Wasteland in an EFU zone, dry or covered with water,

neither economically tillable nor grazeable, lying in

or adjacent to, and in common ownership with the

farm-use land;

Note: non-EFU wasteland requires an annual appli-

cation as specified in ORS 308A.074.

• Land under farm related buildings and certain farm

processing facilities;

Note: Doesn’t include the homesite area. Qualified

farm homesites are not assessed using land class

tables. Homesites receive a different type of special

assessment.

• Water impoundments lying in or adjacent to and in

common ownership with the farm-use land;

• Any land constituting a woodlot, not to exceed 20

acres, contiguous to and owned by the owner of the

land specially valued for farm use;

• Land lying idle for no more than a year due to the ill-

ness of the farmer or member of the farmers immedi-

ate family (see OAR 150-308-1010);

• Land used to grow certain cottonwood timber

described under ORS 321.267(3) or 321.824(3);

• Land used for the processing of farm crops into bio-

fuel as specified by statute.

Additional discussion of “farm use” definitions

under ORS 308A.056(1) and (3)

Intent for profit

The Oregon tax court in Everhart, provides in-depth

information for the interpretation of intent for profit

when qualifying land for farm use special assessment.

Following are some of the main points of the Everhart

case:

Farm use is not required to actually result in a money profit.

Undoubtedly, the legislature recognized the risks of farming.

It has not imposed any specific income requirements for land

in an EFU zone. It merely requires that the person engage in

farm activities with the primary purpose of obtaining a profit.

It is also clear that the legislature viewed bona fide farms as

those farms that produced products or crops sold in the open

market. Small operations such as raising chickens for fam-

ily use or a few pigs to trade with a neighbor for some other

product or service do not qualify. The legislature’s intent is

to grant the special assessment to farmers who exchange their

crops for “money.”

2-3 150-303-422 (Rev. 11-07-22)

The court further stated that “the context in which the word

profit is used indicates that the legislature was concerned

with measurable direct expenditures and income from the use

of the land. Indirect profits, such as savings on family food

budgets, and indirect expenses, such as invested capital, are

excluded from consideration.”

Everhart v. Dept. of Rev., TC No. 4380 WL 1062132

(Nov. 17, 1999)

Stabling or training equines

Farm use includes the stabling and training of equines

(horses) for profit under ORS 308A.056(1)(d). Stabling

connotes the presence of a building, stall or structure

that provides shelter or housing for horses. Boarding

(or care) involves the giving of some level of care for

horses, such as food or supervision. If the boarding care

involved shelter or housing, it can qualify for farm use.

The use of land by an operator that is in the business of

pasturing of others’ pleasure horses for profit qualifies

as the feeding of livestock under ORS 308A.056(1)(b).

The personal use of land primarily for pleasure horses

doesn’t qualify for farm use, although some incidental

personal use for pleasure horses is allowable on land

that qualifies for farm use.

Note: The breeding and selling of horses qualifies

under ORS 308A.056(1)(b) the same as cattle or any

other livestock operation when there is intent for profit.

Land lying fallow

For land lying idle use the “farm use” land classifica-

tion tables that would be appropriate for the land as if

the land were in “farm use” production. Fallow land is

currently employed in a farm use if it is “lying fallow

for one year as a normal and regular requirement of

good agricultural husbandry.” ORS 308A.056(3)(b).

“Letting land lie fallow is not an excuse, but a decision

to be made before not after the fact.”

Jenkins v. Dept. of Rev.,TC No. 3544, WL 468070 at *2

(Aug 24, 1994).

See also Meyer v. Wasco Co. Magistrate case TC-MD

050682E dated 1-17-06.

Land under processing facilities in EFU or non-EFU

zones—ORS 308A.056, 215.213, and 215.283

Land under processing facilities in EFU or non-EFU

zones qualifies for farm use special assessment if the

facility for the processing of farm crops is located on

a farm operation and at least one-quarter of the farm

crops are processed at the facility. To receive farm use

special assessment for the land under the facility the

facility must not exceed a total of 10,000 square feet of

processing floor area exclusive of the floor area desig-

nated for preparation, storage, or other farm use.

(See OAR 150-307-0460 for a definition of farm

processing.)

Example 1: A five-building facility has one building

with multiple floors. It is a gravity operation with a

2,000-square-foot processing area on the upper floor,

5,000 square feet on the main floor, and 5,000 square

feet in the basement. This building exceeds 10,000

square feet of processing area, so the entire five-build-

ing processing facility will be denied or disqualified.

The 10,000 square foot measurement applies to the pro-

cessing area(s) within the facility. Once it is determined

the processing area meets the 10,000 square foot mea-

surement, then the land under the entire processing

facility qualifies. Generally, this can be broken down

into three areas as follows:

1. Any land under supporting buildings or structures

associated with the processing area such as main-

tenance, office, cold storage, warehousing, ship-

ping and receiving areas also qualify for farm use

special assessment if the processing facility contin-

ues to qualify.

2. Any land area necessary for the functional opera-

tion of the processing facility such as parking,

loading, or storage areas also qualifies for farm use

special assessment as long as the processing facil-

ity continues to qualify.

3. Land under any non-farm areas such as public tast-

ing rooms and retail sales or non-farm buildings

not used in conjunction with the processing facility

or the farm operation won’t receive farm use spe-

cial assessment.

For land under processing facilities, use the farm use

land classification tables that would be appropriate for

the land as if the land were in “farm use” production.

Land under buildings supporting accepted farm

practices [ORS 308A.056(3)(f)]

Land under farm related buildings such as barns,

machine sheds, general or special purpose buildings,

etc., qualify for EFU or non-EFU special assessment

if the buildings are used to support accepted farm-

ing practices of the farm unit receiving special assess-

ment. Land under farm related buildings shall include

the area around the buildings for access and parking,

which is a necessary function for the farm operation.

For land under buildings supporting accepted farm

practices, use the “farm use” land classification tables

that would be appropriate for the land as if the land

were in “farm use” production.

Woodlots (apply to both eastern and western Oregon)

No application is necessary to assess up to a maxi-

mum of 20 woodlot acres for “farm use” under ORS

2-4 150-303-422 (Rev. 11-07-22)

308A.056(3) current employment statutes. Any acres

EFU or non-EFU that meet the following criteria may

qualify:

The woodlot must be contiguous to the farm unit acres

receiving farm use special assessment and the wood-

lot must also be owned by the owner of the contiguous

land specially assessed for farm use. For purposes of

ownership, all owners of the farm unit are considered

to be the owner.

A maximum of 20 acres of woodlot is allowed per

farm unit. The 20 woodlot acres can be comprised of

one woodlot or may be in several different locations

and parcels miles apart as long as the woodlot acres

are on the owners land and are contiguous to the spe-

cially assessed farm unit.

Any land constituting a woodlot that meets the above

criteria may qualify.

No definition exists to define the type and volume of

wood necessary to identify land qualifying for wood-

lot. As long as the land has potential useful wood vol-

ume up to 20 acres per farm unit can qualify. Woodlot

acres may have sufficient stocking to qualify for “for-

estland” special assessment, but if the owner chooses to

have the land specially assessed as a farm woodlot they

may do so and receive up to 20 acres as farm woodlot.

For woodlots use the “farm use” land classification

tables that would be appropriate for the land as if the

land were in “farm use” production.

Accepted farming practice

[ORS 308A.056(4)(a)]

The farming activity must be an “accepted farming

practice,” which means the farming is conducted in a

“mode of operation that is common to farms of a simi-

lar nature, necessary for the operation of such farms

to obtain a profit in money, and customarily utilized

in conjunction with farm use.” This definition not only

defines what would qualify for “farm use,” but is also

basic to the income approach when analyzing land clas-

sification tables for their “highest and best use.” The

highest and best use for land use classification tables

needs to represent what would qualify for “farm use”

special assessment.

[See ORS 308A.056(1) for a definition of qualifying

“farm use” activities.]

“Accepted farming practice” varies widely depending

on the farming activity being conducted and geograph-

ical differences. An excellent source of information is

the county’s Oregon State University Extension Service.

Zoning and planning statutes

Zoning and planning statutes regulate land use. They

are not property tax assessment statutes. While there

may occasionally be similarities between zoning and

planning land use laws, don’t use these statutes to

regulate property tax assessment. Always process the

qualification of the land under Chapter 308A special

assessment statutes. If the zoning or planning statute

instructs you to disqualify land that is currently quali-

fied, then process the account under Chapter 308A dis-

qualification procedures.

The following planning statutes regulate rural land

uses:

Zoning ordinances establishing exclusive

farm use zones and definitions (ORS 215.203)

This statute defines “farm use” for the purposes of

regulating farm use activities within an exclusive farm

use zone. The statutory language is very similar to the

“farm use” definitions of ORS 308A.056. Historically,

ORS 215.203 defined “farm use” to qualify land for farm

use special assessment. This caused confusion, because

property tax statutes and planning statutes are often

different. In 1999 when the farm use special assessment

statutes were reorganized, the definition of “farm use”

for special assessment purposes moved to its own stat-

ute under ORS 308A.056. Beginning with the 1999 reor-

ganization, ORS 215.203 “farm use” language can no

longer be used to qualify land for special assessment,

instead ORS 215.203 is only used to identify farm uses

for zoning and planning purposes.

Permitted uses in an exclusive farm use zone

(ORS 215.213 & 215.283)

Both ORS 215.213 and 215.283 regulate uses that are per-

mitted in an exclusive farm use zone. Originally, ORS

215.283 was the primary statute to regulate exclusive

farm use zones. In the 1980s, planning concepts were

developed to regulate “marginal lands.” For counties

that adopted marginal land concepts, ORS 215.213 was

created to allow changes for marginal lands. Counties

that didn’t adopt marginal land concepts remained

under ORS 215.283.

The first paragraphs of [ORS 215.213(1) and 215.283(1)]

identify land uses that may be established in any area

zoned for exclusive farm use. The second paragraphs of

[ORS 215.213(2) and 215.283(2)] identify non-farm uses

that require approval from a local governing body or

its designee.

A zone not in compliance with these permitted or

conditional uses may have to be specially assessed as

a non-EFU zone. If you are uncertain whether a zone

qualifies as EFU, it is recommended you contact your

2-5 150-303-422 (Rev. 11-07-22)

local planning office and carefully review the details of

the zoning ordinance with ORS 215.213 if your county

has adopted marginal lands or ORS 215.283 if your

county is a non-marginal lands county.

Non-farm dwelling in an exclusive farm use

zone (ORS 215.236)

ORS 215.236 applies to land in EFU and affects the

qualification of land for EFU farm use, forestland,

open space, and wildlife habitat special assessment

programs.

When an owner of the land obtains a permit to con-

struct a “non-farm dwelling” from the local planning

department, under ORS 215.236(4), the lot or parcel

where the dwelling will be located is required to be

disqualified and additional taxes paid prior to final

approval of the non-farm dwelling land use application

for any land under EFU farm use, forestland, and open

space special assessment programs. A lot or parcel dis-

qualified from one of these special assessments listed

in ORS 215.236(4) must remain disqualified from spe-

cial assessment unless it can meet the requirements of

ORS 215.236(5) or 215.236(6).

ORS 215.236(5) (Requalification statute)

To satisfy ORS 215.236(5) the local planning depart-

ment will combine a contiguous lot or parcel with

the parcel subject to ORS 215.236 into one legal par-

cel. The acquisition of a lot line adjustment is a por-

tion of a parcel and won’t meet the requirements of

ORS 215.236(5). An entire lot or parcel must be com-

bined. When two parcels are combined to satisfy

ORS 215.236(5) it isn’t necessary for the newly com-

bined lot or parcel to meet or exceed farm-related

dwelling requirements such as the minimum zon-

ing parcel size requirements. ORS 215.236(5) only

requires the combining of contiguous parcels to

requalify the land for EFU farm use or other spe-

cial assessments.

Sometimes the dwelling parcel will be partitioned

from a larger parcel so it is important to identify

the lot or parcel the dwelling will be located on.

Only the lot or parcel the dwelling is physically

located on will be subject to the requirements of

ORS 215.236. Any contiguous parcels not subject to

ORS 215.236 may continue to receive EFU farm use

or other types of special assessment.

ORS 215.236(6) (Only applies in counties that

allow WLH) (conservation easement special

assessment applies to all counties)

The special assessment restrictions of ORS 215.236

only apply to the special assessment programs

identified under ORS 215.236(4). Both wildlife habi-

tat (WLH) and conservation easement (CE) special

assessment programs are not listed for disqualifi-

cation under ORS 215.236(4).

However, land already in WLH or CE special

assessment at the time an owner applies for a non-

farm dwelling and is later disqualified will be sub-

ject to ORS 215.236(5) before qualifying for any of

the special assessments listed under ORS 215.236(4).

As specified in ORS 215.236(6) and (7), land that has

been disqualified under ORS 215.236(4) may qual-

ify for WLH or CE special assessment without hav-

ing to meet the combining of land requirements of

ORS 215.236(5).

After the land has been disqualified and any addi-

tional taxes paid under ORS 215.236(4) the land

may requalify for CE or WLH special assessment

under ORS 215.236(6) or (7), however, not all coun-

ties allow WLH special assessment. If the land

requalifies under ORS 215.236(6) or (7) for WLH

or CE special assessment, the account will be sub-

ject to ORS 308A.724(4). ORS 308A.724(4) specifies

any WLH or CE special assessment land that was

previously subject to ORS 215.236(5) may not apply

for a different special assessment without first sat-

isfying the requirements of ORS 215.236(5). How-

ever, land owners may change from CE to WLH, or

WLH to CE without satisfying the requirement of

ORS 215.236(5).

(See “Disqualification” section of this manual for

the disqualification criteria of ORS 215.236.)

An owner of land can’t apply for non-EFU farm use

special assessment as long as the land remains located

in an EFU zone. If the urban growth boundary (UGB)

changes, the zone will remain EFU until the city rezones

it. EFU land within a UGB is subject to ORS 215.236.

Any land that a city or county governing body changes

under ORS 308A.709(1)(e) or owner-initiated change

to other than an EFU zone is no longer subject to ORS

215.236 and may requalify for special assessment upon

meeting special assessment requirements the same as

any other land newly qualifying.

ORS 215.236 is a very strict statute that may leave the

land disqualified from special assessment indefinitely

until the requalification requirements of ORS 215.236(5)

are satisfied. Often, owners continue to farm the land

or engage in forest practices for years on land that is

subject to ORS 215.236 that would otherwise meet

farm use or forest use special assessment qualification

requirements. There is no time limit.

Land zoned for urban uses (ORS 197.754)

A local government may identify land inside an urban

growth boundary for which the local government

2-6 150-303-422 (Rev. 11-07-22)

intends to provide urban services within the next five

to seven years.

Upon adopting a capital improvement plan, the gov-

erning body may zone the area for urban uses.

On the date the zone for urban uses is established, the

assessor must no longer qualify any more land under

EFU or non-EFU special assessment. Since this is a zone

change, existing EFU land must be disqualified under

ORS 308A.113 and may be requalified as non-EFU spe-

cial assessment under ORS 308A.077. Following the

change in special assessment under ORS 308A.706(1)(d)

as specified in ORS 308A.724, the owners will have five

years to meet the use requirements of ORS 308A.068

and income requirements of ORS 308A.071.

Any land that ceases to be used for farm, use follow-

ing the date the area is zoned for urban uses, may not

requalify for EFU or non-EFU special assessment, as

long as the land continues to be zoned for urban uses.

Any land that has statutory requalification special pro-

visions, such as ORS 308A.089 non-EFU income dis-

qualifications, may requalify if the land was in farm

use special assessment at the time the area was zoned

for urban uses. Disqualified land may not qualify for

farm use special assessment (rollover) from a different

special assessment listed in ORS 308A.706(1)(d) if the

land wasn’t in farm use special assessment at the time

the land was zoned for urban uses.

(See also “Disqualification” and “Additional tax” sec-

tions of this farm manual.)

Farmland qualification

It is important to make a distinction between qualified

farmland and farmland that doesn’t qualify for special

assessment. In a parcel of land, only the area of land

that meets the farm use qualification requirements will

qualify for farm use special assessment. So there may

be areas within a parcel that are being farmed, but are

not in a qualifying farm use, such as non-EFU land that

is being developed for farm use in phases. At the time

of application for non-EFU, some of the land may have

a three-year farm use history while other portions have

just been put to farm use within the last year or two

and will need an additional application when the land

use can meet the minimum three of five year gross

income test. There may also be land areas that are lying

idle while other land areas are in production and under

farm use special assessment. Portions that don’t qualify

for farm use special assessment or a different special

assessment or exemption, will be assessed based on

market value unless the law specifies otherwise.

Any qualified farm use land located in an exclusive

farm use zone (EFU) must be assessed following EFU

statutory criteria. Any qualified farm use land in all

other zones must be assessed following non-exclusive

farm use (non-EFU) statutory criteria.

(See also the “Introduction” of this manual for inter-

preting EFU and non-EFU statutory criteria).

Farmland within an EFU zone (ORS 308A.062)

No application is required to qualify and assess land

for farm use special assessment in an EFU zone when

the owner is using the land exclusively for “farm use”

with the intent to make a profit as defined and speci-

fied in ORS 308A.056. Exclusive use doesn’t mean only

farm use. Incidental non-farm uses are allowed pro-

vided the non-farm uses don’t interfere or preclude the

land from meeting farm use requirements. If incidental

uses become the predominant use of the land, the land

or any portion may be subject to disqualification.

Qualification for special assessment is determined as

of the January 1 assessment date. Land beginning a

qualifying farm use on January 1 or later of an assess-

ment year will be qualified in the next assessment year

provided the land continues in a qualifying “farm

use.” Each acre of land in a tax account is reviewed for

qualification. Any acres not used for farm use, defined

under ORS 308A.056, won’t be included in farm use

special assessment.

The statutes don’t have a provision for the owner to

request disqualification of EFU land from farm use

special assessment when the owner uses the land for

“farm use” with the intent to make a profit. If the asses-

sor discovers EFU land is used for a qualifying “farm

use” with the intent to make a profit, the land must be

placed under EFU farmland special assessment, unless

otherwise required by statute.

Non-EFU farmland (ORS 308A.068)

Non–EFU land requires an application under ORS

308A.077 and must meet the same ORS 308A.056 “farm

use” criteria as EFU farmland and for the preceding

two years had been in a qualifying “farm use”. In addi-

tion, non-EFU land must meet the minimum income

requirements of ORS 308A.071. Qualification for special

assessment is determined as of the January 1 assess-

ment date. Once qualified, non-EFU land is valued at

its value for farm use in accordance with ORS 308A.107

using the same valuation tables and land classification

system as EFU land. Each acre of land in an application

is identified by tax account and is reviewed for quali-

fication. Any acres not used for a qualifying farm use

won’t be specially assessed.

2-7 150-303-422 (Rev. 11-07-22)

Non-EFU income requirements

Non-EFU minimum income requirements

[ORS 308A.071(2)(a)]

Farmland isn’t used exclusively for farm use unless in

three out of the five non-flood and non-drought calen-

dar years immediately preceding the January 1 assess-

ment date, the farmland was operated as a part of a

farm unit that has produced a gross income from farm

uses in the amount applicable to the following unit

sizes:

• Farm unit of 6 1/2 acres or less.

— Gross farm income shall be at least $650.

• Farm unit of more than 6 1/2 acres, but less than 30

acres.

— Gross farm income shall be at least equal to the

product of $100 multiplied by the number of acres

and any fraction of an acre of land included.

Example: 25.83 acres x $100 = $2,583 minimum

required gross farm income.

• Farm unit of 30 acres or more.

— Gross farm income shall be at least $3,000.

OAR 150-308-1010 defines a farm unit as a farming

enterprise, which includes all parcels being farmed by

a single operator, whether the operator owns or leases

the farmland. The land in a farm unit isn’t required to

be contiguous and may be located anywhere in Oregon.

Non-flood and non-drought years need to meet the

criteria of ORS 308A.071(6). The landowner or opera-

tor needs to skip over any years that meet the criteria

of ORS 308A.071(6) and still report five full calendar

years of farm income. Each year is determined sepa-

rately. Income can’t be carried over or averaged with

other years.

Determining the required gross income

To arrive at the number of acres for purposes of deter-

mining the required gross farm income amount, the

acres devoted to farm uses under ORS 308A.056(1) are

subject to the income test.

(See “Farm use defined [ORS 308A.056(1)]” in this sec-

tion of the manual for a list of qualifying farm uses.)

For purposes of determining the required gross farm

income amount, ORS 308A.071(2)(b) requires any

acres devoted to “current employment” under ORS

308A.056(3) and the land, not exceeding 1 acre, used as

a homestead shall not be included in the income test.

(See “Additional qualifying uses” defined as ‘current

employment’ [ORS 308A.056(3)]” in this section of the

manual for a list of qualifying current employment

uses.)

Example: A 100-acre parcel with a 1-acre homesite has

20 acres in woodlot, 50 acres in forestland, 20 acres

in cropland, and the rest is wasteland. The income

requirement is $2,000 for the 20 acres identified as crop-

land under ORS 308A.056(1). All of the other acres are

excluded from the acres subject to income testing for

the following reasons:

The non-EFU homesite is specifically excluded from

acres subject to the income test under ORS 308A.071(2)

(b). The non-EFU homesite may qualify for home-

site special assessment by separate application if the

owner can meet the qualification requirements of ORS

308A.253.

The 20-acre woodlot is currently employed under ORS

308A.056(3). Any land currently employed under ORS

308A.056(3) is specifically excluded as specified in ORS

308A.071(2)(b).

The 50 acres of forestland is a different special assess-

ment and is specifically excluded from farm use under

ORS 308A.056(2).

Non-EFU wasteland may qualify for farm use special

assessment only by separate application under ORS

308A.074 and isn’t included in the number of acres to be

tested for farm use income.

(For more examples, see “Additional examples of

income requirements” in this section of the manual.)

Reviewing the reported income

To determine the required gross income amount, use

$100 per acre, but once the required income amount has

been determined, it isn’t required that each acre must

produce $100. To maintain qualification for farm use,

all acres are required to produce farm income. Some

acres may be marginal and produce much less than

$100; while it is possible that 1 acre may produce all

of the required gross income. All that is required is

that the total income from the “farm unit” produces

at least the required gross income amount. (See OAR

150-308-1010 for definition of “farm unit.”)

The farm income that can be used to satisfy the

required gross income must come from farm produc-

tion or acceptable farm use activities.

Farm production is the use of the farm land to pro-

duce income from the sale of farm products or farm

by-products.

Farm use activities may include, but isn’t limited to,

farm related service income such as stud fees, bee pol-

lination, stabling, or training horses.

2-8 150-303-422 (Rev. 11-07-22)

For purposes of testing, the following types of income

are not farm income:

1. Income from the sale of wood products from the

farm woodlot.

2. Income from the sale of harvested forest products.

Note: Christmas trees are a farm product and the

income from these trees qualify as farm income.

Income from the sale of forest products grown in

a farm nursery operation qualify as farm income

from the sale of nursery stock.

3. Government payments are not income produced

from the sale of farm products.

These are often payments to subsidize farm income

or may be payments not to grow certain farm crops.

Land in farm related government programs qualify

for “current employment” under ORS 308A.056(3)

and these acres are not included in the required

gross income test.

Any income from actual farm production or farm

use activities on land receiving government pay-

ments or in a farm related government program

can be used as part of the income for the “farm

unit.” Just the government payments can’t be used

to satisfy the required gross income test.

4. Custom hiring such as leasing out farm equip-

ment or income from custom farm labor doesn’t

qualify as income from farm use activities. These

are incomes received for services not related to the

farmland being qualified.

5. Any farm income not from the production of the

farmland of the farm unit being tested.

6. The imputed value of farm products from barter-

ing or donations don’t comply with the farm use

requirement to make a profit in money. (Wood v.

Lane County TC-MD 080675C, Feb. 26, 2009)

7. Donations do not count as personal consump-

tion or gross income for income qualification OAR

150-308-1010.

Testing of non-EFU land owned separately

[ORS 308A.071(2)(c)]

Farm unit means a farming enterprise which includes

all parcels being farmed by a single operator, whether

the operator owns or leases the farmland. (OAR

150-308-1010)

The assessor shall consider the “farm use” of the land

by the owner, renter or operator together with any other

lands that are a part of one farming unit being operated

by such owner, renter or operator (ORS 308A.059). The

land in a farm unit isn’t required to be contiguous and

may be located anywhere in Oregon.

Farm parcel means the contiguous land under the

same ownership whether it is assessed as one or more

than one tax lot [ORS 308A.071(7)(a)].

Net share crop rental is the value of any crop or farm

product the landowner receives for the payment of leas-

ing or renting land for farm use production. This value

is further reduced for any expenses the land owner

may have incurred as part of farm production cost

associated with the crop or farm product received for

land payment. The resulting net value of the farm crop

or farm product share is a net return to the land for

farm use production.

If a farm parcel is operated as part of a farm unit and

the farmland of the farm unit isn’t all under the same

ownership, the following gross income requirements

must be met [ORS 308A.071(2)(c)]:

Example: A farm unit is 100 acres, which includes a

20-acre parcel owned separately that is leased or rented.

To test the 20-acre parcel, ORS 308A.071(2)(c) requires a

two-part test.

Test 1: ORS 308A.071(2)(c) first requires the 20-acre parcel

to be tested under ORS 308A.071(2)(a). ORS 308A.071(2)

(a) provides instructions to test the parcel as part of a

farm unit. The farm unit of 100 acres is required to pro-

duce at least $3,000 gross farm income in three of the

five preceding calendar years.

Test 2: ORS 308A.071(2)(c) states that, “in addition,”

the gross income from farm use of the 20-acre parcel

owned separately must be at least one of the following:

a. One-half of the gross income requirement for ORS

308A.071(1)(a):

20 acres x $100 ÷ 2 = $1,000

This is satisfied by the 100-acre farm operator being

able to demonstrate that he or she produces at least

$1,000 gross farm income from farming the 20 acres

being tested.

No farm income for the remainder of the 100 acre

farm unit can be used to qualify the 20-acre parcel

for test 2.

b. One quarter of the gross income requirement for

ORS 308A.071(1)(a) in cash or net crop share rent. 20

acres x $100 ÷ 4 = $500.

This is satisfied by the 100-acre farm operator pay-

ing the landowner of the 20-acre parcel $500 in cash

rent for the calendar year being tested. Or it may be

satisfied by the owner of the 20-acre parcel receiv-

ing a portion of the farm income produced on the

20 acres, which is commonly called a crop share.

The crop share payment is from the land owner’s

2-9 150-303-422 (Rev. 11-07-22)

share of the sale of crops or cattle, or any other

qualifying farm use income produced on the 20

acres being tested. Any farming expenses incurred

by the 20-acre landowner must be deducted to

arrive at a net income of $500 attributable to the 20

acres under production.

See OAR 150-308-1050 for additional examples of

income requirements.

Income from consumed products—

ORS 308A.071 and OAR 150-308-1050

1. The value of products consumed by the owner

personally or in the farm operation shall consti-

tute no more than 49 percent of the required gross

income. The farm value of any crop or livestock

(less cost of livestock) used by the owner or in the

farming operation is the amount of money the crop

or livestock would have sold for in normal market-

ing conditions. [ORS 308A.071(7)(b)]

2. In determining gross income from livestock, the

purchase cost must be deducted from the gross

sales price.

3. The burden of proving “farm income” under ORS

308A.071 is upon the owner or person claiming

special assessment. Failure to provide income

information may result in disqualification under

ORS 308A.116.

Non-EFU applications

“Non-EFU wasteland” application

requirements (ORS 308A.074)

Wasteland, dry or covered with water, lying in or adja-

cent to and in common ownership with farmland shall

be specially assessed at “farm use” value under ORS

308A.068, if the farmland was operated as part of a

farm unit that produced over one half of the adjusted

gross income of the owner or owners, in the year prior

to the year an application is filed under ORS 308A.074.

If both husband and wife are common owners of the

farmland, their total personal income must be consid-

ered. A new application must be filed by April 15

each year that such assessment is desired.

[EFU wasteland doesn’t require an application, see ORS

308A.056(3) for EFU wasteland.]

“Non-EFU farmland” application

requirements (ORS 308A.077)

ORS 308A.077 requires that any owner of farmland

seeking to qualify for non-EFU farm use special assess-

ment under ORS 308A.068 must make application to the

assessor on or before April 1 preceding the first year in

which such assessment is desired.

The application shall be on forms the Department of

Revenue prepares and the assessor supplies.

One of the following may sign the application:

a. The owner in fee simple or for life.

b. Any one of tenants in common or tenants by the

entirety in fee simple or for life.

c. Any person of legal age, authorized in writing

to sign an application on behalf of any person

described in “a” or “b.”

d. The guardian or conservator of an owner, or the

executor or administrator of an owner’s estate.

e. The purchaser of the fee simple or life estate of an

owner under a contract of sale.

“Acquired non-EFU farmland as part of a

farming unit” application requirements (ORS

308A.080)

ORS 308A.080 applies to the acquisition of non-EFU

farmland by farm units having any combination of

EFU or non-EFU land.

Upon application under ORS 308A.077, acquired non-

EFU land shall be valued at farm use values if all of the

following criteria are met:

1. Acquired land is put into farm use immediately

upon acquisition. The newly acquired land must

be put to a qualifying farm use in a timely manner

consistent with accepted farming practices.

Example: For cropland or any other farm practices

that are seasonal, if the land is acquired after the

season has begun and there isn’t a growing crop, it

is recommended to require immediate farm use in

the next available season.

2. Acquired land is operated as part of the total

farming unit with the original land. The original

land doesn’t have to be contiguous with the non-

EFU land being acquired. (See OAR 150-308-1010

for definition of a “farm unit.”)

3. Acquired land owner must file an application on

or before April 1 preceding the first year special

farm use assessment is desired. This can be any

number of years beyond the date of acquisition,

provided the land was immediately put into farm

use upon acquisition. The first year the acquired

property may be eligible for special assessment is

the calendar year following acquisition. Any land

acquired January 1 or later must wait until April 1

of the next calendar year. (See OAR 150-308-1070)

2-10 150-303-422 (Rev. 11-07-22)

4. The purchaser of the acquired land owns the origi-

nal land.

5. Original land is in farm use.

6. Original land is specially assessed as EFU or non-

EFU under ORS 308A.107.

7. Original land produced gross income of at least

$10,000 in the calendar year prior to acquisition.

Non-EFU land acquired under ORS 308A.080 that qual-

ifies for farm use special assessment shall be added

to and treated as part of the entire farming unit upon

acquisition for purposes of meeting the gross income

requirements of ORS 308A.071.

Reviewing non-EFU applications

Reviewing applications for non-EFU farmland requires

a careful review of the application to determine which

tax year the land first qualifies. Upon review of the

history of the account the land may qualify in the cur-

rent tax year or portions of the application may have to

wait until the land can meet minimum farm use and/

or income requirements. If the land is involved in a

change of special assessment under ORS 308A.706(1)(d)

roll over provisions the land will qualify immediately

and the owner will have five years to meet minimum

farm use and income requirements as specified in ORS

308A.724.

The following discussion provides information to

determine qualification criteria under varying circum-

stances. (See also “Requalification” in this section of

the manual.)

New applications: New applications must meet both

the “farm use” requirements of ORS 308A.068(1) and

the “farm income” requirements of ORS 308A.071 as

follows:

“Farm use” requirements: ORS 308A.068(1) requires

new applications of land to demonstrate current farm

use at the time of application, and farm use for the

immediate two years preceding the year of application

for each acre under application.

“Farm income” requirements: ORS 308A.071 speci-

fies at the time of application the farm unit must meet

minimum farm use income requirements for three of

the five immediate preceding non-flood, non-drought

years, and farmer and non-farmer illness years. This is

commonly called the “farm income test.”

(See ORS 308A.071 in this section for more information).

Non-EFU land under a new application takes at least

two years if the land use is part of a farm unit within

the past five non-flood, non-drought, farmer and non

farmer illness calendar years and will likely require

three years if the land isn’t part of an existing farm unit.

Example of two years to qualify: Sometimes land may have

been disqualified from farm use within the preceding

five years. At the time of application if the owner can

prove qualifying income history within the preceding

five years, it is possible to meet the three of five year

income test and have an application approved with just

the preceding two years “farm use” requirement of

ORS 308A.068(1).

Example of three years or more to qualify: Non-EFU land

that hasn’t been farmed in the past five years or more

will need to be farmed at least three years before it can

meet the three of five year “farm income” test. The

“farm use” requirement for current use and two pre-

ceding years of “farm use” as specified in ORS 308A.068

will also need to be met at the time the application is

submitted.

Each acre of land under application is reviewed for

farm use. Farm use activities may change from year to

year so the acres in use on an application may need to

be qualified separately.

Acres requiring a separate application: Sometimes, an

owner may already have a portion of his or her land in

non-EFU special assessment and subsequently decides

to clear additional land that hasn’t been recently

farmed. The cleared land will require a separate appli-

cation and because this land hasn’t been farmed in the

past five years, it will take at least three years to meet

both the “farm use” and “farm income” requirements.

When reviewing a new application, it may be discov-

ered that not all of the acres under the application have

been used for “farm use” for at least the two preced-

ing years. The acres that can meet both “farm use” and

“farm income” will qualify. Those acres that don’t meet

either the “farm use” or “farm income” requirements

will require a separate application at a future date

when both the “farm use” and “farm income” require-

ments can be satisfied.

Example: An owner acquires land that hasn’t been

farmed for several years and begins developing the

land into a vineyard in phases of 5 acres each year.

After three years the owner submits an application

with no farm use in prior years four and five. As speci-

fied in ORS 308A.056(3), all acres planted into vineyard

will qualify as immature perennials three years after

being planted. Immature perennials don’t have to meet

income requirements as specified in ORS 308A.071(2)

(b).

The 5 acres that are three years old will qualify. The

5 acres that are two years old will qualify by separate

application next year. The 5 acres that are one year old

will qualify by separate application in two years. Any

land that is planted in the current year will need to

qualify by separate application in three years. Any land

that hasn’t been planted in the current year will require

2-11 150-303-422 (Rev. 11-07-22)

a minimum of three years following the year of plant-

ing. This is a good illustration why each acre needs to

be reviewed separately for qualification.

Land uses may involve several different types of farm

activities and some acres may have breaks in farm use

or may have been used within the prior five years at the

time of application. The important thing to remember

is that each acre must be in a qualifying farm use under

ORS 308A.056(1) or (3) for the two preceding years as

required by ORS 308A.068(1) and must also meet the

income requirements of ORS 308A.071. Any acres not

qualifying may qualify by separate application when

they can meet both the “farm use” and “farm income”

requirements.

Note: These application requirements are for landown-

ers who are submitting a timely April 1 application

under ORS 308A.068, 308A.071 and 308A.077. If land has

been disqualified from a different special assessment

and is changing to non-EFU special assessment under

ORS 308A.706(1)(d) and ORS 308A.724(2) the qualifica-

tion requirements for “farm use” and “farm income”

are the same, but the owner has five years to meet

them. (See ORS 308A.718 “Disqualification, notification

procedures” in the addenda of this manual for addi-

tional information on change in special assessments.)

(See “Non-EFU income requirements” of this section

for information when reviewing applications for com-

pliance with ORS 308A.071 income requirements.)

Change in special assessment under ORS 308A.706(1)

(d): Following a disqualification, an owner may elect

a “change in special assessment” and immediately

qualify under ORS 308A.706(1)(d) to non-EFU farm use

special assessment and will have up to five years to

meet both the “farm use” and “farm income” require-

ments” as specified in ORS 308A.724.

Note: See ORS 308A.724 for application timelines for

a change in special assessment following a disquali-

fication. See also “Disqualification notification proce-

dures” in the appendix for additional information on

change in special assessments.

Acquired land under ORS 308A.080: Newly acquired

non-EFU land can qualify for farm use special assess-

ment if an application is submitted by April 1 of any

assessment year following acquisition. (See OAR 150-

308-1070.) The land under application must be imme-

diately put into “farm use” following acquisition, but

doesn’t have to meet “farm income” requirements.

The minimum $10,000 gross income requirement for

the existing farm unit will be used to meet the “farm

income” requirement.

(See ORS 308A.080 in this section for additional

information.)

Non-EFU “gross income

questionnaires”

The income requirements of ORS 308A.071 is required

as part of the application for non-EFU special assess-

ment. In years following the year of application, the

assessor is responsible to send “gross income question-

naires” to assure the non-EFU land under application

continues to meet the “farm income” requirements of

ORS 308A.071 meeting the same criteria as a new appli-

cation. (ORS 308A.071(4) and (5), OAR 150-308-1050,

150-308-1070.)

The income questionnaire can also be used to verify

the land continues in a qualifying “farm use”.

After initial application, continued “farm use” is

required each year. However, because disqualifications

are required to be timely, you may only use the current

year or the entire prior calendar year to disqualify land

no longer in farm use.

If the income questionnaire demonstrates any acres

weren’t in a qualifying “farm use” in prior years two

through five, you can’t disqualify for those years, but

this may alert you to verify in future years that the land

maintains a qualifying “farm use.”

If you discover land is no longer in farm use for the cur-

rent year, it is recommended you notify the owner that

he or she is in danger of losing the special assessment.

If the owner continues to no longer use the land for the

remainder of the current year, any portions of the land

no longer in farm use should be timely disqualified in

the next assessment year.

(See “Non-EFU income requirements” of this section

for information when reviewing gross income ques-

tionnaires for compliance with ORS 308A.071 income

requirements.)

Requalification

Requalification generally [ORS 308A.086(1)

and (2)]

ORS 308A.086 allows EFU or non-EFU land that was

previously in farm use special assessment to requalify

provided the land can meet the EFU farm use require-

ments of ORS 308A.062, or in the case of non-EFU, meet

application requirements the same as any other land

qualifying for non-EFU special assessment under ORS

308A.068.

Special requirements for requalification of

EFU and non-EFU land. [ORS 308A.086(3)]

• ORS 308A.086(3)(a) relating to non-farm dwellings

in an EFU zone: Any EFU land that is subject to non-

farm dwelling restrictions of ORS 215.236 shall not

2-12 150-303-422 (Rev. 11-07-22)

requalify for farm use special assessment until the

land is either no longer in an EFU zone or until the

land owner combines the land with a contiguous par-

cel which satisfies ORS 215.236(5). (See “Disqualifica-

tion” section of this manual.)

• ORS 308A.086(3)(a) and (b) relating to compat-

ible non use: Any EFU or non-EFU land previously

disqualified that is lying idle or isn’t being used for

industrial, commercial, residential, or other use that

is incompatible with a purpose to return the land to

farm use is protected from collection of additional

taxes under ORS 308A.706(1)(a). This land can requal-

ify as long as there hasn’t been a “change of use”. If

there has been a change in use such as residential,

commercial, industrial, or any other use incompatible

with returning the land to farm use, then the protec-

tion under ORS 308A.706(1)(a) no longer applies and

the account should be processed following the statu-

tory instructions of ORS 308A.712(2). (See “Disquali-

fication” section of this manual).

• ORS 308A.086(3)(b) relating to requalification of

non-EFU land under ORS 308A.089: If non-EFU

land has been disqualified in the current year under

ORS 308A.116(1)(c) for not meeting income require-

ments, it may requalify during the first year of dis-

qualification under ORS 308A.089. If the land doesn’t

requalify for non-EFU special assessment during the

first year of disqualification, then it may requalify for

non-EFU special assessment in a future assessment

and tax year as specified in ORS 308A.086(1) and (2).

(See “Disqualification” section of this manual.)

• ORS 308A.086(3)(b) relating to subdivisions on

non-EFU land: When a subdivision plat is recorded

on non-EFU land, the land is required to be disquali-

fied under ORS 308A.116(1)(d). The land may requal-

ify by meeting the requirements of ORS 308A.116(4).

A new application under ORS 308A.724(3) is required

to be submitted no later than 30 days following the

disqualification. It is recommended to assist the tax-

payers to make the timeliest requalification.

• ORS 308A.086(3)(b) relating to abatement for fail-

ure to meet non-EFU income requirements: Non-

EFU land that has been disqualified under ORS

308A.116(1)(c) for failure to meet the income require-

ments of ORS 308A.071 may abate additional taxes

provided the land is assessed based on market value

and remains in limited farm use. For each year the

land remains disqualified, but continues limited

farm use practices, the oldest year of additional taxes

will be abated. If during the abatement period, the

land once again can meet the non-EFU qualification

requirements of ORS 308A.068 like any other land

being qualified, the land may requalify as specified

under ORS 308A.122. (See “Disqualification” section

of this manual.)

• ORS 308A.086(3)(c) relating to change in special

assessment of EFU or non-EFU land: Following a

disqualification from EFU or non-EFU special assess-

ment, or any other special assessment identified

under ORS 308A.706(1)(d), the land owner may have

an option to change to a different special assessment.

This is a form of requalification into a different spe-

cial assessment. (See “Disqualification” section of

this manual for timing and other information.)

Note: Some disqualifications don’t allow a change in

special assessment under ORS 308A.706(1)(d). (See

“Disqualification” section of this manual.)

Exempt farm property

Exempt agricultural products and equipment ORS

307.315, 307.320, 307.325 and 307.390 through 307.398

and OAR 150-307-0460.

Farm agricultural products, trees, shrub, plants, crops,

fish, poultry, bi-valve mollusks (oysters), livestock, fir

bearing animals, bees and vermiculture (worms) sup-

plies and products defined in ORS 307.315 to 307.325 are

exempt.

Farm machinery and equipment as defined in ORS

307.390 to 307.398 are exempt from property taxation:

• Farm machinery and equipment used primarily:

— In the preparation of land, planting, raising,

cultivating, irrigating, harvesting or placing in

storage of farm crops.

Per (OAR 150-307-0460) machinery and equip-

ment used to place a farm crop in storage are

exempt from taxation. However, once process-

ing of the crop is begun, it is no longer a crop,

but a product.

Example: Apples are picked and go directly into

cold storage. This would be considered “plac-

ing in storage of farm crops.” When these same

apples are sorted, washed or boxed it becomes

a product and placing it back into cold storage

until sold isn’t considered “placing in storage of

a farm crop.” At this point apples change from a

crop to a product.

When the same machinery and equipment are

used for both placing in storage a farm crop and

processing a farm product, the primary use is

what determines its assessment status.

Example: (OAR 150-307-0460) An unlicensed

farm vehicle is used 45 percent of the time to

move cleaned, sorted, washed, and bagged car-

rots ready for market (product); 30 percent of the

time to move freshly-picked carrots from the

field to the warehouse or cold storage facility;

2-13 150-303-422 (Rev. 11-07-22)

and sits idle 25 percent of the time. The vehicle

is used primarily in a non-exempt status and is

fully assessable, even though that use isn’t 50

percent or more of the time available.

— For the purpose of feeding, breeding, manage-

ment or sale of or the produce of, livestock, poul-

try, fur-bearing animals or bees or for dairying

and the sale of dairy products.

— In any other agricultural or horticultural use or

animal husbandry or any combination thereof.

• Tools, machinery, and equipment, owned by or in the

possession or under the control of the taxpayer that

are used by the taxpayer predominantly in the con-

struction, reconstruction, maintenance, repair, sup-

port or operation of the farm machinery, equipment,

and other real and personal farm improvements.

• Center pivots, wheel lines, and movable set lines.

• Frost control systems.

• Trellises used for hops, beans, or fruit.

• Hop harvesting equipment.

• Oyster racks, trays, stakes, and other in-water struc-

tures used to raise bivalve mollusks.

• Equipment used for the fresh shell egg industry that

is directly related and reasonably necessary to pro-

duce, prepare, package, and ship fresh shell eggs

from the place of origin.

• Radio communications equipment, meteorologi-

cal equipment, and other personal property used in

connection with the operation of the field burning

smoke management program established under ORS

468A.555 to 468A.620 and 468A.992.

Exempt government farmland ORS 307.060

and 307.110

Per ORS 307.060, leased real property of the United

States held or occupied primarily for agricultural pur-

poses under the authority of a federal wildlife conserva-

tion agency or held or occupied primarily for purposes

of grazing livestock is exempt.

Per ORS 307.110(3)(b), real or personal property of this

state or any institution or department thereof or of any

county or city, town or other municipal corporation, or

political subdivision of this state leased to or rented by

persons, other than sub-leases or sub-renters, for agri-

cultural or grazing purposes and for other than a cash

rental or a percentage of the crop is exempt. If the gov-

ernment agency charges a cash rent or receives a percent-

age of the crop then the land is assessable. If the use of

the land meets farm use qualifications of ORS 308A.056,

the land should be assessed at farm use values.

Homesites ORS 308A.253

It is important to make a distinction between qualified

homesites and homesites that don’t qualify for home-

site special assessment. Homesites that dont qualify for

farm homesite special assessment are assessed based

on market value the same as other rural lands as speci-

fied in OAR 150-308-0240.

“Homesite” means land under the dwelling and all

tangible improvements to the land under and adjacent

to a dwelling and other structures that are customarily

provided in conjunction with a dwelling. As specified

in OAR 150-308-1120, “homesite” includes site devel-

opments as defined in OAR 150-307-0010 and ameni-

ties associated with the raw, undeveloped land such as

topography that affords the site a particular view, river

frontage, property access, and utility access.

A homesite may consist of more or less than 1 acre in

size. The specially assessed value of the homesite is

the real market value of 1 acre of land regardless of the

qualifying size of the homesite area. (See “Valuation”

section.) ORS 308A.256(4)

EFU homesites used in conjunction with a farm opera-

tion don’t require an application to qualify for special

assessment under ORS 308A.253 and 308A.256.

Non–EFU homesites used in conjunction with a farm

operation may qualify by annual application. To qual-

ify the owner in the year prior to application must

obtain over one-half of their personal adjusted gross

income from farming as specified in ORS 308A.253. If

both husband and wife are owners of the land under

the dwelling their total personal income must be con-

sidered. Due to the strict personal income requirements

not many non-EFU homesites qualify for homesite

special assessment. Once qualified, the homesite will

be specially assessed the same as any other qualified

homesite under ORS 308A.250 to 308A.259. To continue

non-EFU homesite qualification the owner will need to

file a new application by April 15 each year homesite

special assessment is desired.

Qualified homesites may be occupied by the farmer or

anyone actively working the farm operation. Certain

retired farmers may receive homesite special assess-

ment provided they continue to meet the criteria under

ORS 308A.253. Homesites that are vacant (including

retired farmer homesites) continue to qualify as long

as they are not rented or leased out for non-farm pur-

poses. ORS 308A.259

Farm labor camps are not homesites. Any qualify-

ing farm labor camp should be processed under ORS

307.480 to 307.510.

Picker cabins and other temporary farm worker shel-

ters that don’t qualify as farm labor camps or farm

homesites may be considered farm related buildings

2-14 150-303-422 (Rev. 11-07-22)

as long as they are not rented or leased for non-farm

purposes. The land under these facilities should be spe-

cially assessed under ORS 308A.107 according to their

farm use productivity classification the same as any

other farm related building.

Potential additional tax notation (ORS

308A.083)

Once qualified the notation “potential additional tax

liability” shall be entered on the assessment and tax

roll. The notation will remain on the roll until the tax

has been either cancelled or paid.

Sometimes the notation will remain even if the land

is no longer qualified. See “Disqualification” and

“Additional tax” sections for removal of the notation.

Appeals—Magistrate Division

An applicant may appeal an application that has been

wholly or partially denied because the property failed

to qualify for special assessment to the Magistrate

Division of the Oregon Tax Court. A complaint filed

with the Magistrate Division requires a filing fee. The

appeal must be filed within 90 days of the knowledge

of the denial, but not later than one year after the act.

More information can be found in ORS 305.275, 305.280,

305.404 to 305.560, and 308A.718.

Complaints to the Magistrate Division should be mailed

or delivered to the following addresses.

By mail:

Oregon Tax Court

Magistrate Division

1163 State Street

Salem OR 97301

In person:

Clerk, Oregon Tax Court

Magistrate Division

1241 State Street NE

Salem OR 97301

Decisions of the Magistrate Division may be appealed

to the Regular Division of the Oregon Tax Court within

60 days after the date of the decision with an additional

filing fee.

Appeals—Oregon Department of

Revenue

When the county has denied an application due to late

filing, the taxpayer may apply to the Department of

Revenue for relief under ORS 307.475, the hardship stat-

ute. Petitions filed under the hardship statute may be

filed through December 15 of the year in which the fail-

ure to apply timely for the special assessment occurred.

Petitions to the department should be mailed to:

Property Tax Division/Conference Unit

Oregon Department of Revenue

955 Center Street NE

Salem OR 97301-2555

If the department determines that the taxpayer had

good and sufficient cause for not filing a timely applica-

tion with the assessor, the department may send a writ-

ten recommendation to the assessor to approve special

assessment for any land that would qualify under the

application.

If the department fails to find cause to issue a recom-

mendation to the assessor, the petitioner may appeal

the department’s order to the Magistrate Division

within 90 days. The magistrate will review the case and

determine whether the department abused its discre-

tion when it declined to recommend the assessor accept

the application.

3-1 150-303-422 (Rev. 11-07-22)

Introduction

Before 1963, assessments of Oregon farm properties

were based on market data information that didn't

represent the sale of comparable property for compa-

rable uses. ORS 308.345 (now under ORS 308A.092) was

enacted to provide for the valuation of certain agricul-

tural land to reflect value for farm use only.

The special assessment provided by ORS 308A.092 per-

tains to two categories of land:

1. Farm land located in an exclusive farm use zone.

(EFU)

2. Farm land located outside an exclusive farm-use

zone, which is specially assessed because the own-

er’s application for special assessment is approved.

(Non-EFU)

Both categories of farmland must be primarily devoted

to farm use as provided by ORS 308A.056 (farm use) to

qualify for the special assessment.

If a farm isn't within an exclusive farm use zone and

the owner doesn't file an application for farm use

assessment or qualify for another special assessment or

exemption program, the appraisal, for assessment pur-

poses, must be based on market value for highest and

best use as provided by ORS 308.205 and 308.146.

Farm use mass appraisal procedures

The basic procedure followed in the mass appraisal of

properties that qualify for farm use special assessment

is:

• Classify land and establish value zones under ORS

308A.107;

• Use an income approach under ORS 308A.092 to

establish typical net incomes per acre for each land

classification in each value zone;

• Capitalize farm use net income for each tax code area

(ORS 308A.092);

• Complete valuation land card; and

• Assess each acre (or portion) of land using appropri-

ate land classification tables and assessment valua-

tion requirements of ORS 308A.107.

Any portions of a farm such as non-qualifying home-

sites, non-qualifying wasteland, non-qualifying farm

land, real property improvements, buildings, fixtures

(except property described in ORS 307.390 to 307.398),

or taxable property that doesn't qualify for farm use

special assessment valuation under ORS 308A.107 or

Valuation

homesite valuation ORS 308A.256 will be appraised

for its highest and best use based on real market value

in accordance with ORS 308.205 and 308.146 unless it

qualifies for exemption or other special assessment

such as forest land, historic property, open space, ripar-

ian land, etc.

Land classification

The appraiser in the field classifies land by using aerial

photographs. Classification lines are drawn directly on

the photo as illustrated in the soil classification map

example. Much of the land capabilities and usage can

be identified by examination of the aerial photographs.

Obvious physical features such as cultivated land, rock

outcroppings, and wet spots can be identified on the

photograph. However, a field inspection is necessary to

determine things such as soil depth and texture, and to

check the indications on the photo for any changes that

may have occurred since the photo was taken, such as

clearing, leveling, or irrigation. (See addenda for “Land

classifications” and see “Accepted farming practice” in

the “Qualification” chapter of this manual.)

Value zones

Land values are established on a per acre basis for each

class of land. It is often necessary to divide the county

into value areas or zones. Geological or economic con-

ditions might change the value for the same class of

soil in different areas. Variables such as rainfall, frost

zones, and distance to market centers can result in dif-

ferent values for the same class of land. These value dif-

ferences can be assessed using value zones.

Land classification and appraisal

records

The land classification systems that most counties use

recognize the productivity concept of value inherent

in the income approach required by ORS 308A.092. To

use the land classes, the assessor must develop the net

income to be capitalized for each of the land classes.

Once this has been done, the assessor can proceed to

capitalize the net incomes to obtain the farm use values

of the various land classes. An appraisal land card must

be completed by extending the farm use value of each

land class against the number of acres of the class in

the tax lot. This procedure is the same as that followed

in completing market value farm land appraisal cards.

The homesite value, and any other land not qualifying

for farm use assessment, even though it is appraised

3-2 150-303-422 (Rev. 11-07-22)

based on market value, should be carried on the farm

use appraisal card.

Note that the computation of the farm use value does

not in itself meet the requirements of ORS 308.234

(when the property was last appraised). To be consid-

ered as a current appraisal, the property must be visu-

ally inspected at the site to reflect any changes that have

occurred since the last physical appraisal. In addition to

changes in the specially assessed portions of the prop-

erty, a current market value appraisal must be made.

The current farm use record shall show the date the last

physical appraisal of the property was made and the

appraiser making the appraisal.

The assessor shall keep all data and the computations

used in developing farm use values based on land class.

This is done annually for each assessment roll.

A soil map identifies land productivity and classifica-

tion. The soil map should identify the basic land class

and number of acres in each land class for each tax lot

or parcel. The land class acreage is then recorded onto

the “specially assessed land appraisal” card. The fol-

lowing is an example of a soil map.

3-3 150-303-422 (Rev. 11-07-22)

Farm board of review

ORS 308A.095 provides for an optional county board of

review that is advisory in nature and is restricted to the

review of the income and expense factors the assessor

uses to appraise farm-use land.

The appraisal process can be lengthy and the board has

a limited time to do its work. Therefore, the assessor is

urged to provide the board with all information to be

reviewed in a timely manner. Information submitted to

the board should include all data considered in arriv-

ing at typical incomes and expenses.

By statute (ORS 308A.095), each county board has five

members. Two members represent county business, are

appointed by the county court, and serve two years.

The county assessor appoints two members and they

serve two years. One member is appointed by the four

members appointed to the board and serves one year.

All members must be knowledgeable and experienced

in agricultural land values.

The board of review is subject to the “public meet-

ings laws” of ORS 192.610 to 192.690 and legal notice

requirements of ORS Chapter 193. Therefore, meetings

are open to the general public and a notice of time and

place of the meetings must be given. Written minutes

of all meetings must be kept and made available to the

public.

Income approach to farm use

land value

Each year the assessor shall determine farm use values

by using the “income approach” in ORS 308A.092 and

30 8A .107.

The application of this statutory income approach

requires the development of two basic components:

• Net income per acre (before local property taxes); and

• Capitalization rate (which includes a component for

local property taxes).

The net income per acre is divided by the capitalization

rate to arrive at a specially assessed value (SAV) per acre

for land qualifying for farm use special assessment.

The calculated SAV per acre for each class and area is

then recorded into tables. Each SAV table has a corre-

sponding maximum specially assessed value (MSAV)

table.

Each year the MSAV table from the prior year for each

class and area is adjusted in compliance with ORS

308A.107 and carried forward to create a corresponding

MSAV table for the SAV tables created from the current

year farm income study. The assessed value (AV) for each

land class in a tax account is then determined per acre by

selecting the lesser of the SAV table or the MSAV table.

(See also “Maximum specially assessed value (MSAV) for

farmland” of this section of the manual.)

Net income per acre (before local

property tax)

The assessor has the responsibility to determine, by

land class, the net income of farmland to be capitalized

into a farm use value. To develop a net income the fol-

lowing farm income methods can be utilized:

• Cash rent.

• Crop share.

• Owner operator.

Note: For examples and an explanation of each of these

methods, see “Farm use income approach examples” of

this section of the manual.

Property tax expense isn't deducted from the gross

income, because the legislated capitalization rate

includes an allowance for property taxes.

Capitalization rate (includes a

component for local property taxes)

The capitalization rate shall be the effective rate of interest

the Federal Farm Credit Bank System charges at the time

of closing on loans for farm properties. This is estimated

as an average over the immediate past five years, plus a

component for the local tax code rate. The Oregon Depart-

ment of Revenue will annually determine and certify to

the county assessors the interest rate to be used. It shall be

the responsibility of the assessor in each county to deter-

mine the tax rate for each tax code area in which farm

use property is located. The appraiser adds this tax rate

to the interest rate certified by the Oregon Department of

Revenue to arrive at the capitalization rate to be used. (See

addenda for example of the DOR interest rate certification

letter).

Example of farm use calculation:

Interest rate Tax rate Cap. rate

(7.11% + 1.62% = 8.73%)

Typical rent/AC = $50.00

Typical expenses/AC = – 2.50

Typical net income/AC = $47.50 (before property tax)

Typical net income/AC

= Farm use SAV per acre

Capitalization rate

$ 4 7. 5 0/AC

= $544 Farm use SAV per acre

8.73%

3-4 150-303-422 (Rev. 11-07-22)

Farm use income approach examples

This section provides examples of how income data can

be used to estimate farm use value for land. The custom

in the area and the availability of data will determine

which method (cash rent, crop share, or owner opera-

tor) is best. The yields, prices, and other data used in

the following examples illustrate the income technique

and development of farm use value based on the asses-

sor’s land classification.

General farm area

The typical rental agreement in the general farm area is

a cash rent lease. Cash rents should be used to analyze

land income in these areas. However, if you are unable

to obtain sufficient cash rental data, it may be necessary

to employ the crop share method.

Rent levels will vary depending on whether the land

is irrigated or dry. In some instances, rent includes an

amount for the irrigation system as well as for the land

involved. In such cases, the gross rent must be reduced

by the rent for the irrigation equipment to determine

the amount of rent attributable to the land.

The following are examples of how to calculate and

make the reduction to gross rents for irrigation equip-

ment and other landlord expenses.

Assessor’s class I irrigated land

(landlord irrigation)

Valuation of class I irrigated land with landlord fur-

nishing the irrigation equipment.

Basic data:

1. The irrigation development consists of a drilled

well, electric motor and pump, electrical services,

buried mainlines, and hand move laterals. The well

is part of the land and its value will be included

with the farm use value. The motor, pump, and

buried mainlines are real property improvements

and will be assessed based on real market value on

an improvement appraisal card. The hand move

laterals are personal property and are exempt from

taxation pursuant to ORS 307.398.

2. The land and irrigation equipment are rented for

a cash amount per acre with the landlord respon-

sible for major repairs on the motor and pump. In

addition, the landlord expenses are property taxes,

liability insurance, and management of the invest-

ment (tenant manages the operations on the land).

The tenant is responsible for all other maintenance

and the electric power costs.

3. An amount needs to be deducted from the land-

lord’s gross income to satisfy the requirement of the

investment in the irrigation equipment in addition

to the above landlord costs. The amount deducted

shall consider the return on the investment, return

of the investment (depreciation), and an amount for

property taxes on the equipment. The interest rate

for the return on the investment will be the mar-

ket rate on which the investment is made. Assume

for the following example that the net income for

the investment (land and equipment) is based on

the same rents used for the farm use computation

and recent sales reflects a 2.9 percent rate of return.

In the example the irrigation equipment assessed

as real property improvements (pump, motor, and

underground mainline) has a remaining life of 15

years, and the personal property (sprinkler later-

als) has a remaining life of 10 years. The tax rate for

the code area in which the property is located was

1.62 percent for the past tax year.

4. Rent is for bare land; therefore, no deduction is

required for ORS 307.320 (deciduous trees, etc.).

Valuation:

Landlord gross income per acre $110.00

Landlord expenses

Management at 3% $3.30

Insurance—liability 1.00

Major repairs 3.00

Irrigation equipment

Real, $150 per acre @ 11.19%* $16.79

Irrigation equipment

PP, $35 per acre @ 12.9%** + 4.52

Total expenses 28.61

Landlord net income to land $81.39

Interest rate 7.11% Certified by DOR

Tax rate + 1.62% Estimated rate for the

district in which the

property is located

Capitalization rate 8.73%

$81.39 ÷ 8.73% = $ 932 Farm use SAV per acre for

assessor’s class I irrigated land

* Interest 2.9% + Depreciation 6.67% + Taxes 1.62% = 11.19%

** Interest 2.9% + Depreciation 10.0% = 12.9%

Note: For an explanation of interest, see “Developing

rate of return.” pg 3-10

Assessor’s class I row crop land (crop rotation)

Basic data:

1. Assessor’s class I irrigated land rents for different

amounts, depending on the crops raised. The crops

grown are fitted to a rotating pattern. Two years of

potatoes are followed by two years of grain and then

five years of alfalfa. After alfalfa, the land is put back

3-5 150-303-422 (Rev. 11-07-22)

in potatoes. In determining the typical rent, consid-

eration must be given to the crops grown. The rents

to be used are those received by owners for the vari-

ous uses in the prior year. An example is:

2 years rented for potatoes at $210 per acre $420

2 years rented for grain at $80 per acre 160

5 years rented for alfalfa hay at $100 per acre + 500

9 years $1,080

$1,080 ÷ 9 years = $120 per year typical rent.

2. The land is irrigated with the tenant responsible for

upkeep and cleaning of the ditches. If irrigation equip-

ment is included, an extra amount is charged per acre.

3. The landlord is responsible for furnishing the alfalfa

seed when the stand is established. The landlord’s

alfalfa stand costs and allowance per year is:

Cost of seed $35.00

Establishment

risk* + 3.50

$38.50 ÷ 9 years = $4.27 per year

*One out of 10 seedings will fail resulting in the

additional cost of $35 for seed. The tenant is still

responsible for the cash rent and will normally

plant a grain crop in the year of the seeding failure.

Seed $35.00 ÷ 10 = $3.50

4. The landlord’s other typical expenses include

property taxes, liability insurance, management,

and water charge. The expense for water is the

operation and maintenance charge (O&M). Any

payments for debt retirement and interest of the

irrigation district are not deductible.

Valuation:

Landlord gross income per acre $120.00

Landlord expenses

Management at 3% $3.60

Insurance—liability 1.00

Water (O&M) 29.35

Power cost 10.40

Alfalfa stand + 4.27

Total landlord expenses 48.62

Landlord net income to land

before property taxes $71.38

Interest rate 7.11% Certified by DOR

Tax rate +1.62% Estimated rate for the

district in which the

property is located

Capitalization rate 8.73%

$71.38 ÷ 8.73% = $817.64

Farm use SAV per acre for

assessor’s class I row crop land

Center pivot irrigated lands (crop rotation)

Basic data:

The preferred method of determining farm use value

for pivot irrigation systems uses current rents of devel-

oped pivot irrigation land. The rents usually reflect

irrigated farm land being rented with an expectation of

making a profit from raising cash crops.

Circle pivot irrigated lands rent for different amounts

depending on the crops raised, soil productivity, and

whether buildings and structures are included in the

lease. The example shown is for a five year bare land

lease. Pumping power costs or water charges will vary

depending on the type of water source, the distance

from the water source, and the depth of wells.

Example: The landlord has developed the pivot irriga-

tion system, 135 acres are irrigated, and potatoes are

the main cash crop in this five year rotation:

5-year lease with crop rotation

(potatoes are main cash crop)

1 year potatoes gross rent per acre $375.00

3 year alfalfa gross rent per acre (135 x 3) 405.00

1 year corn gross rent per acre +135.00

$915.00

$915.00 ÷ 5 years = $183.00 average gross rent

Valuation:

Landlord gross income per acre $183.00

Landlord expenses

Management at 5% $9.15 / acre

Insurance liability 2.00 / acre

Water (power/water cost) 60.00 / acre

System repairs 20.00 / acre

System charge* 13.43 / acre

Pivot charge +25.20 / acre

Total landlord expenses –129.78

Landlord net income to land $53.22

Interest rate 7.11% Certified by DOR

Tax rate + 1.62% Estimated rate for the

district in which the

property is located

Capitalization rate 8.73%

$53.22 ÷ 8.73% = $ 609 Farm use SAV per acre for row

crop circle pivot irrigated lands

*Assessed value of machinery and equipment: $16,200

3-6 150-303-422 (Rev. 11-07-22)

$16,200 ÷ 135 acres = $120.00 per acre

Return on investment 2.90%

Return of investment 6.67%

Tax rate +1.62%

11.19%

$120.00 x 11.19% = $13.43 per acre system charge

Machinery and equipment consists of property

improvements needed to support the operation of the

center pivot such as motor, pumps, pumping station,

pipe clusters, buried pipeline, and pivot pad.

**Market value of typically maintained center pivot:

$30,375

$30,375 ÷ 135 acres = $225.00 per acre

Return on investment 2.90%

Return of investment 8.30%

Tax rate +0.00% (exempt per ORS 307.398)

11.20%

$225.00 x 11.20% = $25.20 per acre pivot charge

Center pivot developed by lessee

An alternate method of determining farm use value

uses long term leases where the lessee installs the irri-

gation system. A disadvantage of this method is that it

is hard to know if the contract rent of a long term lease

is, in fact, current market rent.

Example 1: Existing farmland conversion

(Landlord pays property taxes)

A fairly flat dryland wheat field is a cash rent lease at

$45 per acre for 20 years with the tenant to install a cen-

ter pivot irrigation system including the water delivery

system to the field. The landlord pays taxes on the land

and the tenant pays the taxes on the improvements. The

landlord also pays liability insurance of $2.00 per acre.

The DOR interest rate is 7.11 percent and the tax rate is

1.62 percent.

Valuation:

Rent per acre $45.00

Insurance – 2.00

Net rent $43.00

Interest rate 7.11% Certified by DOR

Tax rate + 1.62% Estimated rate for the

district in which the

property is located

Capitalization rate 8.73%

$43.00 ÷ 8.73% = $492 Farm use SAV

Example 2: Develops sagebrush land

(Lessee pays taxes)

An uneven sagebrush patch is leased for 15 years at $40

per acre. The tenant clears and levels the land, pays all

taxes, and installs the irrigation system. The landlord

pays only liability insurance at $2.00 per acre. The DOR

interest rate is 7.11 percent, the rate of return from sales

of similar uneven sagebrush land is 2.9 percent, and the

estimated tax code rate is 1.62 percent.

The clearing, land leveling, and soil preparation costs

are $17.50 per acre. This is an additional cost to the ten-

ant and needs to be reflected in the rent paid.

Valuation:

Rent per acre $40.00

Insurance – 2.00

Net rent $38.00

Tenant land preparation adjustment* + 1.67

Net rent after preparation adjustment 39.67

Adjustment for tenant paying tax

(Cap. rate ÷ DOR int. rate)

8.73% ÷ 7.11% = 122.8% (portion of capitalization rate

attributed to property tax)

Adjusted net rent (122.8% x $39.67) = $48.71

$48.71 net rent ÷ cap. rate of 8.73% = $557 Farm use

value

Note: Dividing $39.67 in example 2 by the DOR rate of

7.11 percent achieves the same value. However, making

the adjustment to $48.71 allows this to be compared to

rents where the landlord pays the land taxes to deter-

mine a typical rent. Using this method also fulfills

ORS 308A.092, which says the capitalization rate must

include the local tax rate.

*Adjustment for tenant land preparation

Interest rate of return 2.90%

Recapture (1 ÷ 15) of irrigation system + 6.67%

Cap. for land preparation 9.57%

Clearing, leveling, and soil preparation: $17.50

Land preparation adjustment: $17.50 x 9.57% = $1.67

If the landlord pays all taxes, the tax per acre on the

improvements should be subtracted from the rent.

Check the leases carefully. As indicated in example 2,

a small thing like who pays the land taxes can make a

large difference in the net rent. Making no adjustment

for clearing, leveling, and soil preparation or tenant

paid taxes would have indicated a farm use SAV of only

$38.00 ÷ 8.73 = $435.

3-7 150-303-422 (Rev. 11-07-22)

Valuation of class III non-irrigated land

(Cash rent)

Basic data:

1. Cash rented for $50 per acre for bare land.

2. Landlord’s typical expenses include property

taxes, liability insurance, and management of the

investment.

Valuation:

Landlord gross income per acre $50.00

Landlord expenses

Management at 3% $1.50

Insurance liability +1.00

Total landlord expenses –2.50

Landlord net income to land

before property taxes $47.50

Interest rate 7.11% Certified by DOR

Tax rate + 1.62% Estimated rate for the

district in which the

property is located

Capitalization rate 8.73%

$47.50 ÷ 8.73% = $544 Farm use SAV per acre for

assessor's class III non-irrigated

land

Wheat farm area

The crop share rental is the usual rental agreement in

the wheat counties. For many years the typical crop

share allocation was one third to the landlord and two

thirds to the tenant. However, this allocation of the

crop has been changing in recent years as leases are

renewed to reflect changes in wheat prices, yields, cost

of farming, and government programs. Some, but not

necessarily all, of those variations are as follows:

1. Landlord receives one third of the crop; pays one

third of the fertilizer and weed spray material; and

pays all of the real property taxes.

2. Landlord receives one third of the crop; and the

tenant pays for all of the fertilizer, weed spray

material, and property taxes.

3. Landlord receives 40 percent of the crop and pays

only the property taxes.

Because of variations, it is important that the rental

data be obtained from the individual county as it is

essential that rents be based on typical landlord/tenant

agreements for the area involved.

The government farm programs change over time and

may affect prices received for wheat and the number of

acres that can be planted in wheat. Program controls

may vary from year to year and from county to county,

requiring that this data be obtained from the individ-

ual county United States Department of Agriculture

Natural Resources Conservation Service (NRCS) office.

The past government program allowed the planting

of wheat on a percentage of the total wheat base acres,

which was considered in determining the cropping

program. Under the 1965 and 1970 farm programs,

when a certain number of acres had to be set aside,

wheat growers were paid certificate payments for the

part of the crop that went for domestic consumption.

The certificate payment was added to the market price

the grower received for wheat to arrive at the total

wheat income. A later program did away with these

certificate payments and was replaced by a target price

for wheat. As long as the market price of wheat (five

month average, July through November) was above the

target price, no payments were normally received by

the grower from the government.

The 1988 and 1989 farm programs required a certain

number of acres to be diverted from wheat. Produc-

ers were paid a deficiency payment. The payments,

when added to the market price the grower received

for wheat, equaled the total wheat income. It was nec-

essary to convert these payments to an amount per

bushel of wheat raised.

In today’s market, the government continues to provide

wheat and barley subsidies for price control and is more

actively involved in crop insurance to minimize loss

from crop failure not covered by private insurance.

To ensure that all the counties are using a similar base

on which they compute farm use specially assessed

values for wheat land, the market price of wheat will

be determined annually by the Department of Reve-

nue, and the expense period as shown in the following

example will be used.

Assessor’s class III dryland wheatland

(crop/share) (summer fallow area)

Basic data:

1. The typical rental agreement is a crop/share rent

with the landlord, who only furnishes land, receiv-

ing one third of the crop and paying one third of

the cost of fertilizer, spray material and their appli-

cation expense plus the cost of fire and hail crop

insurance. In addition, the landlord pays all the

property taxes and liability insurance.

2. Typically, 90 percent of the crop is planted in wheat

and the 10 percent not in wheat is rotated into

barley.

3. The price of wheat determined by the Department

of Revenue for 2006 issued to the assessor was $3.72

3-8 150-303-422 (Rev. 11-07-22)

per bushel. This price is the average of the two pre-

ceding August 1 through December 31 dates, for No.

1 soft white wheat, adjusted for grades, at Portland,

Oregon. Based on tenant delivery to the local eleva-

tor, the average marketing and storage costs the

past two years has been $0.46 per bushel (storage

0.06, handling 0.12, transportation 0.25, and wheat

growers tax 0.03). $3.72 less $0.46 = $3.26 net to the

grower. The average government subsidy payments

for the last two years is $0.52 for the bushels raised.

The $0.52 added to the $3.26 wheat price equals the

total income from wheat—$3.78 per bushel with

typical yields of 55 bushels per acre. Note: Any

other legitimate income or expenses may require an

adjustment to the price.

4. For illustration purposes, the average price of fer-

tilizer was $0.50 per pound of nitrogen and $5.35

per acre for spray material for the past two years.

One and one-quarter pound of nitrogen fertilizer

is applied for each bushel of wheat production. One

pound of nitrogen is applied for each bushel of bar-

ley production—with typical yields of 50 bushels

per acre.

5. Crop insurance has been running $1 ($0.70 for hail

and $0.30 for fire) for each $100 of insured value.

Liability insurance based on the typical opera-

tion size has been $0.10 per $100 gross income.

Multi Peril Crop Insurance (MPCI) for uninsured

crop losses such as drought or crop failure is typi-

cally $5.00 per acre in the county. Note: CRC Fed-

eral Crop insurance for uninsured crop losses is

another form of government crop insurance avail-

able but the typical grower in the county prefers

MPCI.

6. The typical wheat farm in the county isn't fenced.

For those farms that are fenced only about one third

of the landlords pay any of the fencing cost. (Tenant

doesn't pay extra for any grazing.)

Valuation:

Gross income per acre

55 bushels per acre yield at

$3.78 = $207.90 x 0.9 = $187.11

50 bushels per acre yield at

$2.50 = $125 x 0.1 = +12.50

$199.61

Landlord receives 1/3 of crop every other year from

each acre (1/3 ÷ 2 years = 1/6)

Annual landlord gross income

$199.61 x 1/6 $33.27

Landlord expenses:

Fertilizer (nitrogen):

Wheat 68.75 lbs. N x

$0.50 = $34.38 x 0.90 $30.94

Barley 50 lbs. N x

$0.50 = $25 x 0.10 2.50

Weed spray 5.35

Crop ins. $199.61 x $1 per $100 2.00

MPCI ins. $5/acre + 5.00

$45.79

$45.79 x 1/6 = $7.63

Management ($33.27 x 5%) 1.66

Liability ins. $199.61 x $0.10 per $100 + 0.20

Total landlord expenses – 9.49

Annual net income $23.78

Interest rate 7.11% Certified by DOR

Tax rate + 1.62% Estimated rate for the

district in which the

property is located

Capitalization rate 8.73%

$23.78 ÷ 8.73% = $272 Farm use SAV

Livestock area

The major rental data available in a livestock area will

be in the form of pasture rentals. Landlords rent pas-

ture land on an animal unit month (AUM) basis (for this

example). An AUM is the total amount of feed needed

by one mature beef cow for one month equivalent to

a 1,000 pound animal. It furnishes about 400 pounds

of total digestible nutrients (TDN) and is equivalent in

feed value to about 800 pounds of hay.

Types of pasture will vary in carrying capacity and in

rental rates from rangeland to irrigated meadows. The

rental rates may vary from county to county and may

vary within a county, depending on location and type

of pasture available. Use the rental rate that is typical

for the area and type of pasture.

Assessor’s class III meadow hayland

(owner/operator) (AUMs)

The following is an example using an owner/operator

setup. The costs are for illustration only. Local costs and

cultural practices must be used. Normally this method

of computation of farm use values will be used only

when there is no rental data available.

Basic data:

1. 300 acres of flood irrigated meadow hayland on a

10,000 acre ranch.

2. Hay yield is 2 tons per acre and is valued at $75 per

ton.

3. 1/2 AUM per acre of aftermath grazing having a

value of $10 per AUM.

3-9 150-303-422 (Rev. 11-07-22)

4. Labor is charged at $7 per hour.

5. 50 HP tractor at $8 per hour.

6. Self propelled swather at $20 per hour.

7. PTO twine baler at $17 per hour.

8. Machinery expenses of $1.25 per hour for irriga-

tion, $3 per hour for stacking, and $3 per hour for

fencing.

9. Other expenses such as custom fertilizing at $15

per acre, baling twine at $6 per acre, fence material

at $.50 per acre, interest on capital at $3 per acre,

general overhead at $4 per acre, and typical man-

agement of 8 percent of gross income.

Valuation:

Gross income per acre

Hay—2 tons at $75 $150.00

Aftermath grazing—1/2 AUM at $10 5.00

Total gross income $155.00

Owner/operator expenses

Operation

variable

Labor

Machinery

Total

other Cost Hours Value

Harrow 0.20 $1.40 $1.60 $3.00

Fertilize Custom $15.00 15.00

Irrigate 2.00 14.00 2.50 16.50

Swathing 0.25 1.75 5.00 6.75

Baling 0.50 3.50 8.50 Twi ne 6.00 18.00

Stacking 1.50 10.50 4.50 15.00

Fences 0.50 3.50 1.50 Material 0.50 5.50

Fixed: Interest on operating capital 3.00

General overhead 4.00

Management at 8% of gross* + 12.40

Total expense $99.15

Gross income per acre $155.00

Total expenses – 99.15

Net income $ 55.85

Interest rate 7.11 % Certified by DOR

Tax rate + 1.62 % Estimated rate for the district in which the property is located

Capital ization rate 8.73 %

$55.85 ÷ 8.73% = $639 Per acre (includes growing crops)

– 64 Value of plants at (10% of value based on sales)

$575 Farm use value per acre for assessor’s class III meadow hayland.

* Includes management of the ranch operation and management of the investment.

3-10 150-303-422 (Rev. 11-07-22)

Assessor’s class VII rangeland

(crop value) (AUMs)

Usually it requires more than 1 acre of rangeland to

provide the forage for one animal-unit-month (AUM).

The number of acres required to provide an AUM may

affect the rental rate.

Basic data:

1. Six acres required to furnish one AUM of feed.

2. Land rents for $12 per AUM.

3. The landlord expenses are management, material

for fence maintenance, and liability insurance.

Valuation:

Landlord gross income per acre

$12 per AUM ÷ 6 acres per AUM $2.00

Landlord expenses

Management at 3% $0.06

Fence maintenance material 0.10

Insurance + 0.05

–0.21

Landlord net income to land

before property taxes $1.79

Interest rate 7.11% Certified by DOR (2006)

Property tax rate + 1.62% Estimated local tax for

the district

Capitalization rate 8.73%

$1.79 ÷ 8.73% = $20.50 per acre (includes growing crops)

Less value of

growing crop – 2.05 (10% of value; ORS 307.320)

$ 18.45 ($18 rounded) Farm use value

per acre for assessor’s class VII

rangeland

It may be that rental data is too scarce on hay land to be

used for arriving at farm use value. In such instances,

it will be necessary to use the owner/operator’s income

method. The “Enterprise data sheets,” developed by

the Cooperative Extension Service, Oregon State Uni-

versity, will be helpful in analyzing the income and

expenses of an owner/operator property.

Developing rate of return

Sale no. 1 ($300,000 down, balance @ 7%) $ 1,300,000

Improvements $220,000

Personal property 30,000

Dwelling site 1 acre (+OSD) + 50,000

– 300,000

Net to farm land $ 1,000,000

Acres Land

class

Typical

rent/acre

Property

expenses/acre

Typical

tax/acre

Net

income/acre

Net operating

income

700 III $50.00 $2.50 $8.82 $38.68 $27, 0 76

160 V 17. 5 0 1.53 2.97 13.00 + 2,080

Total net income to farm land $29,156

$29,156 ÷ $1,000,000 = 2.9% rate of return (after property tax)

All usable sales are analyzed in the above manner and

the indicated rates are tabulated into final rate of return

estimates for each land class.

Rates of return are used to calculate return on invest-

ments. The previous example was non-irrigated farm-

land. When a sale of irrigated land includes the real

and personal property irrigation equipment, a portion

of the rent needs to be apportioned to allow the owner

a return for the irrigation equipment investment. In the

previous example, only the farmland was capitalized

to develop a rate of return for the land. The examples

in this manual use the same rate of return for land and

irrigation improvements, however, in practice rates of

return for irrigation equipment should be analyzed

and capitalized separately from land.

3-11 150-303-422 (Rev. 11-07-22)

Other considerations when valuing

farm properties

Determine crop deduction

ORS 307.320 defines items grown on agriculture lands

that are to be exempted. They include:

• Cultured Christmas trees.

• Deciduous trees.

• Shrubs.

• Plants or crops (annual or perennial).

• Hardwood timber.

To make sure the value of the plants and crops are not

included in the appraised value of the land, deduct the

value of any trees, plants and crops from sales before

establishing base unit values.

1. For land in production (owner occupied), deduct

the value of any plants or crops included in a sale.

Consider:

a. The cost of the seed, shrub, nursery tree, or cut-

ting.

b. The cost of planting and establishing a crop.

c. The risk involved in:

(1) Establishing the stand (loss implies replant-

ing).

(2) Continuing the stand (loss of an annual har-

vest).

d. The quality and quantity of the stand.

If you have enough sales of bare land to establish

the base value, you will have met the statutory pro-

visions. However, this probably won’t occur except

in areas that are primarily devoted to grain farm-

ing. In other areas, bare land sales may be only of

sufficient quantity to provide a check on the value

of the growing crop arrived at by the cost of estab-

lishing the stand. You can get information about

the cost of seed and planting costs from extension

service offices, farmers, and others involved in

agriculture.

2. For bare land not in production or leased land with

no expenses to the owner, no crop deduction is

warranted.

Water rights

Irrigation is an important addition to the land, provided

the land can respond to the water. The same amount of

water applied to two different types of soil can produce

different benefits. This may result in different values to

the water right.

Water right priorities are based on the date the water

right was established. The earlier the water right is

established, the greater the right to benefit from avail-

able water.

When a water right is secured for a parcel of land

through the application and approval process, that

right is adjudicated to the land. The value of the water

is generally reflected in the land value. The exception

is where the water is applied to different parcels of

land within the ownership in different years. In these

cases, and in areas where water rights can be sold sep-

arately, the water may be valued separately from the

land. There are several sources from which water for

irrigation can be obtained. Information regarding these

sources or water rights in general is available from:

• Irrigation district offices.

• District Water Master.

• Oregon Water Resources Department.

Valuation of water rights

The value of water rights can be easily determined if

sales of similar land exist, where one sale having water

rights can be compared to another that doesn't. Also, in

areas where water rights are sold separately from the

land, the value of the water right will be found in sales

of the water right only. In areas where the water rights

are not sold separately, the value can be determined by

capitalizing the added production from irrigation into

an indication of value for the water.

Applying land values

Record the number of acres. Apply the unit value for

the class identified and compute a total value of all

acres in each class. Adjustments for special consider-

ations such as flooding or water right restrictions can

be made as an adjustment to the land class value for

the acres involved. Any increments to the land such as

water rights, natural resources and real property irriga-

tion equipment should be documented as a comment

on the “specially assessed land appraisal” card and

recorded on the back side of the real market value “land

appraisal” card.

Homesites

Homesites that qualify for special assessment under

ORS 308A.256 are to be valued at the average real mar-

ket value of “one acre” of land for the total contigu-

ous acres under the same ownership. This does not

mean they have to BE a physical acre-only the method

of valuing a homesite uses the acre standard, EFU

3-12 150-303-422 (Rev. 11-07-22)

homesites automatically qualify if they are used in con-

junction with an acceptable farming practice. Non-EFU

homesites will be recorded on the “land appraisal”

at real market value in accordance with ORS 308.205

and 308.146, unless they qualify by annual application

under ORS 308A.253. The bare land value of the home-

site is the average value of one acre of land as calcu-

lated under ORS 308A.256 even if the physical size of

the homesite is more or less than one acre.

OAR 150-308-1140 onsite developments of a qualifying

homesite are to be recorded on the “specially assessed

land appraisal” card. The onsite developments are to be

valued at $4,000 or their depreciated replacement cost,

whichever is less. Onsite developments are defined

under OAR 150-307-0010. (See also “Valuation of farm

and rural homesites” in this section of the manual.)

Note: For buildings that house farm workers see “Land

under farm buildings.”

Woodlots

Woodlots up to 20 acres should be specially assessed

using their underlying farm use land classification. Any

woodlot acres over 20 acres will need to be recorded on

the “land appraisal” card based on real market value,

unless it qualifies as forestland. Any qualifying forest-

land will be recorded on the “specially assessed land

appraisal” card. (See “Qualification” chapter of this

manual for additional information.)

Wasteland

Wasteland is specially assessed by its underlying land

classification which is generally class VII or VIII. EFU

wasteland automatically qualifies for special assess-

ment. Non-EFU wasteland will need to be recorded on

the “land appraisal” card based on real market value,

unless it qualifies by annual application under ORS

308A.074.

See an example of a “specially assessed land appraisal”

card on page 3-13.

Valuation of dwellings, rural buildings,

and real property improvements

The valuation of dwellings, farm buildings and real

property improvements are to be valued and assessed

at the lesser of real market value or maximum assessed

value (ORS 308.232 and 308.146).

Dwellings

The residential buildings on farm properties are influ-

enced by many of the same factors that determine

value for single family dwellings. The best support for

market indications and depreciation guides may be

developed by using data gathered from sales of tract

type properties in an area having similar amenities.

Use the Department of Revenue Cost Factors for Residen-

tial Buildings to develop replacement cost values.

Record dwelling information on a “Residential

appraisal” card in the same way as for any residential

appraisal.

Land under farm buildings

Farm buildings are defined by ORS 308A.056 as “build-

ings supporting accepted farm practices.” The land

under farm buildings supporting accepted farm prac-

tices is employed and is given the same special assessed

farm use value as if the land were in production. Barns,

machine sheds, shops, utility buildings, dairy build-

ings, egg production, seed cleaning/storage, potato

sheds and buildings that house farm workers are

examples of buildings supporting accepted farm prac-

tices. Land under farm-related buildings shall include

the area around the buildings for access and parking,

which is a necessary function for the farm operation.

Land under farm processing facilities

EFU land under buildings used for processing or retail-

ing other farmers products or changing a farm product

to a different product must meet processing facility cri-

teria of ORS 308A.056, otherwise the land doesn't qual-

ify as a building supporting accepted farm practices

and must be valued and assessed based on real market

value in accordance with ORS 308.205 and 308.146. (See

“Qualification” chapter of this manual for additional

criteria.)

Farm buildings

Review the farming operations in the area and establish

building benchmarks to indicate the types and sizes of

the buildings that constitute functional improvements.

With the typical types of farm buildings in mind, you

can answer the following questions to develop a rea-

sonable value estimate for farm buildings.

1. In your judgment, what is the estimated physical

condition of the building?

2. Does the building now, or could it, provide practi-

cal shelter for livestock, grain, feed, machinery, or

supplies on the subject property?

3. Does the building conform to the present farming

systems of the area? If not, could it be economically

altered to fit?

4. Does all or part of the building contribute to the

value of the farm?

5. Is the building typical of the area?

3-13 150-303-422 (Rev. 11-07-22)

3-14 150-303-422 (Rev. 11-07-22)

6. If the building is destroyed, would it be replaced by

the same building today?

7. Does the building add an aesthetic value that the

market recognizes?

In most cases, answering these questions will help

determine the amount of accrued depreciation that

applies to a particular farm building. Farm buildings

not used for their original purpose should be adjusted

to reflect the present usefulness or aesthetic value,

rather than the use intended by its original design.

Due to changing farming methods and/or crops, it is

common to find farm buildings that are limited in use

or completely unnecessary to the present farming oper-

ation. You must estimate the percent usefulness of the

buildings. Often, buildings with little or no utility are

given a value by appraisers merely because the build-

ing exists. However, your value estimate should reflect

actual market value. If a particular building doesn't

have value to purchasers it shouldn't be included in

the appraisal as a value item. It is correct, however, to

note the existence of the building on the appraisal card

and state a reason for zero value (if the account is an

improvement only account, the overall value cannot be

zero).

Example of percent useful: The subject building is a

3,000-square-foot loft barn in good physical condi-

tion. However, due to changing farming practices, it

is now used as a machine and seed storage building.

New construction in the area for the same use is typi-

cally a 2,000-square-foot utility building. The physical

percent good of the subject is estimated at 75 percent.

To find the percent useful, the cost new of the replace-

ment building is divided by the cost new for the subject

building. The costs new are estimated by using the cost

factors contained in the Department of Revenue’s Cost

Factors for Farm Buildings.

Calculating replacement cost new:

Step 1

Class 5—utility building

2000 sq. ft. x $6.70 = $13,400 (cost new)

Class 5—loft barn

3000 sq. ft. x $10.40 = $31,200 (cost new)

Calculating the percent useful:

Step 2

Utility building/loft barn = percent useful

$13,400/$31,000 = 43%

Note: Physically, the loft barn appears to be approxi-

mately 75 percent good.

Calculating the percent good:

Step 3

75% physical x 43% useful = 32% good

Depreciated replacement cost = $31,200 x 0.32 =

$9,984

Other forms of functional obsolescence must be consid-

ered separately. The above technique doesn't measure

obsolescence resulting from poor layout and design.

Examples of these include low ceiling height, support

posts set closely together, and other items that restrict

use.

Another type of functional obsolescence is over-

improvement caused by a super abundance of build-

ings. Each building may be typical of the building type

needed for the present highest and best use of the land.

Due to a surplus number of buildings, each building

is assigned a portion of the obsolescence reflected in

the total. For example, there are three hay storage barns

on a property that needs only two. In such a case, each

building suffers an equal amount of functional obsoles-

cence. If one of the buildings is unfavorably located and

is seldom used, most or all of the obsolescence would

likely accrue to that building.

On the back side of the “Residential appraisal” card,

record the farm building inventory and complete the

building diagram showing the location of the farm

buildings in relation to the residence. See an example

on page 3-15.

Real property improvements

Building fixtures such as milking and milk storage

equipment, seed cleaning, automatic feeders, wired

in computers, built-in appliances, plumbing fixtures,

electrical fixtures, processing equipment, cages, stan-

chions, and stalls are to be valued and assessed at real

market value in accordance with ORS 308.205.

In accordance with ORS 307.397, the following real

property improvements are exempt if they are used for

agricultural or horticultural purposes:

• Frost control systems.

• Trellises.

• Hop harvesting equipment.

• Oyster racks, trays, and stakes or other in-water

structures used to raise bivalve mollusk.

• Fresh egg shell equipment.

• Field burning equipment.

Buried irrigation, motors, pumps, pumping stations,

and electrical service that are real property improve-

ments are to be inventoried and assessed on the back

side of the “Land appraisal” card. If pumping stations

and irrigation pipes are located in more than one taxing

district, they must be separately inventoried in the tax-

ing district in which they are physically located. A well

is considered to be part of the land and its value will

3-15 150-303-422 (Rev. 11-07-22)

3-16 150-303-422 (Rev. 11-07-22)

be included with the farm use land value. Center piv-

ots, wheel lines, movable set lines, pumps and motors

above the irrigation riser are exempt from taxation by

ORS 307.398. Water rights, natural resource information

and real property irrigation systems are to be recorded

as increments to the land on the back side of the “Land

appraisal” card. See the example below.

Valuation of farm and rural homesites

Farm homesite valuation and assessment

(qualifying homesite)

The valuation and assessment of the homesite is a dif-

ferent special assessment with different processes and

procedures from the valuation and assessment of farm-

land. The qualification or disqualification of a home-

site doesn't effect whether or not farmland continues

to qualify for farm use special assessment. However, a

farm use homesite may only qualify for homesite spe-

cial assessment if it is used in conjunction with quali-

fied farm use land. (See “M-50 calculation examples” in

the addenda of this manual.)

OAR 150-308-1140 defines a parcel as a quantity of land

that is capable of being described in a single description

by a closed traverse, or as one of a number of subsec-

tions or sections in a township(s), or as lots, blocks, or

tracts in a subdivision. (See Forestland Special Assess-

ment Procedures manual for additional information and

examples defining a parcel.)

OAR 150-308-1140 defines contiguous as having a com-

mon boundary to some extent greater than a point.

When analyzing same ownership, go through one par-

cel to get to another parcel in all directions as long a

thread of title ownership continues to be common with

the specially assessed homesite parcel.

3-17 150-303-422 (Rev. 11-07-22)

Specially assessed value (SAV) farm homesite

(qualifying)

The valuation of a farm homesite acre for an EFU zoned

parcel or qualified non-EFU parcel is a special assess-

ment and is found under ORS 308A.256.

A homesite may be of any size. Regardless of the size

of the homesite, ORS 308A.256(3) requires the value of a

qualifying homesite to be the value of 1 acre.

Under this statute the value of 1 acre of land for each

homesite must be calculated as the average market

value per acre for the total contiguous ownership plus

the value of the onsite improvements (or OSD), limited

to $4,000.

To determine the value of a qualifying homesite:

1. Total the number of acres of bare land of the parcel

and contiguous acres under the same ownership.

2. Divide the total real market value of the subject’s

bare land acreage by the total number of acres. The

real market value is determined by comparing the

subject with parcels of similar size and amenities

that have recently sold.

3. Add a maximum of $4,000 for the improve-

ments necessary to establish the homesite. OAR

150-308-1140.

Land comprising homesites for dwellings being used

in conjunction with farm use in EFU zones and non-

EFU qualifying homesites shall be valued at the special

value provided by ORS 308A.256.

Land comprising a non-qualifying homesite shall be

assessed based on its real market value as defined in

ORS 308.146 pursuant to ORS 308A.259. See “Valuation

of rural homesites (non-qualifying).”

“Homesite” is the raw land, and improvements to

the land, under and adjacent to a dwelling, and other

structures if any, which are customarily provided in

conjunction with the dwelling and are defined as site

improvements by OAR 150-307-0010. Land comprising

the homesite for qualifying farm use dwellings includes

those amenities associated with the raw, undeveloped

land. Examples include topography that afford the site

a particular view, property access, and utilities access.

OAR 150-308-1120.

“Site developments” are improvements to the land

that become so intertwined with the land as to become

inseparable. Examples of land improvements for on-

site development for homesites include but are not lim-

ited to:

(A) Domestic wells.

(B) Domestic water supply systems.

(D) Gravel driveway and roads necessary for access to

the dwelling.

(E) Landscaping and related improvements.

(F) Extension of utilities to the dwelling, and

(G) Other offsite developments or onsite developments

on or under the land created for the dwelling and

associated buildings and structures.

“Onsite developments” are synonymous with site

improvements, and site preparation. Site developments

consist of both “offsite developments” and “onsite

developments.”

OAR 150-308-1140 and OAR 150-307-0010

The value of site development improvements shall be

included as part of the land value. Site development

value shall be carried as a separate item on the land

record for specially assessed farm land.

“Other land improvements” may include such items

as paved driveways, fencing, elaborate access entrance,

and landscaping that doesn't contribute to the home-

site. These land improvements are not onsite develop-

ments and are to be assessed based on market value

under ORS 308.146.

Buildings, structures, improvements, machinery, and

equipment are not onsite developments and are to be

assessed based on market value under ORS 308.146.

These are improvements on the land are real property

when erected upon or affixed to the land.

Valuation of rural homesites (non-qualifying)

Non-qualifying homesites are valued and assessed

based on rural land appraisal concepts under OAR

150-308-0240 the same as any other rural homesite. The

rural homesite value is a component of only the parcel

the homesite is located on and an adjustment for utility

shall be made to the homesite value for such amenities

as view or river frontage. This differs from the assess-

ment of a qualifying specially assessed homesite which

requires any added value for homesite amenities to be

divided as an average with all of the contiguous com-

mon ownership acres and parcels.

Oregon Administrative Rule (OAR) 150-308-0240 states:

The real [market] value for rural lands shall be

based on an average price per acre for each size of

parcel. Adjustments to the value shall be made to

those acres with more or less utility. For improved

parcels the value of the site developments as

defined by OAR 150-307-0010 must be added.

Under this rule, the value of a homesite is calculated

as the average market value per acre for the parcel,

plus the value of onsite developments with no limita-

tion. However, if the homesite has additional utility

3-18 150-303-422 (Rev. 11-07-22)

or inutility features such as a river front, view, poor

access, etc., the homesite value can be adjusted for such

features or amenities. The value of the homesite, how-

ever, isn't considered a utility adjustment. The utility

value of the homesite is to be calculated as part of the

average market value per acre for the parcel. If zoning

allows greater utility such as land divisions, then land

schedules can be developed to reflect typical land divi-

sion sizes occurring in the market area.

Both the qualifying and non-qualifying homesite

procedures require an average market value for the

homesite acre. A difference in value and procedure is

recognized when it is necessary to make an adjustment

for utility, zoning, or contiguous acres of common own-

ership. Where qualifying EFU or qualifying non-EFU

has a $4,000 OSD value limit, rural residential home-

sites are assessed based on market value and don't have

an OSD limit.

(See “Farm/forest specially assessed RMV, SAV, MAV,

& AV calculation matrix” and “M-50 calculation exam-

ples” in the addenda of this manual.)

Measure 50 maximum assessed value

limitations

Maximum assessed value (MAV) for the

account

ORS 308.146 (MAV for the account)

Property tax limitation Measure 50 requires that a

maximum assessed value (MAV) be determined for all

tax accounts. For the tax year beginning July 1, 1997, the

MAV is the tax account’s 1995 real market value minus

10 percent. For subsequent tax years, the MAV is equal

to 103 percent of the assessed value (AV) for the pre-

ceding tax year or 100 percent of the MAV for the pre-

ceding tax year whichever is greater. The market value

based MAV is allocable to all improvements, homesites

and land.

Maximum assessed value (MAV) for the

market portion

ORS 308.146 (MAV for the market portion)

The market portion for a tax account is any land, home-

sites or improvements that don't qualify for special

assessment, partial exemption or exemption and must

be assessed based on market value as specified in ORS

308.146.

For the tax year beginning July 1, 1997, the maximum

assessed value (MAV) for the market portion of the

account is the real market value determined under ORS

308.205 for the tax year beginning July 1, 1995, reduced

by 10 percent.

For tax years beginning after July 1, 1997, the MAV

for the market portion is equal to 103 percent of the

assessed value (AV) for the preceding tax year or 100

percent of the MAV for the preceding tax year, which-

ever is greater.

Maximum specially assessed value (MSAV) for

farmland portion

ORS 308A.107 (MSAV for the specially assessed

portion)

For the tax year beginning July 1, 1997, the farmland

maximum specially assessed value (MSAV) per acre is

the value per acre for each class and area determined

under ORS 308.370 (now ORS 308A.107) for the tax year

beginning July 1, 1995, reduced by 10 percent.

For tax years beginning after July 1, 1997, the MSAV per

acre is 103 percent of the farmland MSAV per acre for

the previous assessment year. Thereafter, the farmland

MSAV was increased by 103 percent annually through

the 2001–02 tax year. Beginning July 1, 2002 and for

each tax year thereafter, the farmland MSAV per acre

for each class and area is equal to 103 percent of the

assessed value (AV) per acre for the preceding tax year

or 100 percent of the MSAV per acre for the preceding

tax year, whichever is greater.

For the MSAV on property that newly qualifies, use cor-

responding SAV and MSAV tables to determine the AV

the same as any other land that is specially assessed.

ORS 308A.107(6)

If a new land class study is performed, follow the pro-

cedure outlined under OAR 150-308-1090.

Maximum specially assessed value (MSAV) for

homesite portion

ORS 308A.256 (MSAV for the specially assessed

portion)

For the tax year beginning July 1, 1997, the homesite

maximum specially assessed value (MSAV) is the value

determined under ORS 308.377 (now codified under

ORS 308A.256) for the tax year beginning July 1, 1995,

reduced by 10 percent.

For tax years beginning after July 1, 1997, the home-

site MSAV is 103 percent of the homesite MSAV for the

previous assessment year. Thereafter, the homesite

MSAV was increased by 103 percent annually through

the 2003–04 tax year. Beginning July 1, 2004 and for

each tax year thereafter, the homesite MSAV is equal

to 103 percent of the homesite’s assessed value (AV) for

the previous tax year or 100 percent of the homesite’s

MSAV for the previous tax year, whichever is greater.

3-19 150-303-422 (Rev. 11-07-22)

The homesite MSAV for homesite’s that newly qualify

for the first tax year is calculated using a ratio per ORS

308.377(6) [now codified under ORS 308A.256(6)].

Assessed values (AV) for the account

ORS 308.146 (AV for the market portion)

ORS 308.156 (AV for disqualified farmland or

homesites)

ORS 308A.107 (AV for the specially assessed farmland

portion)

ORS 308A.256 (AV for specially assessed homesite

portion)

Measure 50 (M-50) tax limitation under ORS 308.146(4)

requires any portions of an account that is specially

assessed land or homesites for farm use to be processed

to an assessed value under ORS 308A.107 (farmland)

and 308A.256 (homesites). Any taxable portions (land

and improvements) being assessed based on market

value will be processed under ORS 308.146 or in the

year of disqualification processed under ORS 308.156(4)

(a) or (b).

In the first year specially assessed farmland or a home-

site is disqualified the market based MAV is calculated

as an exception as specified under ORS 308.156(4)(a)

and the exception amount is added to the MAV mar-

ket portion under ORS 308.146 in subsequent tax years.

(See appendix for ORS 308.156, MAV exceptions follow-

ing a disqualification.)

As specified in ORS 308.156(4)(b), don't process the mar-

ket based MAV if the land changes to a different type

of special assessment, partial exemption or exemption.

Process the M-50 limitation under the program grant-

ing the partial exemption or special assessment.

The M-50 value for the account is a sum of the assessed

values under 308.146 for the market portion, 308.156(4)

(a) for any disqualified portions, ORS 308A.107 for spe-

cially assessed farmland portions, and 308A.256 for

specially assessed homesite portions. The M-50 value

for the account may also include in the sum total other

assessed values, such as forestland, wildlife habitat, or

open space special assessments.

(See “Specially assessed RMV, SAV, MAV, & AV calcu-

lation matrix” and “M-50 calculation examples” in the

addenda of this manual for additional information.)

4-1 150-303-422 (Rev. 11-07-22)

Before you disqualify

Process each disqualification with the understanding that

the action can be appealed. It is very important to select

the correct statutory reason and to follow the appropri-

ate procedures for disqualification. You will need to be

prepared to defend the action in court. Failure to cite the

correct statute for disqualification could render the dis-

qualification invalid. The objective is to provide accurate

administration of the special assessment programs.

Disqualifications and special

assessment programs

Unless otherwise noted, disqualifications of qualified

land and homesites in this farm procedures manual

apply only to the following related special assessment

programs. These are the programs that ORS 308A.706(1)

(d) and ORS 308A.718 has paired together. A taxpayer

can change to any one of these special assessment pro-

grams with a timely application or request following a

disqualification provided the land can meet the quali-

fication requirements.

(See “Hexagon diagram” in the appendix.)

Land

• Exclusive farm use (EFU) (ORS 308A.062).

• Non-exclusive farm use (non-EFU) (ORS 308A.068).

• Designated forestland (DFL) in western Oregon

(ORS 321.358).

• Designated forestland (DFL) in eastern Oregon

(ORS 321.839).

• Small tract forestland (ORS 321.709).

• Wildlife habitat (WLH) (ORS 308A.424).

• Open space (OS) for certain golf courses

(ORS 308A.727).

Homesite

• Homesites used in conjunction with farm use, for-

est use, and wildlife habitat special assessment (ORS

308A.250 to 259).

Types of farm use disqualifications

Exclusive farm use (EFU) (ORS 308A.113)

• No longer in farm use.

• Land is removed from an EFU zone.

• Non-farm dwelling (ORS 215.236).

Non-exclusive farm use (non-EFU) (ORS 308A.116).

• Taxpayer request.

• Land is sold or transferred to an ownership making

the land exempt .

• No longer in use.

• No longer in use for failure to meet income require-

ments under ORS 308A.071.

• Recording a subdivision plat.

Farm homesite (ORS 308A.259)

Government exchange (ORS 308A.730)

Reviewing an account for

disqualification

Special assessments only apply to land and homesites.

Improvements such as dwellings, barns, permanent

structures, fixtures, automatic feeders, milking equip-

ment, seed cleaning equipment, and processing equip-

ment are taxable based on market value and are not

specially assessed or exempt unless otherwise required

by law. (See “Qualification” section for “Exempt farm

property.”)

Homesites are comprised of the bare land that is used

for a residential dwelling and the onsite developments

(OSDs) which support the residential dwelling. As spec-

ified in OAR 150-307-0010, OSDs include but are not

limited to items such as grading, fill, drainage, wells,

water supply systems, septic systems, utility connec-

tions, extension of utilities to any structure(s), retaining

walls, landscaping, and graveled driveway areas.

Generally, only EFU homesites that are used in con-

junction with the farming activities in EFU zones qual-

ify. Non-EFU homesites require an annual application

that most taxpayers can’t meet [see ORS 308A.253(3)], so

very few if any non-EFU homesites in a county qualify

for homesite special assessment even though the non-

EFU homesite may be used in conjunction with quali-

fying farm use land. Homesites that are rented out

to someone not involved in farm use activities don’t

qualify and should be disqualified. Vacant homesites

can’t be disqualified (ORS 308A.259). (See “Homesite

disqualifications” for additional information.)

An account may be comprised of multi-uses and assess-

ments. Often farm properties will have other types of

special assessment such as a portion of the account will

be in forestland or wildlife habitat special assessment.

Each special assessment program is assessed separately

under their own statutes. While there may be several

Disqualification

4-2 150-303-422 (Rev. 11-07-22)

different special assessments in the same account, there

can’t be more than one special assessment on the same

land at the same time. Special assessments can’t overlay

or overlap one another. Any acres that don’t maintain

an acceptable farm use practice can be disqualified and

still allow any remaining acres that do meet an accept-

able farm use practice to remain qualified for special

assessment. Qualification or disqualification is deter-

mined from year to year. At anytime the land no longer

qualifies, it should be disqualified.

When reviewing an account over time from year to

year portions of an account may change as other por-

tions of the same account continue to qualify, or change

to a different special assessment, or may be disquali-

fied. When reviewing an account, look at each year and

each acre of assessment individually for any changes

that may have occurred.

When land is removed from special assessment, the

first step in the process is to determine what is to be dis-

qualified and the reason for the disqualification. You

need to go to the statutes that apply to the land use. If a

portion of a property is EFU, and a portion is non-EFU

land, and a portion is forestland, then disqualify the

EFU portions under the EFU statutes and the non-EFU

portions under the non-EFU statutes and the forestland

portions under the forest use statutes. Homesite dis-

qualifications are also processed under different stat-

utes than land use disqualifications. Homesites can’t

continue to qualify if the land used in conjunction with

the homesite is disqualified.

Processing a disqualification and

Measure 50 requirements

After determining the reason for the disqualification

and the appropriate statutes to disqualify, process the

disqualification under ORS 308A.718 taxpayer notifica-

tion. In the event the land or a homesite is disqualified

and then changes to another special assessment [roll-

over under ORS 308A.706(1)(d)] or a new application is

submitted (such as non-EFU income re-qualification

under ORS 308A.089), the land may continue to qual-

ify without a break in special assessment, however, it

is still processed as a disqualification for Measure 50

under ORS 308.156(4)(a) or (b) and the old application

or special assessment classification is no longer valid.

[See “Disqualification notification procedures” and

“ORS 308.156(4) MAV exceptions following a disquali-

fication” in the appendix of this manual.]

Measure 50, the 1997–98 tax reform bill, allows the

maximum assessed value (MAV) to be recalculated for

specially assessed or exempt property upon disqualifi-

cation [ORS 308.156(4)].

If the reason for the disqualification applies to ORS

308.156(4)(a), the disqualification is processed as a

“market MAV” exception under ORS 308.156(5) and

(6). If the reason for the disqualification applies to ORS

308.156(4)(b), the disqualification is processed as a “spe-

cially assessed MSAV” exception under the special

assessment or exemption program the land is changing

to and the “market MAV” isn’t processed.

[See appendix ORS 308.156(4) MAV exceptions follow-

ing a disqualification.]

Disqualifications involving new construction may

require the market MAV for the “land” to be calcu-

lated in a different year than the market MAV for the

“dwelling and onsite” improvements. The market MAV

for the “land” is calculated as a result of a disqualifica-

tion under ORS 308.156(4)(a) when land is cleared and

construction of the dwelling begins. If this disqualifi-

cation occurs between January 1 and August 14, then

ORS 308A.113 (EFU) and 308A.116 (non-EFU) require

the disqualification to be effective back the January 1

assessment date and the market MAV for the land is

calculated under ORS 308.156 (5) and (6). The dwelling

improvements occurring January 1 or later in the same

assessment year will receive a MAV calculation as new

improvements under ORS 308.153 in the next January 1

assessment year. Even though both changes occurred

at the same time, the market MAV for the land and

improvements will be processed in different years by

direction of statute.

In the event a special assessment is reinstated by the

tax court, the disqualification isn’t processed as a MAV

exception under ORS 308.156(4) and the old applica-

tion or special assessment classification remains valid.

Once the disqualification is appealed the assessor

can’t reinstate the disqualification, only the tax court

can reinstate an account that is in the appeal process.

Following a disqualification, additional taxes are pro-

cessed under separate statutes. If land or homesites are

disqualified, the additional taxes may or may not occur

depending on the circumstances of the disqualifica-

tion. (See “Additional tax” section of this manual.)

(See also “Disqualification notification procedures” in

the appendix of this manual.)

Effective date of disqualification

The disqualification isn’t effective until the assessment

and tax rolls have been changed.

Reference: Oregon Tax Court opinion Meeks v. DOR, 7

OTR 113 (1977) states “the actual change of the roll by

the county assessor or his duly authorized agent is the

essential overt act which proves the assessor’s exercise

of his judgment and establishes the disqualification as

having actually occurred.”

4-3 150-303-422 (Rev. 11-07-22)

A “no longer in use” disqualification isn’t effective

unless the ORS 308A.718 disqualification notification

letter is mailed to the taxpayer no later than August 14,

as specified by ORS 308A.113 (EFU) and 308A.116 (non-

EFU). (See also “Disqualification timing”—special pro-

vision for “no longer in use.”)

Sale or transfer to an ownership making land exempt

requires the land to be calculated for disqualification

and additional taxes one day preceding the sale or

transfer for land involving non-EFU, wildlife habitat, or

conservation easement special assessments as specified

under ORS 308A.703. Forestland special assessments

are specifically excluded from this requirement under

ORS 308A.709.

Disqualification timing—general rule

June 30 disqualifications: general rule

The assessment year is the calendar year. ORS 308.007(1)

(b). The assessment year beginning January 1 corre-

sponds to the current tax year beginning July 1 of the

same calendar year. ORS 308.007(2)(a). Changing the

assessment and tax rolls is the overt act that proves

and establishes the date of disqualification as having

actually occurred. Meeks v. Dept. of Revenue, 7 OTR 113

(1977), page 117. A disqualification may be made any-

time during the assessment year.

To be effective for the current tax year, the disqualifi-

cation date must occur between July 1 of the previous

assessment year and no later than June 30 of the current

assessment year, unless otherwise specified by law.

Example: A July 1, 2015 disqualification will be effective

for the current July 1, 2016 tax year. The July 1, 2016 tax

year is commonly called the 2016–17 or 16–17 tax year.

The disqualification notification letter required by ORS

308A.718 must be mailed to the taxpayer no later than

30 days following the date of disqualification. A dis-

qualification letter mailed beyond the 30 day period

required by ORS 308A.718 isn’t in compliance and is

invalid.

No longer in use disqualifications have special provi-

sions and don’t follow the general rule.

Disqualification timing—special

provision for “no longer in use”

August 14 disqualification notification letter:

special provisions

There is a special provision to allow discovery beyond

June 30 for disqualifications under ORS 308A.113 for

(EFU), and 308A.116 (non-EFU) for “no longer in use”

and “no longer in farm use for failure to meet the income

requirements of ORS 308A.071.” The disqualification

can occur at any time during the assessment year, but

is effective for the current tax year only if the disquali-

fication notification letter required by ORS 308A.718 is

mailed to the taxpayer no later than August 14 of the

assessment year. The disqualification is then processed

as if the land was disqualified back in time to the Janu-

ary 1 assessment date.

Disqualifications “after” the current

tax year timelines

Disqualifications must be on time. Land disqualified

after June 30 (general rule) or if the taxpayer disqualifi-

cation notification letter is sent after August 14 (special

provisions for “no longer in use”) will remain specially

assessed for the current tax year as specified in ORS

308A.062 (EFU) and 308A.068 (non-EFU). All MAV

calculations under ORS 308.156(4) are processed for a

change in assessment occurring in the next tax year.

The notification letter to the taxpayer under ORS

308A.718 must appropriately use the next tax year for

the change in assessment and additional tax calcula-

tions, otherwise the notification letter may be consid-

ered invalid in the event of a tax court appeal.

Disqualifications July 1 or after: general rule

A disqualification that occurs between July 1 and

December 31 of the assessment year shall continue to

qualify for farm use special assessment for the current

tax year as specified in ORS 308A.062 (EFU) and ORS

308A.068 (non-EFU). Example: A July 1, 2007 disquali-

fication will remain in farm use special assessment

for the current tax year 2007–08. The disqualification

notation on the assessment and tax rolls will remain

in effect for the disqualification date of July 1, 2007

and the appropriate change in assessment, additional

tax calculations, and all MAV calculations under ORS

308.156(4) will occur for the next tax year 2008–09.

Disqualifications August 15 or after: special

provision for “no longer in use”

No longer in farm use for failure to meet the income

requirements of ORS 308A.071:

[ORS 308A.116 (non-EFU)]

If non-EFU land is disqualified for failure to meet the

income requirements of ORS 308A.071, the disqualifi-

cation is invalid if it is mailed on or after August 15

of the assessment year. This type of disqualification

requires current information and due process as speci-

fied in OAR 150-308-1050. Request another non-EFU

questionnaire on or before March 1 of the next assess-

ment year to verify the land continues to be “no longer

in use.” Land that returns to a qualifying use can’t be

disqualified.

4-4 150-303-422 (Rev. 11-07-22)

No longer in farm use:

[ORS 308A.113 (EFU), 308A.116 (non-EFU)]

If the assessor sends the taxpayer the ORS 308A.718

disqualification notice on or after August 15 for a “no

longer in use” disqualification, the farm use special

assessment will continue to be assessed for the current

tax year as specified in ORS 308A.062 (EFU) or 308A.068

(non-EFU).

Example: An August 15, 2007 disqualification will

remain in farm use special assessment for the current

tax year 2007–08. The disqualification notation on the

assessment and tax rolls will remain in effect for the

disqualification date of August 15, 2007 and the appro-

priate change in assessment and additional tax calcula-

tions will occur for the next tax year 2008–09 if the “no

longer in use” continues.

Any disqualification notification letter sent for “no lon-

ger in use” after the August 14 timeline will have to

be reviewed for disqualification in the next assessment

and tax year. If in the next assessment and tax year cir-

cumstances change where the land will again continue

to qualify the assessor may not go back beyond the

previous calendar year to disqualify for “no longer

in use.”

Example: “No longer in use” for calendar year 2006 (tax-

payer notification letter under ORS 308A.718 sent to the

taxpayer after the August 14, 2007 timeline).

The disqualification becomes effective on the date the

assessment and tax rolls are changed (August 15, 2007),

however, the land will remain specially assessed until

the next tax year 2008–09 as specified in ORS 308A.062

(EFU) and 308.068 (non-EFU). When reviewing the

account for a disqualification for the next tax year

(2008–09), evidence of “no longer in use” in the 2006

assessment year isn’t a valid reason to disqualify. The

evidence for a change in special assessment for the

2008–09 tax year must come from the previous assess-

ment year 2007.

No longer in use disqualifications

Use “no longer in use” disqualification proce-

dures under ORS 308A.113 (EFU) and ORS 308A.116

(non-EFU).

Before a property is disqualified, OAR 150-308-1100

(EFU) and 150-308-1110 (non-EFU) requires the asses-

sor must:

• Make a reasonable effort to contact the owner, own-

er’s agent or person using the land;

• Make a site inspection of the property; and

• Request the recent history of the property’s use.

• Maintain a record of the inspection, any contact let-

ters or other means of contact between the assessor

and the taxpayer, and notations of the conditions

found that indicate a lack of a qualifying farm use.

This information must be maintained in the asses-

sors office for a minimum of three years.

• Request an income questionnaire if the land is being

disqualified for failure to meet income requirements

of ORS 308A.071.

Following are some considerations for “no longer in

use” disqualifications:

1. Current use is compatible with returning the

land to farm use special assessment.

A. Non-use.

Idle or vacant land that is, otherwise economi-

cally feasible to engage in a qualifying farm use.

B. Under-utilization.

Land that is engaged in a farming practice,

however, the farm use activity is insufficient to

qualify the land for farm use as defined under

ORS 308A.056.

Example: Spooner v. DOR (4 OTR, Feb 70). Only

enough sheep were pastured to qualify 30 of

125 acres. In this example, if any of the pasture

was capable of being hayed and the owner or

operator was haying the land, it may justify

that any acres being hayed would continue to

qualify. Disqualification for under-utilization is

a judgment call and will need to be researched

and well documented.

C. Unacceptable farm use practice.

Land is engaged in a farming practice where

the mode of operation isn’t common with farms

of a similar nature. (ORS 308A.056)

Example: A low production orchard that isn’t

pruned, fertilized, or maintained.

Example: Anderson v. DOR (OTR 2617 Feb 88)

Minimal and casual use of a property that

doesn’t intend to give rise to a profit in money

isn’t an acceptable farm use practice. In this case

the pasture was over-grown with blackberries,

lack of fertilization, lack of weed control, inad-

equate fences, and exhibited minimal or casual

management.

D. Failure to meet farm income requirements

under ORS 308A.071 (non-EFU only).

If there isn’t a break in farm use, as long as lim-

ited farm use continues, additional taxes may

be abated for non-EFU income disqualifica-

tions as specified in ORS 308A.119. There isn’t

4-5 150-303-422 (Rev. 11-07-22)

a definition for limited farm use. Limited farm

use implies the land may be under-utilized.

Only the land actually being used for limited

farming will qualify for abatement of additional

taxes. Limited farming must have evidence of

an intent to make a profit from farm sales or

services produced from land under abatement.

Any acres not being used for limited farming

won’t qualify for abatement.

E. Change to a different special assessment.

Farmland that changes to forestland special

assessment is “no longer in farm use.”

F. Change to a non-farm use compatible with

returning the land to farm use.

Example: A taxpayer makes a personal choice

to discontinue farming to engage in a conser-

vation easement. The conservation agreement

doesn’t prohibit the taxpayer from farming the

land. (ORS 308A.743)

G. Residential homesite not used in conjunction

with a qualifying farm use.

An EFU lot or parcel has farmable land that isn’t

currently engaged in a qualifying farm use. The

homesite will requalify at anytime a qualifying

farm use continues.

2. Current use is incompatible with returning the

land to farm use.

A. A lot or parcel in an EFU zone obtains a land

use approval for the establishment of a nonfarm

dwelling under ORS 215.236.

B. A taxpayer engages in a conservation easement.

The conservation easement prohibits the tax-

payer from farming the land. (ORS 308A.743)

C. An EFU lot or parcel is used entirely for residen-

tial purposes. The lot or parcel is approximately

one acre or less and doesn’t have any remaining

acres that could engage in a qualifying farm use

practice.

Residential, commercial, industrial, or any other

use that is incompatible with returning the land

to farm use isn’t eligible for deferral of additional

taxes under ORS 308A.706(1)(a). In some cases a tax-

payer may have an option to defer additional taxes

under a different section of ORS 308A.706, such as

a change in special assessment or not be required

to pay additional taxes under ORS 308A.709. Non-

EFU land that is used for an industrial, commercial

or residential or other use that is incompatible with

a return to farm use isn’t eligible for abatement

under ORS 308A.089 because abatement requires

limited farming.

3. Immediate disqualification for “no longer in

use.”

A. No evidence of farm use in the entire previous

calendar year; or

B. Anytime during the current assessment year

the assessor has a reason to believe the taxpayer

won’t continue to engage in a qualifying farm

use for the entire current assessment year; or

C. There has been a change of use incompatible

with returning the land to farm use such as res-

idential, commercial, industrial, or other incom-

patible use.

4. Disqualification after one full calendar year of

“no longer in use.”

If the farm use appears to no longer be in a qualify-

ing use but is compatible with continuing farm use

and it is anticipated the taxpayer could appeal or

wants to continue farm use, then the assessor may

want to wait until there is a full calendar year of

non-qualifying farm use before proceeding with

the disqualification. In this case it is recommended

to notify and communicate with the taxpayer and if

the use is questionable give the taxpayer an oppor-

tunity to bring the property into compliance. Flag

the file and then disqualify when there is a full cal-

endar year of non-qualifying farm use or when the

assessor is convinced the farm use will no longer

continue to qualify.

In the event of an appeal, the assessor would then

be able to demonstrate they have worked with

the tax payer and can support the reason for the

disqualification.

Removal of land from an EFU zone

disqualification

Zone changes often occur prior to land use changes

such as the recording of a subdivision plat or the devel-

opment of property for uses other than farm use.

Non-EFU land isn’t required to be disqualified when

there is a zone change, unless the land is changed to an

EFU zone. In the event non-EFU land changes to an EFU

zone, all of the non-EFU accounts will be disqualified

and any land within the new EFU zone that is engaged

in a qualifying farm use practice as specified under

ORS 308A.056 will automatically qualify whether or

not the land was previously specially assessed under a

non-EFU application.

All of the land area that is subject to a removal of an

EFU zone must be disqualified under ORS 308A.113.

Following the disqualification the taxpayers may:

4-6 150-303-422 (Rev. 11-07-22)

1. Change to a different special assessment. Applica-

tions for non-EFU special assessment under ORS

308A.077 will have five years to meet the non-EFU

“use” and “income” requirements as specified in

ORS 308A.724. The “market MAV” isn’t adjusted

when the land changes to a different special assess-

ment as specified in ORS 308.156(4)(b). The “spe-

cially assessed MSAV” will be processed as new

land for the program granting the special assess-

ment. Additional taxes will be deferred under ORS

308A.706(1)(d).

2. If the taxpayer doesn’t or can’t change to a different

special assessment or exemption, the land will be

assessed based on market value and the “market

MAV” will be processed as a Measure 50 excep-

tion under ORS 308.156(4), (5), and (6). Additional

taxes will be deferred under ORS 308A.706(1)(a)

if the land use doesn’t change incompatible with

returning the land to farm use. (See “Additional

tax” section.)

Additional tax considerations will depend on

whether the zone change was initiated by the tax-

payer or a governing body. (See “Additional tax”

section.)

Nonfarm dwelling in exclusive farm use

zone (ORS 215.236) disqualifications

This law only applies to land within an exclusive farm

zone.

ORS 215.236 is a land use approval for the establish-

ment of a nonfarm dwelling within an EFU zone which

meets a specified soil classification [ORS 215.213(3) and

ORS 215.283(3)].

Planning department’s responsibilities:

• Tentative approval for the nonfarm dwelling.

• Final approval after the parcel is disqualified and

additional taxes are paid.

Owner’s responsibilities:

• Notify the assessor the lot or parcel is no longer used

as farmland; and

• Request assessor to disqualify the parcel from any

other special assessments listed in ORS 215.236(4).

Taxpayer must pay additional taxes prior to final

land use approval.

Assessor’s responsibilities:

• Disqualify the lot or parcel from farm use and any

other special assessments listed in ORS 215.236(4).

ORS 215.236(4) requires disqualification from EFU,

designated forestland, small tract forestland, and

open space special assessments. ORS 215.236 (4) does

require disqualification from wildlife habitat (WLH)

special assessment or conservation easement (CE)

special assessment.

• Provide the owner with written notice of the disqual-

ification. (See “Disqualification notification proce-

dures” in the appendix of this manual.)

• Impose additional taxes.

• Advance collection of the additional tax.

• Provide the owner with a statement of the disqualifi-

cation and payment of additional taxes, if any.

The disqualified lot or parcel can requalify for farm

use or other special assessments identified in ORS

215.236(4) upon combining with a contiguous lot or par-

cel as specified in ORS 215.236(5). Combining a contigu-

ous lot or parcel that is also subject to ORS 215.236 isn’t

a qualifying parcel. A “lot line adjustment” is a portion

of a parcel and isn’t a qualifying parcel.

For CE special assessment and for counties that have

WLH special assessment, ORS 215.236(6) allows land

in a lot or parcel disqualified under ORS 215.236(4)

to change to WLH special assessment or CE special

assessment. Upon future disqualification from WLH

special assessment or CE special assessment, the land

in the lot or parcel will once again be subject to the dis-

qualification criteria of ORS 215.236(4) and requalifica-

tion criteria of ORS 215.236(5). (ORS 308A.724)

ORS 215.236(4) doesn’t include WLH or CE as one of the

special assessments to be disqualified. Land already in

WLH special assessment or CE special assessment at

the time the owner informs the assessor of the nonfarm

dwelling application shouldn’t be disqualified.

Department of Consumer and Business Services

responsibilities:

• Responsible for the administration and enforcement

of the state building code.

• May not issue a building permit for the construction

of a nonfarm dwelling without evidence the owner

of the lot or parcel has paid the additional tax, if any,

imposed by the county assessor.

Disqualification of land zoned for urban uses

(ORS 197.754 and 197.756)

On the date the zone for urban uses is established, the

Assessor must no longer qualify any more land under

EFU or non-EFU special assessment. Because this is a

zone change, existing EFU land must be disqualified

under ORS 308A.113 and may be requalified as non-EFU

special assessment under ORS 308A.077. Following the

change in special assessment under ORS 308A.706(1)(d)

as specified in ORS 308A.724 the owners will have five

4-7 150-303-422 (Rev. 11-07-22)

years to meet the use requirements of ORS 308A.068

and income requirements of ORS 308A.071.

Any land that ceases to be used for farm use follow-

ing the date the area is zoned for urban uses may not

requalify for EFU or non-EFU special assessment as

long as the land continues to be zoned for urban uses.

Any land that has statutory requalification special pro-

visions such as ORS 308A.089 non-EFU income dis-

qualifications may requalify if the land was in farm

use special assessment at the time the area was zoned

for urban uses. Disqualified land may not qualify for

farm use special assessment (rollover) from a different

special assessment listed in ORS 308A.706(1)(d) if the

land wasn’t in farm use special assessment at the time

the land was zoned for urban uses.

After the urban use zone is created, any lots or parcels

that are sold in an urban uses zone will be subject to

disqualification from farm use special assessment. A

special provision under ORS 197.756 doesn’t allow dis-

qualification from farm use special assessment if any

lots or parcels are sold to a relative of the owner or to a

lessee conducting farm use defined under ORS 215.203

at the time of sale. Lot line adjustments are not subject

to disqualification. A lot line adjustment isn’t the sale of

a lot or parcel; it is the sale of a portion of a lot or parcel.

(See also “Qualification” section and “Additional tax”

section of this Farm Use Manual).

Taxpayer request disqualifications

EFU land doesn’t have a provision to disqualify land at

the taxpayer’s request.

If the taxpayer request to have EFU land disqualified,

they must discontinue farming the land for profit. It

is recommended to obtain a written request from the

taxpayer stating they no longer intend to use the land

for a qualifying farm use. The land could then be dis-

qualified for “no longer in use” by the assessor and a

notification letter with change in special assessment

options under ORS 308A.718 would be required. If no

change in special assessment occurs, the land will be

assessed based on market value and additional taxes

will be deferred under ORS 308A.706(1)(a).

The “market MAV” will be processed under ORS

308.156(4)(a), (5), and (6). Once the land is disqualified,

the taxpayer can request to pay the additional taxes

under ORS 308A.715. If additional taxes are collected,

there is no statutory provision for a refund in the event

the taxpayer changes their mind. If the land is returned

to a qualifying farm use at any time, the EFU land will

once again qualify. Qualification will occur in the next

or a future assessment year following the assessment

year of disqualification.

Taxpayers in EFU zones that are involved in a nonfarm

dwelling land use approval are not a disqualification at

owner request. Process the disqualification as an estab-

lishment of a nonfarm dwelling under ORS 308A.113.

[See “Nonfarm dwelling in exclusive farm use zone

(ORS 215.236).”]

Non-EFU land may be disqualified at anytime under

ORS 308A.116(1)(a). The taxpayer may notify the asses-

sor to remove the special assessment.

It is recommended the notification by the taxpayer be in

writing. Unlike EFU, the taxpayer may continue to farm

the land for profit. The land will be assessed based on

market value and the “market MAV” will be processed

as a Measure 50 exception under ORS 308.156(4), (5),

and (6). ORS 308A.718(6) specifically doesn’t require

a disqualification notification letter or options to

change to a different special assessment when the

owner requests the disqualification. To requalify, the

owner will need to submit a timely application and

meet farm use qualification requirements following the

provisions of the non-EFU special assessment program

under ORS 308A.077.

If the owner is changing their operation to a differ-

ent special assessment this isn’t an owner request

disqualification. Disqualify for “no longer in use”

as farmland, because the land qualifies for a change

in special assessment, and send the owner an appro-

priate disqualification notification letter as required

by ORS 308A.718. (See “Group C sample letter” of

the “Disqualification notification procedures” in the

appendix.)

Exempt owner disqualifications

“Ownership making land exempt”

disqualifications

As specified in ORS 307.090, all property of the state,

counties, cities, towns, school districts, irrigation dis-

tricts, drainage districts, ports, water districts, housing

authorities, or other public or municipal corporations

are exempt from property tax when used or intended

for corporate purposes are exempt.

As specified in ORS 307.040, all property of the United

States, its agencies, or instrumentalities, is exempt from

property tax to the extent that taxation is forbidden by

law.

ORS 308A.116 (non-EFU) and ORS 308A.430 (wildlife

habitat) special assessments have special provisions for

the sale or transfer of land to an ownership making the

land exempt. Upon discovery, the disqualification and

any additional taxes are calculated and determined

one day preceding the sale or transfer to the ownership

making the land exempt as specified in ORS 308A.703.

There is no timeline for the discovery.

4-8 150-303-422 (Rev. 11-07-22)

Note: As specified in ORS 308A.709, forestland acquired

by a federal, state, or local governmental agency has

been specifically eliminated from the additional tax

provisions of ORS 308A.703(5).

If the exempt ownership continues agricultural prac-

tices or grazing uses by leasing or renting the land to

a taxable owner for cash or crop share, then continue

farm use special assessment as specified in ORS 307.110.

Upon termination of the lease or rental agreement, the

land will become disqualified and no additional tax is

collectable as required by ORS 308A.709(2)(a).

Because the land goes from specially assessed to

exempt status, the Measure 50 “market MAV” isn’t cal-

culated as specified by ORS 308.156(4)(b).

ORS 308A.718(6)(b) doesn’t require a disqualification

notification letter for this type of disqualification.

“Exempt by application” disqualifications

The special provision for exempt ownership doesn’t

apply to owners that are exempt by application (insti-

tutional, religious, fraternal, interment properties, etc.).

Owners that are exempt by application are otherwise

taxable owners that receive the exemption by submit-

ting a qualifying application. When the exemption is

approved, the land will change use incompatible with

returning the land to a farm use. Process the disquali-

fication for “no longer in use” the same as any other

taxpayer.

If not all of the land in a parcel is going to be under the

exempt application, it may continue to qualify for spe-

cial assessment the same as any other taxpayer. If the

owner doesn’t continue special assessment on any non-

exempt portion, then disqualify the land for “no longer

in use” and follow disqualification timing require-

ments and procedures the same as any other taxpayer.

The “market MAV” for any land that is going from

special assessment to exemption may not be processed

as an exception under ORS 308.156(4)(a), (5), and (6) as

specified in ORS 308.156(4)(b). Process the “exemption

MSAV” as an exception under the provisions of the

exemption program, if applicable.

An application for exemption will be a change of use

to a use incompatible with returning the land to a farm

use. Disqualify either EFU or non-EFU land for “no

longer in use.”

(See “Disqualification notification procedures” in the

appendix of this manual).

Non-EFU income disqualification

Land that initially qualifies for non-EFU special

assessment must prove that each acre under applica-

tion qualifies for “farm use” under ORS 308A.056. Once

“farm use” is established, the non-EFU land identified

in the application will be tested to meet the required

minimum gross income test of ORS 308A.071. The land

not exceeding one acre used for the homesite and any

acres qualified under ORS 308A.056(3) current employ-

ment, are not be included as acres that are income

tested as specified in ORS 308A.071(2)(b). Each income

tested acre must be used to produce gross income from

the sale of farm products or services, however, the

income from the entire farm unit can be used to qual-

ify the land being tested. The farm unit is all the land

in a farming enterprise which includes all the parcels

farmed by a single operator, whether the operator owns

or leases the farmland, OAR 150-308-1010.

(See “Qualification” section for additional information.)

Each year after the initial qualification for non-EFU

special assessment, the land must continue to main-

tain the minimum gross income requirements of ORS

308A.071. Additionally, each acre must remain in a qual-

ifying farm use. Any acreage should be considered for

disqualification in any year the land fails to maintain

either “farm use” under ORS 308A.056 or “minimum

gross income requirements” under ORS 308A.071.

(See “Disqualification timing—special provision for

“no longer in use.”)

To maintain compliance with ORS 308A.071, the asses-

sor is required under OAR 150-308-1050 to mail a “gross

income questionnaire” on or before March 1 of each

assessment year. Because the income test is a 3 of 5 year

test, a questionnaire should be mailed out at least every

third year to assure compliance with ORS 308A.071.

Accounts that demonstrate a need for more frequent

testing should be flagged and sent a gross income ques-

tionnaire as needed to assure compliance.

Following the March 1 mailing, the taxpayer has until

April 15 of the assessment year to return the gross

income questionnaire. The returned gross income

questionnaire needs to be reviewed for both “use” and

“gross income requirements.”

Any acres that don’t meet “farm use” requirements in

the previous calendar year may be subject to disquali-

fication. Any acres not meeting farm use requirements

in years prior to the previous calendar year can’t be dis-

qualified for no longer in use, however, will be counted

as one year of non-qualifying income for the 3 of 5 year

income test.

Upon review of the “gross income questionnaire” any

acres that don’t meet the 3 of 5 year “required mini-

mum gross income” test may be subject to disqualifica-

tion. Failure to return the gross income questionnaire

doesn’t result in a disqualification. In either case, send

the taxpayer a letter of intent to disqualify (commonly

called a show cause letter). The taxpayer has 30 days

4-9 150-303-422 (Rev. 11-07-22)

from date of the show cause letter of intent to come into

the office or demonstrate to the assessor why the land

should continue to qualify. The last day to send the

disqualification notification letter required under ORS

308A.718 is August 14, so the intent to disqualify letter

must precede the August 14 deadline, by more than 30

days. Otherwise, the taxpayer won’t have received a full

30 days to show cause as specified in OAR 150-308-1050.

During the 30 day show cause period, the taxpayer

must provide sufficient farm use income or informa-

tion to avoid disqualification.

Note: Sometimes the required minimum gross income

amount may need to be adjusted from one year to the

next, such as, land that qualifies for current employ-

ment under ORS 308A.056(3) won’t be included in the

income requirement. Such as, land that has been con-

verted to immature perennials, water impoundments

are developed, or the land qualifies for a farm related

government program.

Disqualify any acres not in compliance if the taxpayer

doesn’t respond within the 30 day show cause period,

or fails to provide sufficient farm use income at the

show cause hearing.

An ORS 308A.116 non-EFU disqualification for “no

longer in use for failure to meet income requirements

under ORS 308A.071” has the following options:

1. Requalification. Following the disqualification

ORS 308A.089 allows the owner to submit a new

application and requalify for non-EFU special

assessment by December 15 of the first year in

which the disqualification is in effect. The applica-

tion must meet all of the use and income require-

ments the same as any other property qualifying

for non-EFU special assessment. The taxpayer must

also pay a requalification fee and submit a signed

affidavit that the statements for the requalifica-

tion are true. If the taxpayer requalifies under ORS

308A.089, then the non-EFU special assessment will

requalify for the current assessment and tax year.

The old application remains disqualified and the

special assessment is based on the new application.

The “market MAV” is processed as an Measure

50 exception under ORS 308.156(4)(a), (5), and (6)

because the land isn’t a change to a different special

assessment. Process the “specially assessed MSAV”

as newly qualified land under ORS 308A.107(6). The

assessment and tax rolls will be corrected under

ORS 311.205

2. Changing to a different special assessment.

The disqualification notification letter under

ORS 308A.718 will require the owner be given an

option to change to a different special assessment.

Additional taxes will be deferred for the change

in special assessment. The additional taxes can’t

be abated under ORS 308A.119 because the land

isn’t going to be assessed based on market value

under ORS 308.146. Process the “specially assessed

MSAV” as newly qualified land under the program

granting the special assessment.

3. Abatement of additional taxes. To qualify for

abatement under ORS 308A.119, the disqualified

non-EFU land is assessed based on market value

under ORS 308.146 or as otherwise provided by

law without regard to any special assessment laws

and “limited farm use” continues without a break

in farm use. The “market MAV” is processed as an

Measure 50 exception under ORS 308.156(4)(a), (5),

and (6). (See “Additional tax” section).

4. Discontinue farm use. If the taxpayer discontinues

farm use and can’t or doesn’t change to a different

special assessment, the additional taxes will be

deferred under ORS 308A.706(1)(a). The land will

be assessed under ORS 308.146 based on market

value or as otherwise provided by law. The “mar-

ket MAV” is processed as an Measure 50 exception

under ORS 308.156(4)(a), (5), and (6).

Subdivision disqualifications

EFU subdivisions and homesites: To create a subdivi-

sion on EFU land usually requires a zone change. In

the event of a zone change, see “Disqualification for

‘removal of land from an EFU zone.’”

Sometimes more intensive land uses are allowed in

an EFU zone such as a “destination resort” overlay. If

a “destination resort” overlay doesn’t change the EFU

zone status and the land continues to qualifying for

farm use, then ORS 308A.113 doesn’t have a provision

to disqualify land partitions or subdivisions.

In 2005, legislative changes were implemented to

accommodate 2004 voter land use reform Measure 37.

Under the provisions of law, most Measure 37 claims

are being processed as a waiver to an EFU zone. This

EFU zone waiver allows an owner to subdivide the land

under a Measure 37 claim without changing the status

of the EFU zone. If the subdivision is allowed to remain

EFU, as the result of a Measure 37 waiver, then ORS

308A.113 doesn’t have a provision to disqualify land for

the recording of a subdivision plat in an EFU zone.

If the conditions of a Measure 37 claim, changes the

zoning from EFU to a zone other than EFU, then pro-

cess a disqualification for “removal of land from an

EFU zone.”

Land involved in a “destination resort” or a “Measure

37 claim” that remains EFU will continue to be specially

assessed under farm use until the land is disqualified

under ORS 308A.113 for:

4-10 150-303-422 (Rev. 11-07-22)

• “No longer in use”; or

• “Establishing a nonfarm dwelling on the land under

ORS 215.236.”

Disqualifications for the establishment of a nonfarm

dwelling under ORS 215.236 will depend on whether

the acquired ownership associated with a Measure 37

claim occurred prior to ORS 215.236 becoming law. It is

recommended to contact the local planning department

to determine whether the subdivision or land parti-

tions will be subject to nonfarm dwelling requirements

under ORS 215.236 in either a “destination resort” or a

“Measure 37 claim.”

Upon the recording of a subdivision plat or partition-

ing land (including a destination resort), the account

must be processed as a “market MAV” exception under

ORS 308.156(1).

Prior to development of an EFU subdivision or destina-

tion resort, if farm use discontinues and the land lays

idle or otherwise is used compatible with returning the

land to farm use, the land will be disqualified for “no

longer in use” and the additional taxes are deferred

under ORS 308A.706(1)(a) until the land changes use

incompatible with returning to farm use. Any unde-

veloped land may requalify at any time farm use

continues.

As a subdivision or destination resort is developed, any

land that is currently in special assessment will be dis-

qualified for “no longer in use” when any soil is dis-

turbed for streets, roads, utility services, or commercial

uses. These generally are a change of use incompatible

with returning the land to a farm use and additional

taxes can’t be deferred under ORS 308A.706(1)(a). The

land will be assessed based on market value and the

“market MAV” will also be processed under ORS

308.156(4)(a), (5), and (6). (See “Additional tax” section.)

The MSAV for any existing specially assessed home-

sites won’t be recalculated because EFU land doesn’t

have a provision to disqualify when subdividing or

partitioning. When a subdivision or partition occurs,

only the “marked related MAV” is calculated under

ORS 308A.256(1). A newly qualifying homesite MSAV

for undeveloped lots or parcels may be calculated

under ORS 308A.256(6) for the first tax year the newly

developed homesites are created.

As EFU parcels and lots within the subdivision or des-

tination resort are developed for new residential home-

sites, the disqualification for any land that is in current

farm use special assessment will depend on the farm

use capability of each individual lot or parcel on the

date the soil is disturbed for a change to a residential

homesite. EFU parcels or lots that are large enough to

have acreage in excess of the homesite area are still EFU

land that may qualify for EFU special assessment. By

statute, disqualification of the homesite area (approxi-

mately one acre) will depend on whether:

1. The homesite is used in conjunction with a quali-

fying farm use.

If the EFU land is currently under EFU special

assessment, disqualify the land area being used for

the homesite (approximately one acre) from special

assessment for “no longer in use” and requalify the

land for EFU homesite special assessment under

ORS 308A.253. The “market MAV” isn’t calculated

because the land is going from one special assess-

ment to another as specified in ORS 308.156(4)(b).

See Douglas County v. DOR No. 3167 June 11, 1992

cross motion for summary judgement. Process

the newly qualified “homesite MSAV” under ORS

308A.256(6).

2. The homesite isn’t used in conjunction with a

qualifying farm use.

If the EFU land is currently under EFU special

assessment, disqualify the land from special

assessment for “no longer in use” and assess the

non-qualifying homesite at market value under

308.146 and 308.205. Additional taxes are not col-

lectable for the farmland developed for a residen-

tial homesite if the homesite is compatible with

farm use. The remaining acres are deferred under

ORS 308A.706(1)(a) because the land and homesite

is zoned EFU and can be returned at anytime in the

future to a qualifying use. The “market MAV” for

the disqualified farmland converted to a homesite

and any disqualified remaining acres is processed

under ORS 308.156(4)(a), (5), and (6) because the

land will be assessed based on market value.

3. The homesite is a “change of use” to a residential

use.

• A lot or parcel of approximately one acre in size

that is entirely improved with landscaping and

other onsite developments associated with a

residential homesite and no excess land capable

of qualifying for farm use special assessment is

disqualified for “no longer in use” under ORS

308A.113. Additional taxes are not eligible for

deferral under ORS 308A.706(1(a) for the resi-

dential change of use. Collect additional taxes

as required under ORS 308A.703.

• The homesite lot or parcel is disqualified under

ORS 308A.259 for establishing a nonfarm dwell-

ing pursuant to ORS 215.236. Additional taxes

are collectable as specified in ORS 215.236.

• Lots or parcels in an EFU “subdivision” or “des-

tination resort” that have restrictions that don’t

allow farming are disqualified for “no longer

in use” under ORS 308A.113. Additional taxes

4-11 150-303-422 (Rev. 11-07-22)

can’t be deferred under ORS 308A.706(1(a) for

the residential change of use. Collect additional

taxes as required under ORS 308A.703.

Non-EFU subdivisions and homesites: When a subdi-

vision plat is recorded on land that is specially assessed

as non-EFU farmland, disqualify the land area in the

subdivision for “recording of a subdivision plat” under

ORS 308A.116. Wildlife habitat, designated forestland,

and small tract forestland special assessments have

similar statutory requirements for the recording of a

subdivision plat involving those special assessments.

Often counties coordinate with the planning depart-

ment so the additional taxes are collected simultaneous

on the same day of the subdivision plat recording.

If the tax and assessment rolls are changed for a sub-

division disqualification prior to July 1 of the assess-

ment year the additional taxes will be collected for the

current tax year and imposed for the current general

tax roll.

Example: If the assessor changes the assessment and

tax rolls between January 1, 2007 and June 30, 2007 the

disqualification will be effective for the 2007–08 tax

roll. The additional taxes can be estimated and pre-

collected for the current general tax roll. The additional

taxes are required to be paid under ORS 308A.116 for

this disqualification. After paying the additional taxes,

the land may requalify for non-EFU special assessment

in the current 2007–08 tax year if the taxpayer can meet

the subdivision requalification criteria specified in

ORS 308A.116. If the disqualification occurs more than

30 days prior to April 1 of the current assessment year.

the taxpayer will have until April 1 to requalify of as

specified in ORS 308A.077.

If the date of the disqualification notice is beyond the

April 1 application period, ORS 308A.724(3) allows the

taxpayer 30 days from the date of the disqualification

notice to reapply for non-EFU special assessment. The

old application is disqualified and since the land didn’t

change to a different special assessment the “market

MAV” exception for the subdivided land area is pro-

cessed under either ORS 308.156(1) or 308.156(4)(a). For

any land that meets the requalification requirements of

ORS 308A.116, process the “specially assessed MSAV”

for the account as newly qualified land under ORS

308A.107(6).

If the tax and assessment rolls are changed for a sub-

division disqualification July 1 or after of the assess-

ment year, the land will remain in special assessment

and the additional taxes will be collected for the next

tax year and imposed for the next years general tax roll.

Example: If the assessor changes the assessment

and tax rolls on or after July 1, 2007 as specified in

ORS 308A.068, the land remains in non-EFU special

assessment for the current 2007–08 tax year and the

disqualification becomes effective July 1, 2007 and the

assessed value is changed for the next tax year 2008–09.

If additional taxes are pre-collected they must be esti-

mated and collected for the 2008–09 tax year general

roll. The additional taxes are required to be paid under

ORS 308A.116 for this disqualification. After paying

the additional taxes the land may requalify for non-

EFU special assessment in the 2008–09 tax year if it can

meet the subdivision requalification criteria specified

in ORS 308A.116. Under ORS 308A.077, the taxpayer has

until April 1 of the next assessment year to submit a

new application for non-EFU special assessment. The

old application is disqualified and the “market MAV”

exception for the subdivided land area is processed

under either ORS 308.156(1) or 308A.156(4)(a). Process

the “specially assessed MSAV” on the account for any

land that newly qualifies for farm use special assess-

ment under ORS 308A.107(6). All MAV calculations are

processed for a change in assessment occurring in the

next tax year 2008–09. The notification letter to the

taxpayer under ORS 308A.718 must appropriately use

the correct tax year (2008–09) for the change in assess-

ment and additional tax calculations, otherwise the

notification letter may be considered invalid in the

event of a tax court appeal.

Partitioning: The provisions of a subdivision disquali-

fication don’t apply to land partitions for either EFU or

non-EFU farmland. A land partition is a division of a

legal lot or parcel into two or three parcels in a calen-

dar year. A land partition will require processing the

account for a Measure 50 MAV exception under ORS

308.156(1).

Homesite disqualifications

Establishing a homesite on land that is currently under

a special assessment program, the land first must be

disqualified for “no longer in use” from the special

assessment program the homesite is being located on. If

the homesite qualifies for homesite special assessment

under ORS 308A.253, it will be processed as a newly

qualified “homesite MSAV” Measure 50 exception

under the provisions granting the new special assess-

ment as specified in ORS 308.156 (4)(b). If the land use

change doesn’t qualify for homesite special assessment,

the disqualification will be assessed based on market

value under ORS 308.146 and 308.205 and the “market

MAV” will be calculated as a Measure 50 exception

under ORS 308.156(4)(a), (5), and (6).

Existing specially assessed farm homesites can be

disqualified at anytime the assessor discovers the

homesite isn’t being used in conjunction with farm use

and is used for a nonfarm purpose as specified in ORS

308A.259. Homesites that are rented out to someone not

involved in farm use activities don’t qualify and should

be disqualified. A homesite used only a few times a year

4-12 150-303-422 (Rev. 11-07-22)

for farm use activities and then sets vacant the remain-

ing time is considered to be used in conjunction with

the farmland. Vacant homesites generally only apply to

EFU zones unless the owner of non-EFU land can qual-

ify the homesite by application under ORS 308A.253.

Existing specially assessed farm homesites that are

vacant shall continue to qualify for special assessment

as long as the homesite remains habitable. Land under

homesites that are no longer habitable may be assessed

as a farm related storage building if used as part of the

farm operation. As specified in ORS 308A.056(3), land

under a farm related building shall be assessed at farm

use values under ORS 308A.107.

As specified in ORS 308A.259, additional taxes are not

collectable for an existing specially assessed home-

site that is disqualified, unless the existing homesite

is involved in a nonfarm dwelling land use approval

partition under ORS 215.236.

Homesites special assessments are separate programs

from land use special assessments. Either the establish-

ment or disqualification of a homesite won’t affect any

remaining qualifying portion of a lot or parcel from

continuing to qualify for farm use or any other special

assessment. However, a farm homesite won’t qualify

for farm homesite special assessment unless it is used

in conjunction with qualifying farm use land that is

currently under farm use special assessment.

Specially assessed land and homesites involved in

subdivisions or EFU overlays require special process-

ing. See “Subdivision and homesite disqualifications”

for additional information.

Nonfarm dwellings in EFU zones require special pro-

cessing. See “Nonfarm dwelling in exclusive farm use

zone (ORS 215.236) disqualifications.”

Government exchange of land

A government exchange occurs when a taxable owner

exchanges specially assessed land for land that is held

by an exempt government body. The exchange must be

of approximate equal value.

ORS 308A.730 requires a taxpayer to submit a timely

application following the exchange of land with a gov-

ernment agency. With a qualifying application, addi-

tional taxes are deferred under ORS 308A.706. Failure

to meet the following application timelines will result

in a disqualification and additional taxes under ORS

308A.703:

1. If the exchange takes place prior to July 1, the owner

shall file the application on or before August 1.

2. If the exchange takes place on or after July 1, the

owner shall file the application on or before April 1

of the following year.

(See “Disqualification notification procedures” in the

appendix of this manual for processing the exchange.)

Processing the Measure 50 MAV will depend on

whether the taxable owner qualifies their acquired

land for special assessment.

1. If the land owner doesn’t or can’t qualify for a

change to a different special assessment, the land

will be assessed based on market value and the

“market MAV” will be processed as an exception

under ORS 308.156(4)(a), (5), and (6).

2. If the land owner successfully meets the applica-

tion requirements and timelines for a change to

a different special assessment, the tax account

acquired by the taxable owner will be processed

as a “specially assessed MSAV” Measure 50 excep-

tion under the provisions granting the new spe-

cial assessment as specified in ORS 308.156 (4)(b).

If the land qualifies for the exchange, there are spe-

cific additional tax instructions that must be fol-

lowed. (See “Additional tax” section.)

Conservation management effect on

disqualification (ORS 308A.743)

The existence of a recorded conservation easement or

deed restriction on land specially assessed for farm use

won’t cause a disqualification, unless the terms of the

conservation easement or deed restriction prevent the

land from continuing to qualify for special assessment.

If the conservation easement or deed restrictions pre-

vents the land from being able to meet special assess-

ment qualification requirements, the land should be

disqualified for “no longer in use” under ORS 308A.113

(EFU), 308A.116 (non-EFU), or any other special assess-

ment unable to continue qualification under the terms

of the easement.

A conservation easement or deed restriction that

doesn’t interfere with the land continuing to qualify for

special assessment may co-exist on the same land.

Disqualification notification letter

There are specific statutory requirements under ORS

308A.718 regarding the information that must be sent

to a taxpayer when land is disqualified from special

assessment.

See “Disqualification notification procedures” in the

appendix section of this manual.

The disqualification notification procedures in the

appendix address disqualifications from all special

assessments relating to forestland, farm use, conserva-

tion easement, and wildlife habitat special assessment

4-13 150-303-422 (Rev. 11-07-22)

programs. The notification procedures include sample

letters that demonstrate statutory requirements and

suggested language to use in the notification process.

The disqualification notification letter required by ORS

308A.718 must:

• Have a valid date of disqualification (see “Effective

date of disqualification”);

• Be sent to the taxpayer within 30 days after the date

the land is disqualified;

• Be in writing;

• State the subject property has been disqualified from

special assessment;

• State the reason for disqualification;

• State that the property will be assessed under ORS

308.156;

• State the amount of additional tax liability that will

be imposed or if the land isn’t used for another use

the amount of potential additional tax liability [ORS

308A.706 (1)].

• Summarize options and have provisions to change

(rollover) into another special assessment, if applica-

ble, under ORS 308A.706(1)(d) or ORS 308A.727 (open

space) as specified in ORS 308A.724;

• Provide a statement of appeal rights within 90 days of

date of disqualification.

No disqualification notice under ORS 308A.718 is

required if the disqualification is:

• At the property owner’s request; or

• For acquisitions by government or tax exempt entities

identified under ORS 307.040 or 307.090.

Note: If the acquisition is by a taxpayer that must

submit an application to receive tax exemption, upon

approval of the exemption, send the taxpayer a dis-

qualification notification letter under ORS 308A.718

for an incompatible “no longer in use” change of

assessment the same as any other taxpayer that dis-

continues farm use special assessment.

Appeals—Magistrate Division

An applicant may appeal a disqualification to the Mag-

istrate Division of the Oregon Tax Court. A complaint

filed with the Magistrate Division requires a filing fee.

The appeal must be filed within 90 days of the knowl-

edge of the disqualification, but not later than one year

after the act. More information can be found in ORS

305.275, 305.280, 305.404 to 305.560, and 308A.718.

Complaints to the Magistrate Division should be mailed

or delivered to the following addresses.

By mail:

Oregon Tax Court

Magistrate Division

1163 State Street

Salem OR 97301

In person:

Clerk, Oregon Tax Court

Magistrate Division

1241 State Street NE

Salem OR 97301

Decisions of the Magistrate Division may be appealed

to the Regular Division of the Oregon Tax Court within

60 days after the date of the decision.

5-1 150-303-422 (Rev. 11-07-22)

1. General information

Special assessment programs are in place to recognize

that farm and forest properties are environmentally

and economically beneficial to Oregon. When property

is specially assessed, the owner pays reduced property

taxes if they manage their land under the guidelines

of the special assessment program. If a property ceases

to meet the qualifications of special assessment, it is

disqualified from the program. Each year that land is

specially assessed a “potential additional tax liability”

accrues to the land. The potential tax will only be an

actual tax if a collection is required, and won’t necessar-

ily include each year a potential additional tax existed.

The additional tax laws and procedures are similar on

farm and forest properties. This chapter will focus on

the provisions as they relate to farmland special assess-

ments. For forestland-related procedures, refer to For-

estland Assessment Procedures, 150-303-424.

Specially assessed homesites generally don’t have pro-

visions to collect additional taxes.

Additional tax only applies to the years the land was

specially assessed [ORS 308A.703(4)]. Any years when

the additional tax has already been collected or abated

can’t be collected again. Additional tax can’t be col-

lected for any year the land wasn’t specially assessed

(exempt or assessed at market value) or wasn’t collect-

ible under ORS 308A.709.

1A. Overview of statutes

Additional tax statutes ORS 308A.700–733 apply to the

following special assessments:

1. Exclusive farm use (EFU).

2. Non-exclusive farm use (non-EFU; all zones other

than EFU).

3. Western Oregon designated forestland.

4. Eastern Oregon designated forestland.

5. Small tract forestland (STF Option).

6. Wildlife habitat (WLH).

7. Conservation easement (CE) special assessment.

There are five basic scenarios regarding additional tax

that will be addressed in this section:

1. The additional tax could be imposed and collect-

able following disqualification from special assess-

ment. ORS 308A.703 is the statute that addresses

the additional tax upon the land’s disqualification

from special assessment from items 1A 1-4, 6, and 7.

ORS 308A.707 addresses additional taxes when

land is disqualified from Small tract forestland

(STF Option).

2. The additional tax could be deferred upon disqual-

ification. This means that the potential tax remains

on the property, but the tax isn’t collected, the tax

collection is deferred. ORS 308A.706 lists circum-

stances when the additional taxes will be deferred

upon disqualification from one of the special

assessments listed in 1A 1-4, 6, and 7. There is no

deferral of taxes upon disqualification of item 1A

5–Small Tract forestland (STF Option).

3. There are situations where the additional tax isn’t

deferred or collected upon disqualification. ORS

308A.709 lists the circumstances when additional

taxes are not imposed.

4. Any additional tax that had been deferred under

ORS 308A.706 may later become imposed or col-

lectable. ORS 308A.712 explains the situations and

process for collecting additional taxes that had pre-

viously been deferred under ORS 308A.706.

1B. Additional tax versus disqualification

Don’t mix “additional tax” definitions and procedures

with “disqualification” definitions and procedures.

They are separate statutes and separate processes.

First there is a disqualification, and then consider

whether or not to collect the additional tax. Not all dis-

qualifications result in an additional tax. Sometimes

the additional tax will be collected many years after the

disqualification. It is important to keep the “potential

additional tax” (PAT) notation on the assessment and

tax roll. If in doubt, don’t remove the notation from the

roll.

An entire account may be disqualified and only por-

tions require an additional tax computation. The other

portions may have no additional tax or the additional

tax is deferred. Careful review is needed of all uses,

all acres, and reasons for disqualification separately.

Some portions may be affected differently than other

portions.

2. Additional tax upon disqualification

ORS 308A.703 addresses imposition of additional taxes

upon disqualification from items 1A 1-4, 6, and 7 from

special assessments. ORS 308A.707 addresses imposi-

tion of additional taxes upon disqualification of special

assessments specifically for item 5–Small Tract Forest-

land (STF Option).

Additional tax

5-2 150-303-422 (Rev. 11-07-22)

Before deciding to collect, determine whether the addi-

tional taxes are collectable. Review the account history to

make sure that any prior year’s additional taxes haven’t

been previously collected, deferred under ORS 308A.706,

cancelled under ORS 308A.709, or abated under ORS

308A.119 (applies to non-EFU special assessment only). If

the additional taxes are in a deferred status under ORS

308A.706, you must follow ORS 308A.712 to process the

additional tax for those years.

If neither ORS 308A.706 (deferred), 308A.709 (no addi-

tional tax), or 308A.119 (abatement) apply, then the addi-

tional taxes are processed under ORS 308A.703.

Following disqualification, the additional tax imposed

will be added to the next assessment and tax roll to be

collected like other property taxes.

Land in an area zoned “urban uses” as specified in

ORS 197.754 and 197.756 shall not be subject to addi-

tional taxes under ORS 308A.700 to 308A.733 if the land

ceases to be used for farm use within the five years fol-

lowing the date the area is zoned for urban uses. After

the five year time period any land disqualified from

farm use special assessment will be subject to addi-

tional taxes as specified in ORS 308A.700 to 308A.733.

2A. Calculation of taxes

OAR 150-308-1500 describes the additional tax calcu-

lation. The additional tax shall equal the difference

between the taxes assessed against the land and the

taxes that would have otherwise been assessed against

the land had the land not been specially assessed. This

calculation is performed for each year for the total

number of years listed in 2B below.

Example: A property was under special assessment

in 2005, and the property tax was $2,000 for the year.

It would have otherwise been taxed at $10,000. The

taxpayer gets credit for the $2,000 and will have the

“potential” to pay an additional tax of $8,000 for that

year to make up the difference.

2B. Maximum years

The number of years for which the additional taxes are

calculated shall be the lesser of the number of years the

land was under the special assessment, or:

Five years in the case of:

a. Non-EFU farmland.

b. Western Oregon designated forestland (see Forest-

land Manual for STF).

c. Eastern Oregon designated forestland (see Forest-

land Manual for STF).

d. EFU farmland where land remains inside an urban

growth boundary.

e. Wildlife habitat where land remains inside an

urban growth boundary.

Ten years in the case of:

a. EFU farmland where land remains outside an

urban growth boundary.

b. Wildlife habitat where land remains outside an

urban growth boundary.

c. Small tract forestland (see Forestland Manual for

STF).

If a property wasn’t in special assessment long enough

to reach the maximum years, you can only collect the

tax for the number of years the property was in special

assessment.

See Appendix F for “Additional tax diagram.”

2C. Owner request

ORS 308A.715 allows the owner of land that is disquali-

fied from special assessment to request to pay the addi-

tional taxes, even if the taxes may be deferred under

ORS 308A.706. This generally happens when an owner

doesn’t want the land to be encumbered, or they are in

a loan transaction and either the lender or buyer wants

to clear the title of the property.

The owner must make written request to the assessor

to request to pay the additional taxes. If the request is

made prior to August 15 of the assessment year, the

additional taxes are added to the current tax roll. If the

request is made on or after August 15, the taxes will be

added to the next year’s roll.

Once an owner makes the request and pays the taxes,

they can’t “change their mind” and request a refund.

However, land may re-qualify for special assessment

with a timely application.

3. Additional tax deferred

3A. Statutes

There are circumstances where the additional tax upon

disqualification is deferred. ORS 308A.706 lists the cir-

cumstances, and ORS 308A.712 explains how to deter-

mine the amount of deferred additional taxes once

they become due for each scenario. The following table

shows the circumstance and corresponding additional

tax statute for farmland special assessments.

3B. Change to other special assessment

The most common reason for deferring the additional

taxes upon disqualification of farmland is that land

qualifies for another special assessment under ORS

308A.706(1)(d). This statute is commonly referred to as

the “roll over” statute because it allows an owner to

5-3 150-303-422 (Rev. 11-07-22)

defer or “roll over” the additional taxes when they go

to another special assessment.

It is important to maintain the “potential additional tax”

notation on the assessment roll in this circumstance.

3C. Government exchange

Under ORS 308A.730, a taxable owner with land under

farm or forestland special assessment may apply for

land coming from the government to qualify for special

assessment, EFU farm use doesn’t require an applica-

tion, simultaneously in the transfer if the land exchange

is of approximately equal value.

The wildlife habitat and conservation easement spe-

cial assessments are not listed as special assessments

that are included in this application process under

ORS 308A.730. However, the collection statute ORS

308A.712(3), isn’t restrictive of which special assess-

ments the collection may occur, which gives latitude to

the assessor if this should be the case. The land going to

the government and the land coming from the govern-

ment in the exchange should be under the same special

assessment since a “rollover” would also need to occur

to change from one special assessment to another. The

qualification requirements for WLH and CE require

significant lead time to make a successful application

by their respective due dates. A successful application

will result in no gap in special assessment for which

a PAT exists. Failure to make a successful application

will result in the assessor requiring proof that the PAT

is paid before the deed of transfer may be recorded by

the clerk.

In this situation, the additional taxes on the land

that was specially assessed is transferred to the land

acquired by the taxable owner. These additional taxes

are deferred on the taxable owner’s acquired land.

However, upon any future disqualification, the addi-

tional taxes will begin with the last year the land was

under special assessment, up to the maximum num-

ber of years allowed, as listed in 2B of this section. To

reach the maximum number of years, you may need to

include some of the years the owner’s original land was

under special assessment.

3d. Additional taxes following deferral

If the potential additional taxes were deferred follow-

ing disqualification under ORS 308A.706, and later

become collectable, the additional taxes, and maximum

years of collection are determined under ORS 308A.712.

3D1. Maximum years

The number of years of additional tax computation

shall be the total number of continuous tax years that

farmland special assessment was in effect for the land,

not to exceed:

a. Five years; or

b. Ten years if the property had been previously dis-

qualified from EFU farm use or wildlife habitat

located in an EFU zone outside the urban growth

bou ndar y.

3D2. Calculating the tax

To identify the number of years to collect, determine

the following:

1. Total number of years land was under special

assessment.

2. If the land had been previously disqualified from

either farm use or wildlife habitat on land that is

outside the urban growth boundary and in an EFU

zone.

a. If no, the number of years you calculate the tax

on is the lesser of the number of years in special

assessment or five years.

b. If yes, the number of years you calculate the tax

on is the lesser of the number of years in special

assessment or 10 years.

For the special assessments listed below, the number

of years that may be taken into consideration for the

purposes of the additional tax calculation is five years.

Farm Use in an EFU zone inside UGB (ORS 308A.062)

Farm Use in non-EFU zone (ORS 308A.068)

Designated Forestland western Oregon (ORS 321.358)

Designated Forestland eastern Oregon (ORS 321.839)

Wildlife Habitat inside UGB (ORS 308A.424)

5-4 150-303-422 (Rev. 11-07-22)

Example 1: Farm land was under non-EFU from 1996 through 2000. The owner let the land lay idle so the land was

assessed based on market value, and the additional taxes were deferred under ORS 308A.706(1)(a). In 2004, the

owner qualified the land for wildlife habitat special assessment. In 2006, the owner changed the use incompatible

with returning the land to special assessment. Additional taxes are to be collected under ORS 308A.703 for the two

years the land was in WLH, and the additional taxes deferred in 2001 are to be collected under ORS 308A.712(2).

ORS 308A.712 requires the number of years to be collected shall be the total number of years (whether or not con-

tinuous) that the farm use was in effect for the land not to exceed five years for non-EFU land and the EFU land

inside the urban growth boundary, and 10 years for EFU land outside the UGB.

In this example, three years of additional taxes, 1998–99 through 2000–01, can be collected because the number of

years to be collected can’t exceed five years for non-EFU land.

Tax year

2006–07

2005–06

2004–05

2003–04

2002–03

2001–02

2000–01

1999–00

1998–99

1997–98

1996–97

Special

assessment

program

WLH

Based on

<—Non-EFU—>

Years to

compute

add tax

x x x x x

Additional tax statutes

Reason for deferral Statute Additional taxes Statute

EFU or non-EFU land isn’t being

used as farmland and isn’t being

used for an industrial, commercial,

residential or other use that is

incompatible with returning the

land to farm use.

308A.706(1)(a) Additional taxes imposed at the time land

use changes to a use incompatible with

returning the land to farm use.

308A.712(2)

Governmental exchange of land of

approximate equal value.

308A.706(1)(b)

Calculate additional tax on taxable owner’s

original land. Transfer the tax amount to

the account of the acquired land.

308A.712(3)

Land acquired and used for natural

heritage purposes.

308A.706(1)(c) Additional taxes imposed at time land no

longer used as natural heritage per ORS

308A.706(1)(c)

308A.712(4)

Land qualifies for another special

assessment.

308A.706(1)(d)

Additional tax may be imposed at time of

disqualification from special assessment, if

collectable.

308A.712(5)

Non-EFU farmland fails to meet

the income requirements of ORS

308A.071.

308A.706(1)(e)

Additional taxes are abated for each year of

limited farm use. Unabated years remain a

potential additional tax.

308A.119

5-5 150-303-422 (Rev. 11-07-22)

Example 2: Land was under non-EFU special assessment from 1996 through 2004, inside the UGB. In 2005, the owner

rolled the land over to wildlife habitat special assessment. In 2006, land was disqualified from special assessment

for an incompatible change of use. The maximum number of years for additional tax calculation is five years. Cal-

culate the difference between the tax paid under special assessment and the tax that would have otherwise have

been paid for each tax year 2001–02 through 2005–06.

Tax year

2006–07

2005–06

2004–05

2003–04

2002–03

2001–02

2000–01

1999–00

1998–99

1997–98

1996–97

Special

assessment

program

WLH

<—Non-EFU—>

Years to

compute

add tax

x x x x x

Example 3: Land was under EFU assessment from 1996 through 2000 and land was outside the urban growth

boundary. The owner decided to roll over into designated forestland (DFL) in 2001–02 and remained under DFL

through 2005–06. Because land was disqualified from EFU outside the urban growth boundary within the last

10 years, and the land has been continuously in special assessment, there is a 10-year look back. Additional tax is

computed on each tax year from 1996–1997 through 2005–2006.

Tax year

2006–07

2005–06

2004–05

2003–04

2002–03

2001–02

2000–01

1999–00

1998–99

1997–98

1996–97

Special

assessment

program

<—DFL—> <—EFU—>

Years to

compute

add tax

x x x x x x x x x x

In the above example, the land must have been continuously subject to special assessment within the past 10 years,

otherwise calculate five years additional tax [ORS 308A.712(5)(b)(A)].

5-6 150-303-422 (Rev. 11-07-22)

4. No additional tax

4A. Statutes

ORS 308A.709 and 197.754 addresses circumstances

when there is no additional tax following disqualifica-

tion. In these situations, the “potential additional tax”

notation may be removed from the roll and no addi-

tional taxes are imposed or collected.

4B1. Acquired by governmental agency (eminent

domain)

Eminent domain is the power of a government agency

to condemn or take property from private ownership

for public benefit provided there is just compensation

to the owner (i.e., the government agency adequately

compensates the owner for the value of the property).

ORS 308A.709(1)(a) specifies the acquisition by the gov-

ernment entity requires the “lawful exercise of the

power of eminent domain.” An eminent domain acqui-

sition may be by force, but many times government

Example 4: Assume same scenario as example 3, only land was under EFU from 1996 through 1998 and under DFL

from 1999 through 2005. Because land was disqualified from EFU outside the urban growth boundary within

the last 10 years, and the land has been continuously in special assessment, there is a 10-year “look back,” which

means you look back to tax year 1996–97. Per ORS 308A.712(5)(b)(B), the additional tax for the DFL is limited to five

years. Calculate the DFL additional tax for years 2001 through 2005, then compute the years under EFU (1996–1998).

Because DFL additional tax is limited to five years, the additional tax can’t be assessed for 1999 or 2000.

Tax year

2006–07

2005–06

2004–05

2003–04

2002–03

2001–02

2000–01

1999–00

1998–99

1997–98

1996–97

Special

assessment

program

<— DFL—> <–EFU–>

Years to

compute

add tax

x x x x x x x x

In the above example, the land must have been continuously subject to special assessment within the past 10 years,

otherwise calculate five years additional tax [ORS 308A.712(5)(b)(A)].

Example 5: In 2002, the county governing body removed the land from an EFU zone and additional taxes weren’t

imposed as specified in ORS 308A.709(1)(c). Upon removal of the EFU zone, the land was disqualified and the

owner applied for non-EFU special assessment and had five years to qualify, ORS 308A.724(2). In 2006, the owner

changed the use of the land to an industrial use.

Additional taxes are to be collected under ORS 308A.703 for the four years the land was in non-EFU special assess-

ment. The years the land was in EFU special assessment are not collectable due to the removal of the land from an

EFU zone as specified in ORS 308A.709(1)(c) and ORS 308A.712(6).

Tax year

2006–07

2005–06

2004–05

2003–04

2002–03

2001–02

2000–01

1999–00

1998–99

1997–98

1996–97

Special

assessment

program

<–Non-EFU–>

<—EFU—>

Years to

compute

add tax

x x x x

5-7 150-303-422 (Rev. 11-07-22)

agencies acquire the property through negotiation

with a willing owner. For an acquisition to qualify

under ORS 308A.709, the government agency has to

have the power to condemn the property in question.

The agency must also be able to demonstrate the reason

it acquired the property was for a purpose that would

have allowed condemnation had the owner not been

willing to sell. (OTC 2022, 2177 January 8, 1985, Nature

Conservancy v. DOR)

4B2. Acquired by government agency (parks and

recreation)

The land becomes exempt from property taxation.

These acquisitions are covered under ORS 308A.709(1)

(b)(c).

4B3. Leased public property

ORS 308A.709(2)(a) addresses public property leased to

a taxable owner under a cash rent or crop share agree-

ment. Any land specially assessed for farm use as

described in ORS 307.110 isn’t required to pay additional

taxes if the land is disqualified due to termination of

the lease. If the lease is cancelled after June 30 then the

land remains specially assessed as farm use land until

the next year. If the land transfers to a taxable owner

between July 1 and December 31 then the PAT is col-

lectable from the new owner. This statute only applies

to farm special assessment. If the lease is cancelled after

June 30 then the land remains specially assessed as

farm use land until the next year. If the land transfers to

a taxable owner between July 1 and December 31, then

the PAT is collectable from the new owner. See “Exempt

owner disqualification” in this manual.

4B4. Removal of Land from EFU Zone

ORS 308A.709(1)(e) specifies additional taxes can’t be

imposed for land that ceases to be located within the

boundaries of an exclusive farm use zone as the result

of a change in the boundaries of the zone or removal of

the zone following an action by:

1. A governing body of a city or county that wasn’t

initiated by the owner of the land;

2. The State Parks and Recreation Department for

public park purposes under ORS 390.121; or

3. The State Fish and Wildlife Commission for wild-

life management purposes under ORS 496.146.

EFU zone changes that are initiated by an action of the

land owner will have additional taxes deferred for any

land meeting the criteria of ORS 308A.706.

Example: Following the zone change, if the owner lets

the land lay idle, the additional taxes are deferred

under ORS 308A.706(1)(a) as long as the land isn’t used

for another use and remains compatible with returning

the land to a farm use.

Example: Following the zone change, the owner changes

to non-EFU special assessment. The additional taxes

are deferred under ORS 308A.706(1)(d) for the change

in special assessment. As specified in ORS 308A.724,

the owner has five years to meet the non-EFU farm use

and income requirements of ORS 308A.068 and ORS

308A.071.

See also “Removal of land from an EFU zone” in this

manual.

4B5. Land zoned for urban uses

(ORS 197.754 and 197.756)

Land in an area zoned “urban uses” as specified in ORS

197.754 and 197.756 shall not be subject to additional

taxes under ORS 308A.700 to 308A.733 if the land ceases

to be used for farm use within the five years following

the date the area is zoned for urban uses. After the five-

year time period any land disqualified from farm use

special assessment will be subject to additional taxes as

specified in ORS 308A.700 to 308A.733.

5. Non-EFU abatement

If, on July 1 of any year, farmland specially assessed

as non-EFU is disqualified from farm use special

assessment due to any requirement of ORS 308A.071,

the additional taxes can be abated. The abatement only

applies to non-EFU land that is disqualified under ORS

308A.116 for failure to meet the income requirements of

ORS 308A.071.

To qualify for abatement, the land must not have

discontinued farm use and must maintain a limited

farm use for each year the abatement continues. If

there is a break in farm use at any time, including non-

use, the abatement stops and there is no provision to

requalify for continued abatement.

As limited use is completed, the assessor abates

additional taxes beginning with the oldest year for

which the additional taxes are due up to five years

or the number of years the farm use was in effect,

whichever is less.

The abatement only relieves the additional tax liability.

If an owner discontinues the limited use or requalifies

the land for farm use special assessment or other

special assessment, the abatement ends. Any abated

years completed will reduce the potential additional

tax liability.

Following are some abatement examples:

5-8 150-303-422 (Rev. 11-07-22)

Non-EFU abatement examples

Codes: PAT = Potential additional tax liability

FV = Farm use value assessment

MV = Real market value assessment

F = Farm use

LF = Limited farm use

$ = Minimum income requirement satisfied

A-1, 2, ...x = Abated (tax year abatement occurs)

Example #1: Disqualification due to lack of income—abatement (308A.119)

Disqualify

(Lack of income)

308A.116



Tax year

Tax status

Value

03-04

PAT

04-05

PAT

05-06

PAT

06-07

PAT

07-08

PAT

08-09

Use F F F F F LF

Income $ $ N/A

Abatement procedure

1. Calculate PAT liability (5 year maximum).

2. Abate year for year (oldest year first).

3. Must complete limited use for 08–09 before oldest year (03–04) can be abated.

4. Assess at RMV.

5. Qualifies automatically with limited farm use.

6. No income requirement during abatement.

Example #2: Owner abated 3 years then quit farming (308A.116)

Disqualify Disqualify

(Lack of income) No use

308A.116 308A.116

Tax year

Tax abated

Tax status

Value

03-04

(08-09)

A-1

04-05

(09-10)

A-2

05-06

(10-11)

A-3

06-07

PAT

07-08

PAT

08-09

09-10

10-11

11-12

Use F F F F F LF LF LF Quit

Income $ $ N/A N/A N/A

Abatement procedure

1. Abatement terminates

a) 3 oldest years have been abated.

b) 2 unabated years (06–07 and 07–08) remain PAT. No additional tax until use change incompatible with farm

use. 308A.706(1)(a).

2. Continue assessment @ RMV.

5-9 150-303-422 (Rev. 11-07-22)

Example #3: Requalification after 3 years on abatement (308A.122)

and change of use after 2 years requalified farm use [308A.706(1)(a)]

Disqualify *Change of use

(Lack of income) Requalify incompatible

308A.116 308A.122 308A.712(2)

  

Tax year

Tax abated

Tax status

Value

03–04

(08–09)

A-1

04–05

(09–10)

A-2

05–06

(10–11)

A-3

06–07

PAT

07–08

PAT

08–09

09–10

10–11

11–12

PAT

12–13

PAT

13–14

Use F F F F F LF LF F F F

Income $ $ $ $ $ $

Failed 3 of 5 years

(Disqualify)

Passes 3 of 5 years

(Requalify if owner applies)

Abatement procedure

1. Abatement terminates

a. 3 oldest years have been abated.

b. 2 unabated years remain PAT. If requalified after 5 years the unabated years (06–07 and 07–08) will no longer

apply due to 5 year maximum potential additional tax liability period.

2. Must submit new application (308A.077) for special assessment and continue to meet 3 of 5 year test the same

as any qualifying farm.

3. Assess at farm use value.

Notes:

Can’t discontinue farm use (must maintain limited use) (or abatement ends with no provision to get back on

abatement).

Can only receive abatement on non-EFU land from lack of income (no income requirement while in abatement). No

abatement for EFU land.

*Change of use disqualification would require additional tax for tax years 11–12 and 12–13. ORS 308A.712(2) requires

the assessor to skip over the market value (MV) years “whether or not continuous” and apply additional taxes for

unabated years (06–07 and 07–08). To reach the maximum 5 years, the assessor shall skip over the unabated years

“whether or not continuous” and collect any years that remain a potential tax liability (years prior to 03–04). How-

ever, in the event during the look back the account has experienced a prior collection of additional taxes, the asses-

sor may not skip over those years “whether or not continuous.”

6-1 150-303-422 (Rev. 11-07-22)

Appendix A: Farm use legislation and history

History of farm use special assessments ............................................................................... 6-2

History timeline chart ............................................................................................................. 6-8

Oregon Revised Statute chart ................................................................................................6-16

6-2 150-303-422 (Rev. 11-07-22)

History of farm use special assessments

Purpose

This section will familiarize the reader with changes

in farm laws since the inception of the farm use special

assessment program enacted by the 1961 Legislature.

It’s important to realize that a taxpayer or even a co-

worker has heard the same terminology relating to

different special assessment programs and doesn’t

realize that each program operates under its own set

of laws. They may use one term when they mean some-

thing entirely different. These laws are not perma-

nent. Through the years the laws have often changed.

Many times people will refer to a law and think it still

applies when changes have occurred to make it more or

less restrictive. Therefore, there is a need to study the

course of events to accurately relate to the changes and

any misunderstandings over time. The purpose of this

section is to help the reader relate to some of the farm

use law changes that have occurred since the special

assessment program as we know it today began in 1961.

Brief background

Farm use special assessment evolved after the state

reappraisal program was created in the late 1950s and

early 1960s. Farm use special assessment evolved after

the state reappraisal program was created in the late

1950s and early 1960s. Farm reappraisal was mandated

by the 1953 Legislature. Farm use zoning and farm

use assessment came about as a result of legislative

action because taxes on farmland were determined

to be excessive compared to incomes, particularly in

areas with urban influence. Therefore, a 1961 legislative

change allowed for farm zone special assessments.

One of the shortcomings of the 1961 change was that

it only allowed for special assessment in areas that

had already been planned and zoned for farm use. At

that time, less than 10 percent of the state of Oregon

was zoned. That left the remaining 90 percent with no

means of relief. The 1963 session of the Legislature then

enacted ORS 308.370 that provided special assessment

of EFU and non-EFU (unzoned) farmland (commonly

called farm deferral). The 1963 legislation also enacted

ORS 215.203 and 215.213 zoning laws to provide a defi-

nition for farm use and permitted uses in a farm use

zone.

In 1965, the legislative assembly enacted ORS 308.239

(later codified ORS 308.345) to give assessors guidance

to value land qualifying for farm use special assess-

ment. Legislation required that only properties sold

from a farmer to a farmer would be considered a sale to

use to establish values for farm use.

In 1967, ORS 308.345 introduced the prudent investor

test. At that time, all real property was valued at 25 per-

cent of market value and the laws were in the process

of being changed to 100 percent of market value. The

prudent investor test recognized that farm properties

didn’t sell at a return commensurate with commercial

interest rates. Since farm property sale prices are gen-

erally above a level that provides sufficient return to a

prudent investor, the Legislature required assessors to

use a modified income approach with a capitalization

rate that reflects prudent investment rates. Under this

method, farm properties are assessed at a value accord-

ing to their rate of return. Only if the rate of return

becomes a prudent investment will farm sales be used

to establish market value.

This is the basis for the special assessment program we

have today. The following topics have been drafted to

provide the reader with background information for

the many changes to the farm use special assessment

program.

Topics

Farm use definition (ORS 215.203)

Few changes have been made in the definition of farm

use since 1963. Originally, the wording required the

farm be a bona fide farm operation. However, for 10

years no one could agree on what a bona fide farm was,

so the 1973 legislation included the definition of farm

use as part of Senate Bill 101. Senate Bill 101 stated in

more specific terms that property farmed in a manner

normal for the particular area and the particular farm-

ing operation would be considered a valid farm use

operation. Terms that didn’t have one meaning to all

people, such as bona fide, were removed.

Special assessment terminology (greenbelt, deferral)

Often, different terms have been used to mean the same

thing, such as greenbelt or deferral. Today, the farm use

special assessment program is called EFU or non-EFU

(exclusive farm use) farmland.

“Greenbelt” is a term some people use in error syn-

onymously with special EFU/non-EFU assessment.

Greenbelt was a zoning term for providing urban con-

tainment by putting a farm zone band immediately

surrounding an urban area. By establishing a green-

belt, it would be too expensive to provide services from

the urban area through the greenbelt zoned area with

the idea that it would prevent the outlying lands from

being developed.

6-3 150-303-422 (Rev. 11-07-22)

In reality, as soon as the prices increased in the urban

areas, buyers migrated to less expensive properties out-

side the urban zone, so it became necessary to zone the

entire state.

“Deferral” is another name used for special EFU/

non-EFU assessment programs. This term was derived

from the initial program statutes that referred to the

“deferred tax liability.”

“Greenways” were created by the Legislature in the

early 1970s. These were areas along our rivers and

streams that were to be preserved for cleaning the

water in the streams and to provide what was called

the Willamette Greenway, which was the area where

the development rights were to be acquired by the state.

While land in a greenway may qualify for farm use

special assessment, the term greenway isn’t a special

EFU/non-EFU assessment term. Along with the green-

ways, a term that we often hear is wetlands and ripar-

ian lands.

A “wetland” determination classifies wetlands on a

farm according to requirements of the 1985 Food Secu-

rity Act. Farm activities may be restricted for farmers

to receive United States Department of Agriculture

(USDA) benefits. While these restrictions may affect the

income status of a farm account, the term wetland isn’t

a special assessment term.

Note: Wetland may qualify as wasteland under ORS

308A.056(3)(e) and constitute “currently employed”, for

EFU zoned land. In non-EFU zones wasteland requires

an application.

“Riparian” lands are those lands adjacent to a body of

water that qualify for a property tax exemption under

ORS 308A.350 to 308A.383. The Oregon State Depart-

ment of Fish and Wildlife regulates riparian lands.

Application for riparian land special assessment is filed

with the county assessor.

Other special assessment programs

Other special assessment programs have qualification

and disqualification procedures similar to the language

found in the farm use program. The following is a list

of other property tax special assessment programs (ref-

erence ORS 308A.733):

ORS

Open space 308A.315

Wildlife habitat 308A.427

Conservation easement 308A.459

Riparian exemption

Habitat exemption 308A.362

Western Oregon forestland 321.358

small tract

forestland 321.706

Eastern Oregon forestland 321.839

Land in a subdivision

When the special assessment program first began, land

in a subdivision wasn’t a criterion for disqualification.

The 1971 Legislature provided that any non-EFU prop-

erty that was platted into a subdivision after Septem-

ber 9, 1971 wouldn’t be eligible for farm use special

assessment. In the early 1980s during the recession,

there were a lot of properties that had been platted but

no change in use had occurred. There was no demand

for the lots. Properties continued to be farmed, so the

1983 Legislature enacted ORS 308.387 (now 308A.116).

ORS 308A.116 allows properties that have been plat-

ted to requalify for farm use special assessment. Upon

requalification the property remains qualified until

a change of use occurs or it no longer meets the farm

use qualification. More recently, EFU zones are being

subdivided.

Minimum acreage

Originally the greenbelt law required there be at least

five acres to qualify for farm zoning. Once the land was

zoned for farming the assessor was required to assess

the land at farm use value. The five acre requirement

was replaced when gross income requirements were

first introduced in ORS 215.203 in 1967.

Homesite special assessment

(ORS 308.377 & 308.378)

Prior to 1980, farm homesites weren’t to exceed one acre

and they were valued at market value for both EFU and

non-EFU. The 1979 Legislature created a special assess-

ment for farm homesites which allowed the land por-

tion of a qualifying homesite to be assessed at farm use

land value. Special assessment of farm homesites in an

EFU zone were automatic when farm-related dwell-

ings occupied the homesite (see OAR 150-308-1140 for

definition of farm-related dwellings). Non-EFU home-

sites qualified if occupied by farm-related dwellings

and an application was made to the county assessor on

or before April 15 that showed over 50 percent of the

dwelling’s occupants’ adjusted gross income was from

farming. This program was in force between 1980 and

1987. ORS 308.395 (non-EFU) and 308.399 (EFU) didn’t

require additional tax for homesite disqualification.

When homesite land no longer qualified, it and any on-

site improvements were assessed at market value.

In 1987, the Legislature created special provisions for

the treatment of homesites under ORS 308.377 and ORS

308.378.

ORS 308.377 changed the homesite land value from

farm use land value to average market value per acre

of all contiguous acres plus a $4,000 maximum on-site

value for both EFU and non-EFU qualifying homesites.

6-4 150-303-422 (Rev. 11-07-22)

ORS 308.378 protects both EFU and non-EFU qualified

farm homesites from additional taxes in the event of

disqualification from special assessment under ORS

308.377, except, if the homesite is involved in a land

partition for a nonfarm parcel under ORS 215.263 (4).

This allows a farmer to discontinue the use of a farm

related dwelling and use it as a nonfarm related home-

site without having to pay potential additional taxes

even though the homesite is disqualified and assessed

under ORS 308.205 (market value).

Non-farm dwellings (additional taxes)

Sometimes there is confusion between ORS 308.378

and ORS 215.236 regarding additional taxes on non-

farm dwellings.

ORS 308.378 prohibits additional taxes for the disquali-

fication of a homesite qualified for valuation under ORS

308.377 except if the homesite is involved in a land par-

tition under 215.263(4). This allows a farmer to change

an existing farm related dwelling to a nonfarm dwell-

ing. There would be a disqualification but no additional

tax (except if there is a partition) and it applies to both

EFU and non-EFU homesites.

ORS 215.236 passed by the 1981 Legislature requires

disqualification and that additional taxes are paid prior

to the owner receiving a building permit for the estab-

lishment of a nonfarm dwelling in an EFU zone. The

disqualification and additional taxes apply to the entire

nonfarm parcel.

In 1985, ORS 215.236 was modified so that all EFU zoned

farm and forest specially assessed land is required to

follow the requirements of ORS 215.236. Previously,

this law only included disqualification of farm-use

assessment.

A parcel that has been partitioned for a nonfarm dwell-

ing and disqualified can become a qualifying parcel if

it is combined with an existing, contiguous, farm use

“lot or parcel” (not a few users through a lot line adjust-

ment) and is again devoted to farm use. The nonfarm

dwelling will then become a farm dwelling entitled to

its one-acre homesite assessment under ORS 308.377,

now renumbered to ORS 308A.256 in 2003.

Application required for non-EFU homesites and

wasteland

Prior to the 1979 Legislature, homesites were assessed

at market value for both EFU and non-EFU farms. The

1979 Legislature created a special assessment which

allowed the land portion of a qualifying homesite to be

assessed at farm use land value. EFU homesites used in

conjunction with the farm automatically qualify. How-

ever, an application by April 15 is required each year

an applicant wishes to qualify for homesite and waste-

land special assessment in a zone other than exclusive

farm use. To qualify the applicant (and spouse) must

earn at least 50 percent of their adjusted gross income

from farming. A copy of their income tax return must

be filed with the application.

Most of the large farms are in EFU farm zoned areas.

However, some of the farmers who live closer to an

urban area have their homesite located in a (non-EFU)

rural residential zone which is contiguous to their

farming operation. Another common applicant is a

farmer located in rangeland or timberland areas which

are often zoned other than exclusive farm use.

Disqualification of specially assessed farmland

When the special assessment program began in 1964,

ORS 308.390 required all the disqualification informa-

tion—market value, farm use value, and additional tax

years—to be on the tax roll and tax billing. Because this

information was available, there was no formal dis-

qualification procedure. The 1971 Legislature required

the farm use value to be the only value on the tax bill.

This 1971 change made it necessary to develop proce-

dures which required the taxpayer be notified of the

assessors’ intent to disqualify and the amount of addi-

tional tax that would be placed on the next general tax

roll.

Prior to the 1973 Legislature, there was no disqualifi-

cation penalty (additional tax) on EFU farmland. The

1973 Legislature passed SB101, which provided a pen-

alty (additional tax) for disqualification of EFU farm-

land with a maximum penalty of 10 years outside the

urban growth boundary and five years inside the urban

growth boundary.

Prior to the 1973 Legislature, the disqualification pen-

alty on non-EFU farmland was a maximum of five

years with six percent simple interest per year. The 1973

Legislature increased the number of years from five

years to ten years. Each of those years had a 6 percent

simple interest applied for each year from the day that

tax would originally have been due. By 1979, the simple

interest could have accumulated to a maximum of 60

percent for the oldest year.

In 1981, the Legislature changed the process for recal-

culating the disqualification penalty on farmland. A

multiplier was used instead of figuring the difference

in tax for each year. The Legislature also eliminated

the 6 percent interest. The new maximum computa-

tion was five times the difference in value times the

tax rate for the last year in which the property was

specially assessed. The multiplier made the additional

tax computation much easier for the assessors office.

The law change had the overall effect of reducing the

amount of liability for the average farm deferral prop-

erty owner. However, property owners who had recent

zone changes that upzoned their properties generally

6-6 150-303-422 (Rev. 11-07-22)

experienced a considerable increase in the amount of

their additional tax liability (disqualification penalty).

1981 legislation also required disqualification of farm

use assessment in order to get a final approval for non-

farm parcels or nonfarm homesites under ORS 215.236.

This affected specially assessed EFU land only (see

“Nonfarm dwellings”).

In 1985, ORS 215.236 was expanded to require disquali-

fication and payment of additional taxes prior to receiv-

ing a nonfarm building permit on all farm, forest, or

open space designations.

In 1987, ORS 308.382 (EFU) and ORS 308.384 (non-EFU)

provided for disqualification when the assessor dis-

covered non-qualifying idle farmland. The additional

taxes are computed, but, not extended to the tax roll

until the farmland is disqualified under ORS 308.390

(non-EFU) and ORS 308.397 (EFU). See “Additional

taxes computed but not extended” below.

In 1990, Oregon voters passed Measure 5. In response to

Measure 5, the 1991 Legislature passed HB2550 which

eliminated the multiplier and required that additional

taxes could only be imposed for each year under prop-

erty tax limitation.

OAR 150-308-1530 states in part:

(3) Additional tax computation:

(a) Additional taxes computed for 1991–92 tax

year and thereafter shall be the difference between

the taxes assessed against the land in that year and

the taxes that would have been assessed against the

land had the land not been in farm use.

(b) Additional taxes computed for the years

of exemption prior to the 1991–92 tax year shall be

computed on the difference of value of the last year

of special assessment prior to the 1991–92 tax year

times the tax rate for that year times the number

of remaining years the special assessment was in

effect.

tional tax shall be collected shall be the total num-

ber of years (whether or not continuous) that the

special assessment was in effect for the land, not to

exceed five years.

OAR 150-308.399 states in part:

(3) Additional tax computation: Compute addi-

tional taxes in accordance with OAR 150-308.395(3)

(a) and (b). The number of years the additional tax

shall be collected shall be the total number of years

(whether or not continuous) that the special assess-

ment was in effect for the land not to exceed ten

years if the land is located outside an urban growth

boundary and five years if the land is located

within an urban growth boundary.

The above administrative rules provide that counties

use the multiplier for years prior to the time of Mea-

sure 5, which would have been before the July 1, 1991

tax year. For the 1991–92 tax years and thereafter, the tax

differences are figured separately for each year under

the Measure 5 limitation up to a maximum of 5 years

for non-EFU or EFU within an urban growth boundary,

and 10 years for EFU outside an urban growth bound-

ary. This method will be phased in over the next few

years until the additional tax computation (disqualifi-

cation penalty) is no longer affected by the tax years

prior to the 1991–92 tax year.

In 1990, Ballot Measure 5 changed the definition of

market value for property taxation. The 1991 legisla-

tion passed House Bill 2550, which requires both the

real market value and the special assessed value on the

property tax notice to the taxpayer.

Additional taxes computed but not extended

The 1987 Legislature enacted ORS 308.382 (EFU) and

ORS 308.384 (non-EFU) which provided a different

treatment of idle farmland upon disqualification. Upon

discovery idle farmland is disqualified, placed on the

roll at market value, and the potential tax liability is

calculated, but not extended to the tax roll. Calculat-

ing but not extending means that the additional tax

is computed and the amount is displayed on both the

assessment and tax roll but won’t be extended to be col-

lected. Prior to this legislation, land that was discov-

ered to be idle was disqualified and additional taxes

were extended to the roll.

This may have also been an answer to part of the prob-

lem with financing properties under special assess-

ment because many lenders ended up with additional

tax bills when properties were no longer farmed. Many

government guaranteed loans only applied to the resi-

dential portion so the lenders received the tax bill on

the farm land. This law is now codified under ORS

308A.706(1)(a).

Real market value defined

Below is Oregon Statute 308.205, which defines real

market value.

308.205 Real market value defined. (1) Real mar-

ket value of all property, real and personal, as the

property exists on the date of assessment, means

the minimum amount in cash which could reason-

ably be expected by an informed seller acting with-

out compulsion from an informed buyer acting

without compulsion, in an arm’s-length transaction

during the fiscal year.

(2) Real market value in all cases shall be deter-

mined by methods and procedures in accordance

with rules adopted by the Department of Revenue

and in accordance with the following:

6-7 150-303-422 (Rev. 11-07-22)

(a) The minimum amount a typical seller

would accept or the highest amount a typical buyer

would offer which could reasonably be expected by

a seller of property.

(b) An amount in cash shall be considered the

equivalent of a financing method that is typical for

a property.

value, its real market value is the amount of money

that would justly compensate the owner for loss of

the property.

(d) If the property is subject to governmental

restriction as to use on the assessment date under

applicable law or regulation, real market value shall

not be based upon sales that reflect for the prop-

erty a value that the property would have if the use

of the property weren’t subject to the restriction

unless adjustments in value are made reflecting the

effect of the restrictions.

6-8 150-303-422 (Rev. 11-07-22)

History timeline chart

Year

EFU or

non-EFU Statute Qualifications Valuation

Disqualification

Other

1951 Statewide reappraisal

1957 307.320 Deciduous tree

exemption

1961 EFU 308.237

[Repealed

1963]

5 acres minimum

must be farmed

Farmland

market value

without urban

influence

Green Belt Law

1961 EFU 308.238

[Repealed

1963]

July 1 if not in farm

use

1963 EFU 215.203 Exclusive farm

use

Farmland at

market value

without urban

influence

Provides farm use

zoning; repealed

ORS 308.237 (Green

Law)

1963 Non-EFU 308.395

[Repealed

1963]

If not farmed,

property had up to

5 year liability for

deferred taxes

1963 EFU 308.370(1) Exclusive farm

use

Farmland at

market value

without urban

influence

1963 Non-EFU 308.370(2) Farmed prior 2

years; application

prior to February

1 of each year

Farmland at

market value

without urban

influence

1965 EFU &

non-EFU

308.239

became

308.345

Farmland to be

evaluated on

basis of farm

use value

1965 307.320 Expanded

exemption to include

agricultural products

1967 308.345

(HB 1692)

Added

prudent

investor test

1967 308.375 Owner to be notified

if application

not made and

could file w/late

filing fee to avoid

disqualification

1967 EFU &

non-EFU

215.203 Must meet $500/

year income

requirement

6-9 150-303-422 (Rev. 11-07-22)

Year

EFU or

non-EFU Statute Qualifications Valuation

Disqualification

Other

1967 308.345

(HB 1808)

Values

determined by

capitalization

included DOR

interest rate &

local tax rate

1967 308.232

(HB 1808)

Established

assessment at

100% of TCV

(change from

25% of TCV)

1967 EFU &

non-EFU

308.370

(HB 1808)

Amended “be

assessed at its

true cash value

for farm use”

to “its value

for farm use”

1969 EFU &

non-EFU

308.350 Board of review;

review members 2

years, submit income

approach factor to

board of review

1969 308.380 Made farm use

definition consistent

with ORS 215.203.

Considered farm

until assessing farm

use value. (Prior

to this each tax lot

stood on its own.)

1969 Non-EFU 308.375 Any deeded or

recorded contract

buyer may apply

(prior all owners

had to apply)

1969 Amends 215.213 Establishing farm

dwelling on lot or

parcel that is part of

farming operations

1971 Non-EFU 308.375 Application made

on or before April

1 of “first year”

special assessment

qualifies (prior

applications were

on an annual

basis); new

owners must

apply within 60

days of purchase

6-10 150-303-422 (Rev. 11-07-22)

Year

EFU or

non-EFU Statute Qualifications Valuation

Disqualification

Other

1971 Non-EFU

& EFU

308.370 Doesn’t disqualify

if the farm use not

interfered with

Allowed exploration

for geo-thermal

resources without

disqualifying

property

1971 Non-EFU 308.385

(repealed)

Application no

longer had to be

recorded with county

clerk by assessor

1971 Non-EFU 308.390

(amended)

Deleted

carrying of

market value

on land card

and tax roll

Notation: “potential

additional tax

liability” on tax and

assessment rolls

1971 Non-EFU 308.395 Assessor to notify

owner of disqualifi-

cation and amount

of additional tax and

interest if disquali-

fied (5 years) maxi-

mum

1973 EFU SB 101,

215.203,

215.213

Land under hired

help dwellings

and land under

buildings

supporting

accepted farming

practices

Defines “accepted

farming practices”

1973 EFU 308.397 Removed income

requirement

Provide for

additional tax

liability; 5 years

inside urban growth

boundary—10

outside

1973 EFU SB 195

(308.403)

District attorney to

determine if zone

qualifies as exclusive

farm use zone;

assessor shall notify

county governing

body of nonqualified

zone and possibly

subject to additional

tax liability

1973 EFU &

non-EFU

HB 2144

(amended

308.250)

Added mint

to processor’s

exemption

1973 EFU HB 2220

(307.485)

Exempts farm labor

camps

6-11 150-303-422 (Rev. 11-07-22)

Year

EFU or

non-EFU Statute Qualifications Valuation

Disqualification

Other

1973 Non-EFU HB 2317

(amended

308.390

and

308.395)

Land no longer

disqualified from

farm use assessment

due to change of

ownership; did away

with need for new

owner to apply

1973 EFU &

non-EFU

HB 3247

(amended

310.608)

Adds farm

machinery to

inventory exemption

1973 Non-EFU

& EFU

HB 2304

(amended

321.618)

Established

minimum stocking

for forest land at

60% of minimum

provided in forest

practices act

1975 EFU SB 497

(amended

215.213)

Additional non-

farm use in farm

zone (personal use

airports)

1975 EFU &

non-EFU

HB 3015

(amended

308.235)

Valuation of

land based on

land use plan

and zoning;

capitalization

rate to be

used shall be

average rate

of interest for

Federal Land

Bank over

past five years

component for

the tax rate

1975 EFU &

non-EFU

SB 783

(amended

308.345)

1975 EFU &

non-EFU

SB 262

(amended

215.203)

Farm wood lot

qualified up to 20

acres (previously

if over 20 acres,

none qualified,

now first 20 acres

qualifies)

1977 Non-EFU SB 200

(amended

308.370)

Allows lease for use

for fishing, hunting,

camping, or other

recreational uses

6-12 150-303-422 (Rev. 11-07-22)

Year

EFU or

non-EFU Statute Qualifications Valuation

Disqualification

Other

1977 Non-EFU SB 468

(amended

308.374)

Added income

requirement

to law; income

requirement:

Under 5 acres—

$500

5 to 20 acres—

$100/acre

Over 20 acres—

$2,000 +

If qualified,

valued at farm

use value

Disqualified if

doesn’t meet income

requirement; special

assessment becomes

annotated lien

1977 (308.404) Land at market

value

Special assessment

becomes annotated

lien

Abatement process;

if not qualified for

income but still being

farmed, abate one

year for each year

farmed

1977 EFU SB 819

(215.213)

Allowed uses in

EFU zone added

(home occupations,

processing forest

products, boarding

of horses)

1977 EFU &

non-EFU

SB 829

(308.345)

Modified

interest rate

establishing

farm use value

(effective rate)

1979 EFU SB 437

(215.203)

Wasteland,

home sites,

and land under

farm buildings

to be valued at

farm use

1981 EFU &

non-EFU

SB 372

(308.350)

Staggered terms at

farm board of review

1981 EFU SB 397

(amended

308.025)

Designation of

riparian lands

1981 EFU &

non-EFU

HB 2122

(321.960)

Allows rollover upon

disqualification of

zoned farmland,

non-EFU farmland,

forest land, and small

woodlands

1981 Non-EFU

& EFU

HB 2182

(308.395)

Multiplier

instead of

individual year

computation

and interest

Included EFU,

non-EFU, small

woodlands, and

designated forest

land

6-13 150-303-422 (Rev. 11-07-22)

Year

EFU or

non-EFU Statute Qualifications Valuation

Disqualification

Other

1981 HB 2225

(215.213)

Provided

for removal

of property

from farm use

assessment

if non-farm

parcel or non-

farm homesite

approved

1983 EFU SB 237

(215.253)

Land must meet

requirements of

non-EFU land to

qualify for special

assessment; must

meet income

requirement

Disqualify from

automatic farm use

assessment; calculate

and extend deferred

taxes to roll; may

reapply for non-EFU

This bill allowed

marginal lands

within EFU

1983 EFU &

non-EFU

HB 2685

(308.396

amended)

No additional tax

on public land

exchanged

1983 EFU 215.203

(amended)

Marginal land not

restricting farm use

or farm structures

1983 EFU SB 347,

308.775,

and

308.760

Farm or forest to

open space; applies

to public golf course

within or adjacent

to urban growth

boundary

1983 Non-EFU HB 2824 Land can requalify

for farm or forest

special assessment

after platting

1985 EFU SB 185

(308.403)

Notification

of county and

requalification of

farm zone within

six months, assessor

shall continue

assessment as EFU

zoned farm land;

notation remains on

tax roll—“potential

additional tax

liability”

1985 EFU &

non-EFU

215.203 Allows farm use

qualification for

aquaculture

1985 Non-EFU SB 212

(308.396)

Farm or forest

additional tax not

collected when

property transfers to

public park, ODOT,

or Fish and Wildlife.

6-14 150-303-422 (Rev. 11-07-22)

Year

EFU or

non-EFU Statute Qualifications Valuation

Disqualification

Other

1985 EFU SB 376

(215.213)

Residential

properties for

handicapped persons

in EFU zone.

1985 EFU HB 2381

(215.213)

Relates to partition of

land zoned EFU.

1985 EFU HB 2552

(215.213)

Allows racing dog

kennels in counties

over 200,000

population that have

a dog racing track;

also allows them in

adjoining counties

with over 200,000

population

1985 EFU 215.203 Continued

qualification for

flooded farm land

1987 EFU &

non-EFU

SB 15

308.377

ORS 308.045,

ORS 308.372

Changed land under

homesite from farm

land to average

value of 1 acre plus

4,000 for on-site

development

1987 EFU &

non-EFU

SB 199

(follows

308.407)

Requires notice 1

year prior to dis-

qualification of land

financed by ODVA

1987 Non-EFU HB 2485

(308.345,

308.406)

Allows immediate

qualification of

non-EFU land

purchased and

made part of

farming operation

that exceeded

$10,000 in prior

year

1987 Non-EFU

& EFU

HB 2664

(308.384,

308.382)

If requalifies, farm

use is reapplied

and notation of

lien amount is

removed

If land not

farmed, put

at market

value; compute

deferred tax,

post lien of

amount of

deferred tax,

but don’t

extend tax to

roll

Expires 1-1-1997

6-15 150-303-422 (Rev. 11-07-22)

Year

EFU or

non-EFU Statute Qualifications Valuation

Disqualification

Other

1987 EFU HB 2950

(215.213)

Allows replacement

dwelling in farm

use zones to be used

in conjunction with

farm use if original

house is listed as a

historic property;

allows breeding,

boarding, and

training of horses;

boarding is non-farm

use

1987 EFU HB 3097

(215.213,

215.283)

Allows destination

resort in EFU zone

1987 Non-EFU 308.372 In determining

gross income,

purchase price

of livestock to be

deducted from

gross income

1989 EFU &

non-EFU

308.396 308.399, 308.395 Deferred liability not

collected in certain

cases

1991 EFU &

non-EFU

HB 2550

(308.399,

308.395)

Changed method of

disqualification

Provided for

difference in tax for

each of 5 to 10 years

1991 Non-EFU 308.372,

308.407

New income

requirements for

non-EFU land

starting in 1992

Under 6 acres—

$650

6–30 acres—

$100/acre

Over 30 acres—

$3,000 +

1991 Non-EFU OAR

150-308.395

Allowed phase-in

of new system and

allowed multiplier

for years prior to

1991

1992 EFU OAR

150-308.399

Allowed phase-in

of new system and

allowed multiplier

for years prior to

1991.

6-16 150-303-422 (Rev. 11-07-22)

Oregon Revised Statute chart

Qualification

statutes

Assessed value

statutes

Disqualification

statutes

Assessment based on market value

Taxable based on RMV

Dwellings

Farm related buildings

Other buildings

Non-qualifying land

Non-qualifying homesite

Improvements to the land

Fixtures, improvements not exempt

— Processing equipment

— Milking parlors

— Automatic feeders

— Seed cleaning equipment

— Buried and real property

irrigation lines

— Affixed irrigation pumps and

motors

Non-EFU leased land OAR 150-

308-1040

RMV / MAV

308.146 ( < RMV or MAV)

308.156(4)(a) (M-50 MAV)

308.205 (RMV)

308.232 (RMV / assessment)

308.235 (land valuation)

308A.110 (improvements and

machinery valuation)

Disqualification

215.236 (EFU nonfarm dwellings)

308A.113 (EFU)

308A.116 (non-EFU)

308A.259 (homesites)

308A.718 (taxpayer notification)

708A.743 (conservation

easements)

Additional tax

308A.119 (non-EFU abatement of

additional tax)

308A.703 (collect additional tax)

308A.706 (deferral of additional

tax)

308A.709 (no additional tax)

308A.712 (collection of additional

tax deferred)

Special assessment

Farm use special assessment

308A.056 (farm use defined)

308A.062 (EFU land qualification)

308A.068 (non-EFU land

qualification)

308A.250 (homesite defined)

308A.253 (homesite qualification)

308A.071 (non-EFU income

requirements)

308A.074 (non-EFU wasteland

application)

308A.077 (non-EFU application)

308A.080 (acquired land

qualifications)

308A.083 (potential additional tax

liability)

Farm use SAV / MSAV

308A.092 (valuation criteria)

308A.095 (farm board)

308A.107 (land SAV / MSAV)

308A.256 (HS SAV / MSAV)

308.156(4)(b) (M-50 MSAV)

Change special assessment

308A.086 (requalification

generally)

308A.089 (income requalification)

308A.122 (abatement

requalification)

308A.724 (change special

assessment)

308A.730 (government exchange)

308A.733 (withdrawal of change)

No assessment— no tax

Exempt

307.060 (leased federal

government land)

307.110 (leased public land)

307.315 (nursery stock)

307.320 (trees, shrubs, plants,

crops)

307.325 (ag products in possession

of farmer)

307.390 (mobile field incinerators)

307.391 (smoke management

equipment)

307.394 (farm machinery and

equipment)

307.397 (certain machinery and

equipment)

307.398 (irrigation equipment)

Exempt

308.156(4)(b) (M-50 MSAV)

6-17 150-303-422 (Rev. 11-07-22)

Appendix B: Resource information

Oregon land classification system .........................................................................................6-18

List of perennial crops ........................................................................................................... 6-21

Resources in the farm use mass appraisal process ............................................................ 6-22

Non-EFU timeline chart ........................................................................................................ 6-23

Counter questions .................................................................................................................. 6-24

6-18 150-303-422 (Rev. 11-07-22)

Although land classes may vary somewhat from county

to county, the following classing system is considered

basic and will apply in most instances.

The major classes are identified by roman numerals I

through VIII. Classes I through IV cover land which is,

or could be, tilled. Classes V, VI, and VII cover land not

tillable because of steep slopes, rocky soils, and other

limiting factors. Class VIII is generally unusable land.

Following are descriptions of the eight classes:

Class I

1. General productivity rating:

This is the best tillable land, expected to maintain

at least better than average levels of productivity

for most crops typical to the area. Good to excellent

yields may be expected under typical management.

2. Physical factors in this rating:

a. The soil would have to have at least medium

usable depth and have good texture for tillage

and water-holding capacity.

b. The lay of the land should be nearly level. An

exception to this rule would be wheat lands in

eastern Oregon.

c. This land should be quite well drained. Minor

drainage problems might exist but these

shouldn’t significantly restrict ability to grow

adapted crops.

d. This land should be situated as not to be sub-

ject to overflow under most flood conditions.

Floods would occur rarely, but could be pos-

sible in unusual climatic disturbances.

3. Other factors in this rating:

a. The nature of the cover must be considered by

the appraiser. It shouldn’t be included in clas-

sification unless the condition appears to affect

value significantly or when such limitation

couldn’t be removed except at great expense.

b. Accessibility, irregularity, and size of the fields

in the farm unit should be considered by the

appraiser, but the classification of the land

shouldn’t be lowered to make the adjustment.

Land is classified without regard to the above

factors. The appraiser allows for the condition

by entering on the land card an adjustment fac-

tor for the acres involved.

Class II

1. General productivity rating:

Good tillable land may often produce better than

average yields of most crops typical to the area. The

average manager would be expected to obtain good

yields of most crops typical to the area. Diversifica-

tion of this land would be expected to be somewhat

limited.

2. Physical factors in this rating:

a. This class of soil would have at least moderate

depth, but tillage might be limited by occasional

rocks. The soil might have moderately “light”

or “heavy” texture which might limit its tillage

or water holding capacity.

b. The lay of this class of land in most cases should

be fairly level. An exception would be wheat

lands in eastern Oregon.

c. This land might exhibit subsurface drainage

problems, though no treatment would be neces-

sary to grow most crops typical to the area.

d. This land may be situated in areas of occasional

overflow. These floods are usually expected

only during certain months. However, they

may destroy the crops or prevent the use of the

land in isolated instances.

3. Other factors in this rating:

a. The nature of the cover must always be noted

by the appraiser. However, it must not be con-

sidered in this classification unless the condi-

tion appears to significantly affect value; for

example, when the indicated limitation couldn’t

be removed except at a considerable expense.

Occasional rose bushes wouldn’t warrant

reclassification, whereas a growing reproduc-

tion of conifers might.

b. Accessibility, irregularity, and size of the fields

of the farm unit should be considered by the

appraiser, but the classification of the land

shouldn’t be lowered to make the adjustment.

Land is classified without regard to the above

factors. The appraiser allows for the adjustment

by entering on the land card an adjustment fac-

tor for the acres involved.

Oregon land classification system

6-19 150-303-422 (Rev. 11-07-22)

Class III

1. General productivity rating:

This class of land will have at least average yields

of most crops typical to the area. The average man-

ager would be expected to obtain typical yields of

specially adapted crops typical to the area. Diversi-

fication of this land is limited.

2. Physical factors in this rating:

a. The soil should have at least fair depth. Many

of these tracts, especially those which may be

light or very heavy in texture, will require spe-

cial tillage practices.

b. The lay of the land can be flat to fairly steep. If

land is characterized by a single slope, it could

be called moderately steep. If land is character-

ized by a complex slope, it could be called hilly.

c. This land often exhibits subsurface drainage

problems. In some instances the growth of

crops is severely restricted unless expensive

drainage practices are provided.

d. This land may be in areas of frequent flooding.

Soils may have limited use during some parts of

the growing season.

3. Other factors in this rating:

a. The nature of the cover must always be noted

by the appraiser. However, it must not be con-

sidered in this classification unless the condi-

tion appears to significantly affect value.

b. Accessibility, irregularity, and size of the

fields of the farm unit should be considered

by the appraiser, but the classification of the

land shouldn’t be lowered to make the adjust-

ment. The appraiser allows for the adjustment

by entering an adjustment factor for the acres

involved.

Class IV

1. General productivity rating:

Class IV is the lowest class of tillable land. In many

instances, it’s questionable as to whether the land

should be tilled. It will often be reverted to pasture,

although it might occasionally be cultivated. This

land has little or no diversification.

2. Physical factors in this rating:

a. The soil may be shallow, extreme in texture,

very difficult to till, and contain frequent out-

croppings of parent rock.

b. The lay of the land may be very rolling or steep.

If land is characterized by a single slope, it could

be called steep. If land is classified by a complex

slope, it could be called very rolling or hilly.

c. This soil may be subject to serious draining

problems. Surface water may lay in pools for

long periods. The growth of most crops will be

severely restricted due to drainage.

d. These lands are often subject to frequent and

sporadic inundations. Consequently, any crop-

ping is uncertain, often impractical.

3. Other factors in this rating:

a. The nature of cover will usually limit the use of

this land to pasture, and it must be noted by the

appraiser. However, it must not be considered

as influencing classification unless the condi-

tion appears to significantly affect its value.

This is seldom the case.

b. Accessibility, irregularity, and size of the

fields of the farm unit should be considered

by the appraiser, but the classification of the

land shouldn’t be lowered to make the adjust-

ment. The appraiser allows for the adjustment

by entering an adjustment factor for the acres

involved.

Class V

This land is generally suited to grazing or forestry use

with little limitation. It will run from fairly level to hilly

and is generally used for pasture. The land may be too

stony or wet or otherwise unsuited to cultivation. How-

ever, in some cases a cultivated crop may be grown. It

would, under average management, yield a relatively

good crop of grass forage.

Class VI

This land isn’t suited to cultivation, though it is usually

the better range land. It will often be under forest cover

or wood lot. It is susceptible to erosion on unprotected

slopes.

Class VII

This land isn’t suited to cultivation. It is usually consid-

ered average range land or suitable for trees. The soil is

shallow and has relatively steep slopes and is extremely

susceptible to erosion.

Class VIII

This land is generally not suited to cultivation, graz-

ing, or forestry, but would have some use for wildlife or

recreation, or for watershed protection. It may be used

for limited grazing or forestry. It is usually very steep,

rough, stony, sandy, wet, or severely eroded.

6-20 150-303-422 (Rev. 11-07-22)

Subsymbols

In addition to the eight major classes, eight subsymbols

are also available to further classify the land. These are

used in conjunction with the major class (example: ik).

k river bottom soils

b bench land

h hill land

of overflow

f nontillable land—suitable for clearing

cg clearing

cd cleared

rv reverted

m meadow

To help the appraiser establish land classes, informa-

tion can be obtained from soil surveys made by the soil

conservation service (SCS) as to land capability. Also,

in certain areas, the bureau of reclamation maps indi-

cate irrigation potential, and army corps of engineers

maps indicate drainage and related qualities. Guides

to other sources of information about land capabilities

and classes may be obtained from the county extension

service.

The details of the land classification as established

by the appraisers in the field are transferred from the

aerial photos to the soil classification maps by the car-

tographers. In this way ownership lines, land classes,

and acreage by land class for each ownership, as well as

roads, ditches, streams, etc., are on each map.

6-21 150-303-422 (Rev. 11-07-22)

List of perennial crops and first year

they should meet income requirements

Crop Year west side Year east side

Cherries (sweet & sour) 4th 4th

Grapes 3rd 3rd

Peaches 3rd 3rd

Apples 3rd 3rd

Pears 3rd 3rd

Apricots 3rd 3rd

Plums 3rd 3rd

Prunes 3rd 3rd

Kiwi 3rd *

Filberts 5th 5th (150–200 lbs/year, increase to age 14)

Walnuts 5th 5th

Blueberries 3rd *

Cranberries 2nd 3rd–4th

Strawberries 2nd *

Caneberries 2nd *

(including red & black raspberries, boysenberries,

marion, evergreen)

Christmas trees:

Douglas fir 5th 7th+

Noble fir 6th *

Scotch pine 5th *

Nursery stock:

Shade trees & bonsai 2nd+ (different types of stock on

Rhododendrons &

east side—years vary)

azaleas 3rd+

Alfalfa 2nd 1st Not 100% productive in 1st year, east side

Grass seed 2nd 1st East side: 1st year if planted in the fall, ready

by summer

Cottonwoods 7th 6th

* Crops not typically grown here

6-22 150-303-422 (Rev. 11-07-22)

Cost factor books

1. Residential cost factor book.

2. Farm building cost factor book.

3. Other state cost factors.

4. Valuation services.

Appraisal cards

1. Improvements.

2. Land.

3. Farm use special assessment.

Real estate sales

1. Multiple listing service.

2. Deeds and title company listings.

3. Data analyst supplied lists.

4. Commercially supplied sales listings.

5. Lending institutions.

6. Fee appraisers, realtors, and others in real estate.

7. Neighboring counties and states.

8. Newspapers and real estate circulars.

9. U. S. Fish and Wildlife (wetland sales).

10. Highway department and utility companies

(easements).

Legal resources

1. Oregon Constitution.

2. Oregon Revised Statutes.

3. Court cases (Oregon Tax Court, Oregon Supreme

Court).

4. Attorney General opinions.

5. Department of Revenue opinion and orders.

6. Abstracts (brief summary of legal decisions).

7. Zoning regulations.

8. Building codes.

9. Department of Environmental Quality (EPA

Restrictions).

10. County sanitarian.

11. County watermaster.

12. County council.

13. Department of Revenue.

Maps

1. Aerial photos.

2. Soil maps (soil conservation service) (GIS system).

3. Appraisal maps.

4. Bureau of Land Management maps.

5. Highway department maps.

6. State and national forest maps.

Income and expense information

1. Non-EFU applications.

2. Non-EFU income questionnaires.

3. Federal income tax returns (Schedule F, other

income).

4. Proof of income information requested by

assessor.

5. Rents, leases, crop share, owner/operator

statements.

6. ASCS yields and subsidies.

7. Oregon State University Extension Service.

8. Farm board.

9. Commodity brokers/buyers.

10. Farm suppliers.

11. Equipment dealers.

12. Irrigation districts.

Publications

1. International Association of Assessing Officers.

2. Private and public studies.

3. Appraisal institutes.

4. Periodicals, magazines, and newspapers.

Resources in the farm use mass appraisal process

6-23 150-303-422 (Rev. 11-07-22)

Non-EFU timeline chart

Income

questionnaire

Year 5 Year 4 Year 3 Year 2

12/31

Year 1

4/15

Return

questionnaire

Approve

disqualify

If qualified,

assess at

farm value.

308A.107

Application

(requalification)

Year 5 Year 4 Year 3 Year 2

12/31

Year 1

4/1

File

application must

farm current year

If disqualified or

not approved,

assess at RMV.

308.205

308.146

ORS 308A.071

*3 out of 5 year income

(calendar year)

(nonflood or nondrought years)

OAR 1503081050

On or before March 1

assessor sends

questionnaire

Tax year

July 1

to June 30

* Note: ORS 308A.071(2)(b) waives the income requirement on

any acres each year which meet any of the criteria for “current

employment,” under ORS 308A.056(3) and land not exceeding 1 acre

used as a homestead.

January 1

ORS 308A.062 (EFU)

ORS 308A.068 (non-EFU)

Farm use qualification

Land must be qualified

as of the January 1

assessment date each

year. (EFU & non-EFU)

ORS 308A.077 Non-EFU application (April 1)

ORS 308A.074 Non-EFU wasteland

— Annual application (April 15)

ORS 308A.253 Non-EFU homesite

— Annual application (April 15)

6-24 150-303-422 (Rev. 11-07-22)

Counter questions

You need to clarify what information the taxpayer

needs. Many taxpayers will describe their situation

and use terms that are not consistent with current law

or procedures. It is important to communicate with the

taxpayer so you understand what the important issues

are. Many conversations start off in one direction only

to find out that the real issues are something else. It is

important to verify the details of every situation until

you are satisfied you have identified all of the issues

related to their question.

Before answering a question, narrow the question

down so that you know what type of special assess-

ment the owner is inquiring about. For instance, if it’s

a farm use question you need to know if the land is

all EFU or all non-EFU or a mix of EFU and non-EFU.

The farm may also have portions that are under for-

estland special assessment or wildlife habitat etc. Each

program has its own statutes and though they may be

similar, they all have differences and the land involved

needs to be identified and processed separately.

Often the taxpayer may be anxious because they have

received a notification from the assessor or tax collector,

or are concerned their property taxes will be adversely

affected. You can’t please everyone and sometimes you

can do little to help them. However, it helps if you give

them enough information so they understand their

situation and feel that they are being treated equitably.

The old saying of treating someone else the way you

would like to be treated yourself goes a long way to

defuse most situations.

If you don’t know the answer in most situations you can

research the issue and get back to the taxpayer later. Be

sure to take good notes and obtain enough information

so that you can accurately identify the account, the land

or property involved, and the details of the issue.

This section contains some common counter questions

that you may experience.

These questions are designed to provide basic direc-

tion and are not designed to be all-inclusive. You are

encouraged to study and research current statutes,

administrative rules, information circulars and forms

to build upon these questions.

The answers to these questions will likely develop into

additional questions and dialogue. Read the answers

and be prepared to address any obvious additional

questions.

Special assessments (all programs)

What happens if I purchase specially assessed

property?

• Owners have a responsibility to learn about the spe-

cial assessment program that applies to their prop-

erty. If they wish to continue special assessment they

must keep the land in a qualifying use.

• Provide information circulars, applications, forms,

websites and resource contacts (Appendix C). Explain

some of the basics for the special assessment program

they are inquiring about.

• Explain there is a “potential additional tax” nota-

tion on the assessment roll and on their property tax

statement(s) for properties in special assessment.

• Explain disqualification, change in special assessment

and additional tax consequences for the program.

Can I put part of my land in farm and part in

forest (or something else)?

• Yes, any land on your parcel that meets the qualifi-

cation requirements of a given program may receive

special assessment.

• Special assessment is granted on a per acre basis and

only one special assessment may be granted for the

same land. Special assessments can’t overlap.

How much will I save on my tax bill if I put

land in special assessment?

• Explain that values will be changed from the cur-

rent assessed value on the affected land to a specially

assessed value for the number of acres for each land

class. You can use the last available rate and value

difference to get an approximate answer.

Can I change to a different special

assessment?

• First determine what special assessment program the

land is currently in or has been disqualified from and

which program the owner wants to change to. The

timing of the change should occur so that the owner

has an opportunity to transition from one special

assessment to another without a break in special

assessment.

—If the land is currently under special assessment

inform the owner the land is disqualified for “no

longer in use” in their current special assessment

program when the use changes. Once disqualified,

6-25 150-303-422 (Rev. 11-07-22)

follow the procedure below for a change in special

assessment under ORS 308A.706(1)(d).

—Change in special assessment of disqualified

land under ORS 308A.706(1)(d). If the change is

the result of a disqualification you will need to

have a good understanding of the procedures for

each type of disqualification. The Disqualifica-

tion notification procedures (Appendix F) will

explain timing and procedures. See the “Hexa-

gon diagram” (Appendix F) for possible changes

in special assessment. ORS 308A.724 provides the

statutory timing requirements for a change in spe-

cial assessment following a disqualification. A dis-

qualification notification letter should be in the file.

Review the disqualification notification letter with

the owner to explain the reason and procedure for

the disqualification. If a change in special assess-

ment isn’t possible explain any tax consequences.

The land may be assessed based on market value

or there may be the collection of additional taxes

upon disqualification from special assessment.

ORS 308A.724 specifies that land changing to non-

EFU following a disqualification has five years to

meet both the income and use requirements.

ORS 321.709(2)(d) specifies that land changing to

STF must not have been disqualified from STF

for any of the five tax years preceding the year for

which STF special assessment is sought. However,

there is a requirement that all contiguous forest-

land acquired by an STF owner be placed in the

STF program. In this instance, it is acceptable to

place land disqualified from STF in the previous

five years back into the program.

• Review any information circulars or applications and

forms the owner will need to complete to accomplish

the change in special assessment. If a change isn’t

possible inform the owner of the reasons why the

land can’t qualify.

How much will it cost me to discontinue the

special assessment?

• Determine the program the owner wants to discon-

tinue and address increases in taxable value and

additional taxes.

—EFU: The owner can’t request to remove land from

special assessment in an EFU zone. If the owner

discontinues farming, the land can be disqualified

for “no longer in use” and will be assessed based

on market value. At any time the owner resumes

farming any of the land for profit in a qualifying

use, the land is required to be under farm use spe-

cial assessment.

ORS 308A.706(1)(a) specifies the additional tax

is only collectable for disqualified farmland if

change in use is incompatible with returning the

land to a farm use. Idle land isn’t a change of use

and no additional tax can be collected if the land

isn’t farmed, but remains idle. (See “No Longer in

Use Disqualifications” in the “Disqualification”

section of the Farm Manual for examples of incom-

patible change of use.)

—Non-EFU: If the owner requests the land be

removed from farm use special assessment the

land will be assessed based on market value. The

owner may continue to farm the land for profit.

To requalify the owner will need to submit a new

application.

ORS 308A.706(1)(B) specifies the additional tax is

only collectable for disqualified farmland if the

change in use is incompatible with returning the

land to a farm use. Idle land isn’t a change of use

and no additional tax can be collected if the land

isn’t farmed, but, remains idle.

If the special assessment is being removed due to

recording of a subdivision plat, any portion of the

land may requalify for non-EFU special assess-

ment after paying additional taxes and meeting

the requalification criteria of ORS 308A.116(4).

There is no provision for the owner to change to

a different special assessment. A change to a dif-

ferent special assessment will require the owner

to submit a timely application or claim under the

provisions of the program. This may result in the

valuation of the land based on market value dur-

ing the transition period.

—Designated forestland: If the owner requests the

land to be removed from designated forestland

special assessment the land will be assessed based

on market value and additional taxes will be col-

lected if the land doesn’t change to a different spe-

cial assessment.

—Highest and best use forestland: HBU isn’t a spe-

cial assessment, it is a classification based on an

appraisal decision. There is no option for the

owner to remove this classification. HBU forest-

land doesn’t have additional taxes when the clas-

sification is removed upon determination by the

assessor that the land has a higher and better use

other than forestland.

—Small tract forestland: Once qualified, a small

tract forestland owner may not voluntarily remove

themselves from the STF program. If an owner

changes from STF to another special assessment

or to exempt ownership the difference between the

STF taxes and the taxes imposed as forestland will

be imposed. See the “Additional tax” chapter. If the

6-26 150-303-422 (Rev. 11-07-22)

land is removed from the STF special assessment

and doesn’t change to a different special assess-

ment the land will be assessed based on market

value and the second additional tax for the differ-

ence between 100 percent forestland values and

what it would have otherwise been assessed based

on market value will be collectable if the land isn’t

HBU forestland. For HBU forestland, collect STF

(20% to 100%), however, no additional tax for 100%

to market.

• Additional taxes will be required for land in EFU,

DFL, STF, or open space if an owner is in the pro-

cess of establishing a non-farm dwelling under ORS

215.236.

ORS 215.236(4) doesn’t require disqualification or an

additional tax for any land already in WLH special

assessment at the time the owner is seeking a non-

farm dwelling under ORS 215.236.

ORS 215.236(6) specifies after being disqualified the

landowner may change from EFU, DFL, STF, or open

space to WLH special assessment or conservation

easement special assessment under ORS 308A.450 to

308A.465. Additional taxes for any land qualifying

for a change to WLH special assessment are deferred

under ORS 308A.706(1)(d) or in the case of open space

under ORS 308A.318(4). Additional taxes would be

collected for any portion of the disqualified land not

qualifying for a change to WLH.

• An owner may request to pay additional taxes as

specified in ORS 308A.715 for any land that has been

disqualified.

Why does it say “potential additional tax

liability” on my tax bill or print out?

• This is just a potential lien and isn’t collectable until

an event occurs which would require its collection.

When a property first begins a special assessment

program, the law requires the PAT notation on the

assessment and tax rolls. This is to inform the owner

and general public that a potential collectable lien

may be attached to the property, because the land is

subject to special assessment.

• If the owner wants more information, identify the

program the owner is interested in and address addi-

tional taxes following the “disqualification notifica-

tion procedures” and “information circulars” for the

program.

What happens to the special assessment if I

sell my property?

• If any of the land is EFU, non-EFU farmland, or DFL

the special assessment isn’t affected by the change

of ownership. The special assessment stays with the

land except for:

• If any land is small tract forestland (STF), this

requires the new owner to submit an STF application

for continued qualification. The application must

be received within 30 days of receiving the “notice

of intent to disqualify” letter from the county asses-

sor. If an application for continued qualification

isn’t returned to the assessor within the required 30

days the land will be disqualified from STF. Per ORS

321.719, the land will automatically qualify for desig-

nated forestland or highest and best use forestland

and will revert back to 100 percent forestland values.

Land disqualified won’t be eligible to return to the

STF program for a minimum of five years.

• Highest and best use (HBU) forestland isn’t a spe-

cial assessment, it is an appraisal decision. A sale or

change in ownership by itself isn’t a reason to change

the land from (HBU).

Farm use

What do I have to do to qualify for farm use

special assessment?

First, determine whether any of the land is currently

under a special assessment program. Qualification

statutes are different for land that changes special

assessment from land that isn’t currently in a special

assessment program.

(See “Can I change to a different special assessment?”)

Then determine whether the land is EFU or non-EFU. If

the property has both EFU and non-EFU land, the por-

tions that are EFU will follow EFU statutes and the por-

tions that are non-EFU will follow non-EFU statutes. If

the homesite is physically located on non-EFU land it

must annually qualify by non-EFU application under

ORS 308A.253 even if it is being used in conjunction

with EFU farmland.

(Start with either the EFU or non-EFU information cir-

cular and go over the basics of the program.)

• Exclusive farm use (EFU)—any land zoned as EFU is

assessed for farm use special assessment if the land

is used for a qualifying farm use (no application is

required). Any portion of the parcel that is unused or

doesn’t meet farm use requirements of ORS 308A.056

or 308A.062 won’t qualify.

For EFU land to receive farm use special assessment

on land that isn’t currently in special assessment, the

land must have been in a qualifying farm use in the

previous calendar year. EFU qualification is deter-

mined January 1 each year.

6-27 150-303-422 (Rev. 11-07-22)

• Non-exclusive farm use (non-EFU)—any land in

zones other than exclusive farm use zones requires

an application to receive farm use special assessment.

If any portions of a parcel don’t meet the qualifica-

tion requirements for non-EFU farmland, the owner

can submit a separate application for those portions

in future years when the land can meet qualification

requirements. Any portion of the parcel that won’t be

used for farm use activities won’t qualify. (Go over a

non-EFU application form if the owner is interested.)

Any acres in a parcel that isn’t currently under a spe-

cial assessment program must meet the following

basic criteria to qualify for non-EFU farm use:

1. “Use requirement”—The land must have been in

a qualifying farm use in at least the two previous

calendar years and be in current farm use in the

year of application.

2. “Income requirement”—Any three of the immedi-

ate five prior non-flood or non-drought calendar

years can be used to meet the income qualifica-

tions of ORS 308A.071. The income from one year

can’t be used to qualify income for a different year

(no carry over or averaging income; each year is

determined separately). When determining the

number of acres for the required income amount; a

maximum of one acre may be used for each home-

site and any acres qualifying for current employ-

ment under ORS 308A.056(3) shall not be included

[ORS 308A.071(2)(b)]. The one year of farm inactiv-

ity allowed due to illness isn’t counted as one of

the five years for income determination (OAR 150-

308-1010. If the land was previously farmed within

the past five years (beginning with the year of

application) the previous years of qualifying farm

use can be used to meet the 3 of 5 year income test.

At the time of application don’t go beyond the fifth

non-flood, non-drought year to qualify the land

under the 3 of 5 year income test.

At the time of application if any acres can’t meet both

the use and income requirements the owner will

need to qualify those acres by separate application in

future years.

What is this income test that I have to meet

and how do I meet it?

• The owner must have the intent to make a profit in

money and must meet minimum income require-

ments. The profit and income requirements are deter-

mined from the sale of farm products or services

produced from the land subject to special assessment.

The income test for non-EFU farm use special

assessment is measured in terms of gross profit.

Example: You buy a calf for $300 and sell it at auction

to a buyer for $1,300 your gross profit is $1,000. The

expense of raising a calf to maturity isn’t a consid-

eration. A net profit or return of investment to the

land or improvements isn’t required. (See Everhart

tax court case OTC 4380 11-17-99 for an explanation

of gross profit requirements.)

If the land is six and one half acres or less, the

required gross income must be at least $650. If the

land is more than six and one half but fewer than

30 acres, the required gross income is determined

by calculating the number of acres in qualifying

farm use production (including a fraction of an

acre) times $100. (Example: $25.83 acres x $100 =

$2583 required gross income.) If the land is 30 or

more acres, the required gross income must be at

least $3000.

Any acres qualifying for current employment

under ORS 308A.056(3) including up to one acre

allowed for the homesite area are not required to

be income tested and are not required to produce

farm products or services [ORS 308A.071(2)(b)].

See OAR 150-308-1050 for examples which dem-

onstrate how to determine the number of acres to

be income tested.

Once the required amount of gross income is deter-

mined the entire farm unit can be used to meet the

required income test. (It isn’t required that each

acre produce $100.)

The sale of firewood, timber, farm subsidy pay-

ments, CRP payments, crop insurance payments

etc. don’t qualify as farm products or services and

income from these sources can’t be used in the

farm income test.

Forty-nine percent of the required income amount

can be in the form of personal consumption of

farm products or farm products consumed or used

on the farm. (Review “Owners income” section

of the Application or Gross income questionnaire

with the taxpayer.)

Land owned separately (not all under the same

ownership) requires two income tests as specified

in ORS 308A.071(2)(c). (Review “Rented land use”

section of the Application or Gross income ques-

tionnaire with the taxpayer.)

Is there a minimum acreage requirement to

qualify land for farm use special assessment?

• Land in farm use doesn’t have a minimum acreage

requirement. If the land is EFU there is no minimum

income requirement and a qualifying farm use will

receive special assessment even if the land area is less

than one acre. To meet the minimum gross income

6-28 150-303-422 (Rev. 11-07-22)

requirement of $650 for non-EFU land for a land area

less than one acre will generally require an intensive

farm use practice such as growing nursery stock,

blueberries, orchards, etc.

Do horses (llamas, pigs, snakes, etc.) count as

farming?

• Yes, the use of the land to raise livestock for profit is

a qualifying farm use under ORS 308A.056.

Horses may be raised for sale as livestock. Pasturing

of horses may be considered the feeding of livestock

and the pasture land may qualify for farm use spe-

cial assessment. A property owned or leased and

used for a business that involves pasturing others’

pleasure horses may qualify. Pasturing ones’ own

pleasure horses isn’t a qualifying farm use.

ORS 308A.056 also allows stabling or training horses

(equines), including but not limited to providing rid-

ing lessons, training clinics, and schooling shows.

Stabling involves providing shelter, housing, or stalls

for the horses, such as food or supervision. Boarding

(or care) can be provided in either a pasture or stable

setting. If the boarding care involves housing, it can

qualify as stabling. If the boarding involves care in a

pasture setting, it can qualify as feeding of livestock.

Snakes and pigs would likely be raised within a

building(s). The land under the building would

qualify for farm use special assessment based on the

classification of the land for farm use. If there is addi-

tional land outside the building area any acres not in

a qualifying farm use won’t qualify. Only acres in a

qualifying use can receive special assessment.

Note: The raising of reptiles (snakes) may be ques-

tionable since they are not specifically identified as

a farm use and raising snakes isn’t a common farm

use practice. If they are raising the snakes for sale to

food processors, restaurants, pet shops, zoos, exhib-

its, medical labs, etc. this may be in line with the rais-

ing and selling of livestock and may qualify. Snakes,

raised as part of a retail operation, would be more

questionable. Anytime you have a questionable farm

use, the assessor can deny it and let the tax court

decide if the owner appeals the denial.

Portions of my land are too wet all winter for

pasturing. Can I still have those portions in

farm deferral?

• Yes, the land is only required to be used when it is

capable of farm production. As long as the land isn’t

being underutilized it will qualify.

Do timber and firewood count as farm sales?

• The sale of forest products generally don’t count as

the sale of a farm product for meeting the income

requirements or intent to make a profit from a farm

use act ivity.

Note: If non-EFU farmland has been disqualified

for not meeting farm income requirements there is

a special provision to allow abatement of additional

tax under ORS 308A.119 for the growing of forest

products.

• If the land is being employed to raise forest products

inform the owner they may qualify the land for for-

estland special assessment.

• Firewood isn’t a farm product. Up to 20 acres can be

identified for farm use special assessment as a wood-

lot. ORS 308A.056(3)(h) identifies woodlots as being

currently employed and doesn’t require the wood-

lot acres to produce any farm income. Income from

the sale of wood products can’t be used to meet farm

income or intent for profit requirements.

Forestland

What do I have to do to qualify for forestland

special assessment?

• Designated forestland—To qualify, the area to be

designated must be at least 2 contiguous acres in one

ownership. If the owner meets the minimum acreage

qualifications, provide the owner an application. Go

over the details of the required application.

• Small tract forestland—First determine if the owner

has or will have a minimum of 10 acres of quali-

fied forestland, but less than 5,000 acres of qualified

forestland in common ownership in Oregon. If the

owner meets the acreage qualifications then discuss

the application requirements. If the land isn’t already

under designated forestland provide the owner with

an application for designated forestland and an

STF application. Go over the details of the required

application(s) with the owner.

• Highest and best use forestland—Any land classified

as HBU is assessed as forestland. No application is

necessary. HBU forestland isn’t a special assessment;

it is an appraisal decision.

If I have forestland, what sort of activity do

I have to notify the Oregon Department of

Forestry (ODF) of?

The ODF requires notification for most forest opera-

tions, including:

• Harvesting (including commercial thinning).

6-29 150-303-422 (Rev. 11-07-22)

• Disposal or treatment of slash (including prescribed

burning).

• Site preparation for planting (including application of

herbicides).

• Pre-commercial thinning to reduce overstocked

stands.

• Stand maintenance (including chemical application

for pest control).

• Road construction and maintenance.

Direct the landowner to contact their local ODF office

for more information.

I have 10 acres of Christmas trees that I am

not going to harvest. Can I convert these

acres to forestland?

• A landowner may make an application for designated

forestland on property that may be under another

special assessment. Christmas tree plantings are

often planted at high densities and will likely meet

the minimum stocking requirements. However, field

confirmation is required.

• Some tree species planted for Christmas trees may

not be suitable for timber production and would

therefore not meet stocking requirements. See “Land

supporting Christmas trees” in the “Special provi-

sions” chapter.

• Become familiar with the suitable reforestation tree

species in your area, or contact the local ODF stew-

ardship forester for more information.

How many trees per acre are needed to

qualify for forestland?

• Most land in western Oregon requires the minimum

seedling equivalent to be 200 trees per acre for cubic

foot site productivity classes I, II, and III.

• Most land in eastern Oregon requires the minimum

seedling equivalent to be 100 trees per acre for cubic

foot productivity site class VI.

• Refer to Table 2, page 2-10 for more details.

What happens when the trees are thinned/

harvested?

• Taxes on harvested timber must be reported and paid

to the Oregon Department of Revenue:

1. Severance tax—Applies to the harvest of timber

from any land specially assessed as STF.

2. Forest Products harvest tax (FPHT)—Applies to

any timber harvested in Oregon, except for tim-

ber harvested from Indian reservation lands.

• To continue forestland special assessment, the land-

owner must take action to ensure that the land con-

tinues to meet the minimum stocking requirements.

Note: Prior to harvesting, you must notify the Oregon

Department of Forestry. See “Resource contacts” in

Appendix E.

Homesite

Can I build a house on my forestland?

• Receiving approval to establish a forestland dwelling

can be a very complicated process that will require

the landowner to gather information from several

sources. Direct the landowner to the contact the

county planning department for requirements to

establish a dwelling on land zoned for forest use.

• If the lot or parcel is more than 10 acres in western

Oregon, or 30 acres in eastern Oregon, the landowner

will have to conduct a stocking survey and submit it

to the assessor as one of the criteria for approval.

• The assessor is responsible for verifying that the min-

imum stocking requirements have been meet (ORS

215.730). See the “Qualification” chapter, section 2D5.

I have forestland. Can my homesite also get a

special assessment?

• The parcel the homesite is located on needs to have

at least 10.01 acres of qualified forestland in addition

to the area of the homesite. The homesite area can be

less than an acre or more than an acre. No application

is require for a qualifying homesite.

Reminder: Only forest homesites in the following

zones can qualify:

1. EFU.

2. Forest.

3. Farm and forest mixed.

Homesites in rural residential, commercial, indus-

trial zones, etc. don’t meet the criteria and these

homesites can’t qualify for forestland homesite spe-

cial assessment.

I have farmland. Can my homesite also get a

special assessment?

• EFU homesites used in conjunction with qualifying

farm use land will receive homesite special assess-

ment. (No application is required.)

6-30 150-303-422 (Rev. 11-07-22)

• Non-EFU homesites used in conjunction with quali-

fying farm use land will receive homesite special

assessment by a separate application as specified in

ORS 308A.253. Non-EFU homesites rarely qualify

because most owners don’t receive more than one-

half of their personal adjusted gross income from

farming. If land is owned by husband and wife, both

personal incomes are added together. Because of

the strict personal income requirements of non-EFU

homesites, most qualifying homesites will be home-

sites on EFU land.

What is a non-farm dwelling? …parcel?

• Non-farm dwellings that affect special assessments

are land use decisions under ORS 215.236 that occur

only in EFU zones. Land use decisions for the estab-

lishment of dwellings are regulated by the local

planning department. To gain final approval for

establishing a non-farm dwelling under ORS 215.236

requires any land, in the parcel the non-farm dwell-

ing is located on, to be disqualified and additional

taxes paid for the following special assessment

programs:

— EFU.

— Open space.

— DFL (eastern Oregon or western Oregon).

— STF.

To requalify the parcel for special assessment in the

any of the above programs, ORS 215.236(5) requires

an entire contiguous lot or parcel to be combined with

the property that is subject to ORS 215.236. A lot line

adjustment is a portion of a parcel and won’t requal-

ify the property. Combining a contiguous lot or parcel

that is also subject to ORS 215.236 won’t requalify the

property.

The following only applies to counties that allow

wildlife habitat (WLH):

An owner may elect to change from one of the above

special assessments to WLH special assessment and

defer additional taxes under ORS 308A.706(1)(d) or if

open space 308A.418(4). ORS 215.236 doesn’t require dis-

qualification of any land already under WLH special

assessment. Land subject to ORS 215.236 may qualify

for WLH special assessment at any time. Land subject

to ORS 215.236 that is disqualified from WLH may not

change to any of the above special assessments until

ORS 215.236(5) is satisfied.

6-31 150-303-422 (Rev. 11-07-22)

Appendix C: Forms and publications

Special assessment forms ...................................................................................................... 6-32

Assessment of Farmland in an Exclusive Farm Use Zone ........................................................ 6-33

Assessment of Farmland Not in an Exclusive Farm Use Zone ................................................. 6-35

Application for Special Assessment of Farmland Not in an Exclusive Farm Use Zone ............ 6-37

Farm Use Income Questionnaire of Farmland Not in an Exclusive Farm Use Zone ................ 6-39

Confidential Application for Farm Use Assessment of Land

Under Farm-Use Dwellings and Wasteland ............................................................................. 6-41

Application to Include Additional Non-Exclusive Farm Use Land

to an Existing Farm Use Parcel ................................................................................................. 6-43

Taxpayer Information Authorization and Power Of Attorney To Represent ............................ 6-46

6-32 150-303-422 (Rev. 11-07-22)

Special assessment forms and publications

Program Name Number

Farm Farm Use Manual 150-303-422

Farm Application for conservation Easement Special Assessment 150-303-087

Farm Certification for Continued Qualification of Conservation Easement

Special Assissment

150-303-089

Farm Assessment of Farmland in an Exclusive Farm-Use Zone

(information circular)

150-303-644

Farm Assessment of Farmland Not in an Exclusive Farm-Use Zone

(information circular)

150-303-645

Farm Application for Special Assessment of Farmland Not in an Exclusive

Farm Use Zone

No number

(county form)

Farm Farm Use Income Questionnaire of Farmland Not in an Exclusive

Farm Use Zone

No number

(county form)

Farm Confidential Application for Farm-Use Assessment of Land Under

Farm-Use Dwellings and Wasteland

150-310-068

(county form)

Farm Application to Include Additional Non-Exclusive Farm Use Land to

an Existing Farm Use Parcel

150-303-043

Forest Forestland Manual 150-303-424

Forest Application for Designation of Land as Forestland 150-309-024

Forest Application for Small Tract Forestland (STF Option) 150-390-001

Wildlife habitat Application for Wildlife Habitat Conservation and Management

Special Assessment

150-303-083

Open space Application for Special Assessment of Open Space Land 150-310-106

Riparian lands Application for Property Tax Exemption Riparian Lands 150-310-114

Taxpayer

disclosure

Tax Information Authorization and Power of Attorney Representation 150-800-005

Current and revised Department of Revenue forms and publications can be found at: www.oregon.gov/dor.

6-33 150-303-422 (Rev. 11-07-22)

APPLICATION FOR

CONSERVATION EASEMENT

SPECIAL AS SESS MENT

as provided by Chapter 809, Oregon Laws 2007

FOR ASSESSOR’S USE ONLY

Approved Denied

Date:

Instructions

• Your application must be ﬁ led with the county assessor by April 1.

• General information is located on the back of this form.

• Include a copy of your complete conservation easement as ﬁ led with the county records clerk.

• Include the Preliminary Application for Conservation Easement Special Assessment form.

• Include an application fee of $250. Received by: ______________ Date: ______________

Filed with the ____________________________________ County Assessor for the tax year beginning July 1, 20______.

By:

Comments

Date Received

DESCRIPTION OF PROPERTY

OWNER AND HOLDER CONTACT INFORMATION—PLEASE PRINT

Fill in the boxes below to show the property you want to have specially assessed under the conservation easement program. If you are

applying for a portion of the land described, please indicate the area by providing a sketch below.

150-303-087 (12-07)

Assessor’s Account Number Map and Tax Lot or Parcel Number Acres Applied For Total Account Acres

Total Acres Applied For:

DESCRIPTION OF LAND REQUESTED FOR CONSERVATION EASEMENT SPECIAL ASSESSMENT

Sketch a diagram of the tax lot(s) and shade in the area for which you are applying. See the example shown below. Include placement

of structures, roads, creeks, etc. Attach a separate page if necessary.

DECLARATION

As owner of the above described land, I indicate by my signature that I am aware of the potential tax liability calculated under ORS 308A.700 to 308A.733

if the land ceases to be specially assessed under the conservation easement program. I declare under the penalties for false swearing [ORS 305.990(4)]

that I have examined this document (and any accompanying documents), and to the best of my knowledge, it is true, correct, and com plete.

Applicant’s Signature Date

1700

1800

1900

House

Fir Creek

Timber Road

Example

Telephone Numbers

Daytime:

( )

Daytime: ( )

Evening: ( )

City

Mailing Address

Holder Name

Mailing Address

Owner Name

State

ZIP Code

Currently Specially Assessed?

Yes No

Zoning?

6-34 150-303-422 (Rev. 11-07-22)

PRELIMINARY APPLICATION FOR

CONSERVATION EASEMENT SPECIAL ASSESSMENT

as provided by Chapter 809, Oregon Laws 2007

EASEMENT RECORDING

WRITTEN CERTIFICATION

Section 3(2)(b), Chapter 809, Oregon Laws 2007, require the conservation easement in perpetuity be recorded in the records of the clerk

of the county in which the land is located.

Document recording number: ____________________________________

Section 3(2)(a), Chapter 809, Oregon Laws 2007, states “The terms of the conservation easement must be capable of meeting the re-

quirements for being considered exclusively for conservation purposes under section 170(h) of the Internal Revenue Code if the land or

easement were ever to be the subject of a contribution...”

Section 3(2)(c), Chapter 809, Oregon Laws 2007, states “A written certiﬁ cation must be ﬁ led with the county assessor stating that the

conservation easement satisﬁ es the requirements of paragraph (a) of this subsection. The certiﬁ cation must be ﬁ led by:

(A) The owner of the land...or (B) The holder...”

150-303-087 (12-07)

Owner of Land

Holder

I (owner of the land) __________________________________________________ (please print) indicate by my signature that a deduction has

been claimed for federal income tax purposes under section 170(h) of the Internal Revenue Code for a qualiﬁ ed conservation contribution

with respect to the conservation easement.

I (holder) __________________________________________________ (please print) indicate by my signature this is a qualiﬁ ed organization

as deﬁ ned in Oregon Revised Statute (ORS) 271.715(3), and additionally if the organization is charitable, it is in good standing and meets

the terms of a qualiﬁ ed organization of the Internal Revenue Code 26 USCS, section 170(h), and that the terms of the conservation ease-

ment are capable of meeting the requirements for being considered exclusively for conservation purposes under section 170(h) of the

Internal Revenue Code if the easement were ever to be the subject of a contribution.

If the holder is a charitable organization, the county assessor may request articles of incorporation and bylaws be presented with the

application.

Owner’s Signature

Organization

Position (or title) in organization

Signature

6-35 150-303-422 (Rev. 11-07-22)

Certiﬁ cation for Continued Qualiﬁ cation of

Conservation Easement Special Assessment

As required by ORS 308A.465

EASEMENT RECORDING

Oregon Revised Statute (ORS) 308A.453(2)(b), requires the conservation easement in perpetuity be

recorded in the records of the clerk of the county in which the land is located.

Document recording number(s): _________________________________________________________________

(Attach recorded copies of all modifications to the terms of the conservation easement, new holders, or holder transfers.)

WRITTEN CERTIFICATION

ORS 308A.453(2)(a) states “The terms of the conservation easement must be capable of meeting the

requirements for being considered exclusively for conservation purposes under section 170(h) of the

Internal Revenue Code if the land or easement were ever to be the subject of a contribution...”

ORS 308A.465(2)(a), states “Every three years, or more frequently if requested in writing by the county

assessor, the holder shall provide written certification to the county assessor that the land is being

managed in accordance with the terms of the conservation easement to which the land is subject and

that the conservation easement continues to meet the requirements of ORS 308A.453(2)(a).”

Holder

I (holder) ___________________________________________________________

(please print) indicate by my

signature this is a qualified organization as defined in ORS 271.715(3), and additionally if the organization

is charitable, it is in good standing and meets the terms of a qualified organization of the Internal

Revenue Code (IRC) 26 USCS, section 170(h), and that the terms of the conservation easement are

capable of meeting the requirements for being considered exclusively for conservation purposes under

section 170(h) of the IRC if the easement were ever to be the subject of a contribution. As required under

ORS 308A.465(3), if the landowner has claimed a federal income tax deduction under section 170(h) of

the IRC the claim has not been disallowed.

If the holder is a charitable organization, the county assessor may request that articles of incorporation,

bylaws, and evidence the organization is qualified under section 170(h) of the IRC be presented with the

certification.

150-303-089 (Rev. 02-14)

Signature

Date signed

Position (or title) in organization

Organization

6-36 150-303-422 (Rev. 11-07-22)

150-303-644 (Rev. 03-14)

Information circular March 2014

Assessment of Farmland

in an Exclusive Farm-Use Zone

This information circular explains farm-use assess-

ments on farmland in an exclusive farm-use (EFU)

zone. If you are not sure if your land is within a

farm-use zone, check with your planning ofce or

your county assessor’s ofce. For information about

farm-use assessment on land not in an EFU zone, see

the information circular, “Assessment of Farmland

Not in an Exclusive Farm-Use Zone,” 150-303-645, at

www.oregon.gov/dor or write: Publications, Oregon

Department of Revenue, 955 Center Street NE, Salem

OR 97301-2555.

What land qualies for farm-use assessment?

If land is in an EFU zone and is used primarily to

make a prot by farming, it qualies for special

farm-use assessment. The qualication of farmland

for special assessment is determined as of January 1.

To qualify, your land must currently be used, and

have been used in the previous year exclusively for

farm use (see farm use denition below).

Farm use dened

Oregon Revised Statute 308A.056 denes “farm use”

in part, as follows:

As used in ORS 308A.050 to 308A.128, “farm use”

means the current employment of land for the pri-

mary purpose of obtaining a prot in money by:

• Raising, harvesting, and selling crops;

• Feeding, breeding, managing or selling livestock,

poultry, fur-bearing animals or honeybees or the

produce thereof;

• Dairying and selling dairy products.

• Stabling or training equines, including but not

limited to providing riding lessons, training clinics

and schooling shows;

• Propagating, cultivating, maintaining or

harvesting aquatic species and bird and animal

species to the extent allowed by the rules adopted

by the State Fish and Wildlife Commission;

• On-site constructing and maintaining equipment

and facilities used for the activities described in

this subsection;

• Preparing, storing or disposing of, by marketing,

donation to a local food bank or school or

otherwise, the products or by-products raised for

human or animal use on land described in this

section;

• Implementing a remediation plan previously

presented to the assessor for the county in which

the land that is the subject of the plan is located;

• Using land described in this section for any

other agricultural or horticultural use or animal

husbandry or any combination thereof.

Farm use may also include:

• Water impoundments lying in or adjacent to and

in common ownership with the farm-use land;

• A woodlot, not to exceed 20 acres, contiguous to

and owned by the owner of the farm-use land;

• Wastelands, dry or covered with water, neither

economically tillable nor grazeable, lying in or

adjacent to, and in common ownership with the

farm-use land;

• Land under farm related buildings and certain

processing facilities.

Land under dwellings and on-site developments to

the homesite used in conjunction with the farming

operation receives a special valuation.

The farming activity needs to be in accordance with

an “accepted farming practice,” which means the

farming is conducted in a “mode of operation that

is common to farms of a similar nature, necessary

for the operation of such farms to obtain a prot in

money, and customarily utilized in conjunction with

farm use.”

“Accepted farming practice “ varies widely depend-

ing on the farming activity being conducted and

(over)

6-37 150-303-422 (Rev. 11-07-22)

150-303-644 (Rev. 03-14)

geographical differences. An excellent source of in-

formation is the county’s Oregon State University

Extension Service.

How farm-use specially assessed value (SAV)

is determined

Farm-use value for each land class is determined us-

ing an income method. Using this approach, the as-

sessor must determine the capitalization rate and the

net income per acre of farmland. The net income is

the typical gross annual return (farmland rent), mi-

nus typical expenses. The capitalization rate is the

ve-year average Farm Credit Services mortgage

rate, plus the local property tax rate. When the net

income per acre is divided by the capitalization rate,

the result is the farm-use value per acre of farmland.

Farm use land assessment

Land receiving farm-use special assessment will be

assessed for each land class on the lesser of the spe-

cially assessed value (SAV), described above, or max-

imum specially assessed value (MSAV). The MSAV

for each land class is the prior year’s assessed value

increased by 3 percent or the prior year’s MSAV,

which ever is greater.

Disqualication from special assessment

Farmland will be disqualied from special assess-

ment for any of the following reasons:

• It is no longer used as farmland;

• The land is removed from an exclusive farm-use

zone; or

• Approval is given for a nonfarm dwelling or

parcel.

If your land is disqualied from farm-use special

assessment, it may qualify for special assessment

as Forestland or Wildlife Habitat. Check with your

county assessor for more information about chang-

ing special assessments.

Additional taxes levied against disqualied

farmland

If your farmland loses its special assessment, it will

be assessed at the lesser of its market value or maxi-

mum assessed value and you may be assessed an ad-

ditional tax.

The additional tax is based on the difference between

the tax you paid and the tax you would have been

paying if your land had not received the farm-use

special assessment. This tax difference is based on

the number of years the land received farm-use as-

sessment, up to a maximum of 10 years. If the land is

located within an urban growth boundary, the maxi-

mum is ve years.

You will be assessed an additional tax if your farm-

land is disqualied and you:

• Change the use of the land to be incompatible

with returning it to a farm use (see note below);

• Request and receive a change to a zone that is not

an exclusive farm-use zone; or

• Receive approval for a nonfarm dwelling or parcel.

The additional taxes will be added to the next tax roll

if you decide not to prepay them.

Note: If your land is disqualied because it is no lon-

ger used for farming and you use it for a purpose

that is compatible with its return to farm-use, the ad-

ditional tax will remain a notation to the assessment

and tax rolls as a “potential additional tax.” This po-

tential additional tax must be paid if, sometime in

the future, the land is used for something incompat-

ible with farm-use.

Have questions? Need help?

General tax information .......... www.oregon.gov/dor

Salem .................................................... 503-378-4988

Toll-free from an Oregon prex ..... 1-800-356-4222

Asistencia en español:

En Salem o fuera de Oregon ............. 503-378-4988

Gratis de prejo de Oregon ............ 1-800-356-4222

TTY (hearing or speech impaired; machine only):

Salem area or outside Oregon........... 503-945-8617

Toll-free from an Oregon prex ..... 1-800-886-7204

Americans with Disabilities Act (ADA): Call one of the

help numbers above for information in alternative

formats.

6-38 150-303-422 (Rev. 11-07-22)

150-303-645 (Rev. 03-14)

Information circular March 2014

Assessment of Farmland Not in

an Exclusive Farm-Use Zone

(over)

This information circular explains farm-use assess-

ments on farmland that is not in an exclusive farm-

use (EFU) zone. If you are not sure in what zone your

land is located, check with your local planning of-

fice or your county assessor’s office. For information

about farm-use assessment on land in an EFU zone,

see the information circular, “Assessment of Farm-

land in an Exclusive Farm-Use Zone,” 150-303-644.

Write: Publications, Oregon Department of Revenue,

955 Center Street, NE, Salem OR 97301-2555.

What land qualifies for farm-use assessment?

If land is not in an EFU zone but is used as farmland,

it may receive the same assessment given to all quali-

fying EFU farmland. The qualification of farmland

to special assessment is determined as of January 1.

To qualify, you must file an application with your

county assessor on or before April 1 of the first year

you desire special assessment. Additionally, the land

must meet these standards:

• Your land must be currently used, and have been

used, for the two previous years exclusively for

farm use (see farm use de nition), and

• Your land must meet the income requirement in three

of the  ve previous years (see Income requirement).

Owners and lessees of farmland must file a Schedule

F showing farm income and, if applicable, a schedule

showing rental income with their excise or person-

al income tax return to qualify for farm-use special

assessment.

Farm use defined

Oregon Revised Statute 308A.056 defines “farm use”

in part, as follows:

“Farm use” means the current employment of land

for the primary purpose of obtaining a profit in

money by:

• Raising, harvesting, and selling crops;

• Feeding, breeding, management, and sale of, or

the production of, livestock, poultry, fur-bearing

animals, or honeybees;

• Dairying and selling dairy products;

• Stabling or training equines;

• Propagation, cultivation, maintenance, and

harvesting of aquatic, bird, and animal species

allowed by rules adopted by the State Fish and

Wildlife Commission;

• Preparation, storage, and disposal by marketing,

donation to a local food bank or school or

otherwise, of the products or by-products raised

on such land for human and animal use;

• Any other agricultural or horticultural use, animal

husbandry, or any combination thereof; or

• Growing cultured Christmas trees and hybrid

hardwoods (cottonwoods) on cropland under

intensive cultivation.

Farm use may also include:

• Water impoundments lying in or adjacent to and

in common ownership with farm-use land;

• A woodlot, not to exceed 20 acres, contiguous to

and owned by the owner of the farm-use land;

• Wasteland and land under dwellings (including

dwelling on-site improvements) used in

conjunction with the farm may also receive a

special valuation if:

1. The farm unit produces over one-half of the

adjusted gross personal income the owner(s)

receives; and

2. You  le an application on or before April 15

each year with the county assessor.

• Land under farm related buildings.

Note: Land under buildings used as processing facil-

ities greater than 10,000 square feet of floor area, that

are not an accepted farming practice, do not qualify

for farm use special assessment.

The farm use activity needs to be in accordance with an

“accepted farming practice,” which means the farming

is conducted in a “mode of operation that is common

to farms of a similar nature, necessary for the opera-

tion of such farms to obtain a profit in money, and cus-

tomarily utilized in conjunction with farm use.”

“Accepted farming practice “ varies widely depending

on the farming activity being conducted and geograph-

ical differences. An excellent source of information is

the county’s Oregon State University Extension Service.

6-39 150-303-422 (Rev. 11-07-22)

150-303-645 (Rev. 03-14)

Income requirement

If the land is six and one half acres or less, your gross

income from the farm use must be at least $650. If

the land is more than six and one half but fewer than

30 acres, your gross income from the farm use must

be $100 multiplied by the number of acres. A frac-

tion of an acre should be applied as a percentage in

the calculation of the gross income requirement. (Ex-

ample: 25.83 acres x $100 = $2,583 gross income.) If

the land is 30 or more acres, your gross income from

the farm must be at least $3,000. If your land is leased

for farming to someone else, check with your county

assessor for additional income requirements.

Up to 49 percent of the gross income can include the

value of crop or livestock personally consumed by

the owner or the farming operation. Accurate records

are required as the burden of proof is on the owner.

An appeal from a decision of the assessor concerning

denial of an application for special assessment is made

directly to the Magistrate Division of the Tax Court

under ORS 305.275(1)(a)(C). Check with your county

assessor as other appeal rights may be available.

How farm use specially assessed value (SAV)

is determined

Farm-use value for each land class is determined us-

ing an income method. Using this approach, the as-

sessor must determine the capitalization rate and the

net income per acre of farmland. The net income is

the typical gross annual return (farmland rent), mi-

nus typical expenses. The capitalization rate is the

five-year average Farm Credit Services mortgage

rate, plus the local property tax rate. When the net

income per acre is divided by the capitalization rate,

the result is the farm-use value per acre of farmland.

Farm-use land assessment

Land receiving farm-use special assessment will be

assessed for each land class on the lesser of the spe-

cially assessed value (SAV), described above, or max-

imum specially assessed value (MSAV). The MSAV

for each land class is the prior year’s assessed value

increased by 3 percent or the prior year’s MSAV,

which ever is greater.

Disqualification from special assessment

Farmland will be disqualified from special assess-

ment for any of the following reasons:

You notify the assessor in writing to remove the land

from special assessment:

• You sell or transfer your land to any ownership

making it exempt from property tax;

• You no longer use your land as farmland;

• Your land is platted for subdivision. (This land may

requalify for special assessment after payment of

the additional tax.); or

• Your land does not meet the income test.

If your land is disqualified from farm-use special

assessment, it may qualify for special assessment

as Forestland or Wildlife Habitat. Check with your

county assessor for more information about chang-

ing special assessments.

Additional taxes levied against disqualified

farmland

If your farmland loses its special assessment, it will

be assessed at the lesser of its market value or maxi-

mum assessed value and you may be assessed an ad-

ditional tax.

The additional tax is based on the difference between

the tax you paid and the tax you would have been

paying if your land had not received the farm-use

special assessment. This tax difference is based on

the number of years the land received farm-use as-

sessment, up to a maximum of five years.

You will be assessed an additional tax if your farm-

land is disqualified and you:

• Transfer the land to an ownership that makes the

land exempt from property tax.

• Change the use of the land to be incompatible

with returning it to a farm use (see note below); or

• Subdivide the property.

These additional taxes are added to the next tax roll

if you choose not to pre-pay them.

Note: If your land is disqualified because it is no lon-

ger used for farming, and you use it for a purpose

that is compatible with its return to farm use, the ad-

ditional tax will remain a “potential additional tax.”

This potential additional tax must be paid if, some-

time in the future, the land is used for something in-

compatible with farm-use.

If your land is disqualified because it does not meet

the income test, but you continue to farm the land,

then for each year you farm your land, one year of

potential additional tax will be abated (eliminated).

You may abate the number of years your land re-

ceived farm-use assessment up to the maximum of

five years until there are no potential additional tax

years remaining.

Have questions? Need help?

General tax information .......... www.oregon.gov/dor

Salem .................................................... 503-378-4988

Toll-free from an Oregon prefix ..... 1-800-356-4222

Asistencia en español:

En Salem o fuera de Oregon ............. 503-378-4988

Gratis de prefijo de Oregon ............ 1-800-356-4222

TTY (hearing or speech impaired; machine only):

Salem area or outside Oregon........... 503-945-8617

Toll-free from an Oregon prefix ..... 1-800-886-7204

Americans with Disabilities Act (ADA): Call one of the help

numbers above for information in alternative formats.

6-40 150-303-422 (Rev. 11-07-22)

Non-EFU Application.doc Revised 2-7-03

APPLICATION FOR SPECIAL ASSESSMENT _________________ COUNTY, OREGON

For Special Assessment of Non-EFU Farmland As Defined Under ORS 308A.050 – 308A.128

* * * An application must be filed on or before April 1 of the first year in which assessment is requested * * *

OWNER, ACCOUNT(S) AND PROPERTY USE INFORMATION

THIS SPACE FOR ASSESSORS USE ONLY

ENTER YOUR NAME AND ADDRESS BELOW

(Applicant MUST have an ownership interest in the property)

Date Received:

 Approved

 Denied

Clerk:

JV No.:

PROPERTY DESCRIPTION ( List all properties in your farm unit )

Tax Code

Area

Account

Numbers Map & Tax Lot Numbers

Total

Acreage

Acres Applied

for special

assessment

NOTICE: A YEARLY EXCISE OR INCOME TAX RETURN MUST BE FILED WITH THE DEPARTMENT OF

REVENUE BY THE FARMLAND OWNER OR THE OPERATOR OF THE FARM UNIT (ORS 308A.071).

If this box is checked submit a copy of a “Schedule F” for each year listed below.

OWNERS LAND USE

• Do not record any acres you rented to a farm operator. Record those acres in the RENTED LAND USE section.

•

Please indicate below the number of acres used per land type, for the years shown.

•

Total acres identified above must be accounted for below or in the rented land use section.

•

“All years” below must be completed regardless of whether or not you owned the property.

FARMED ACRES

OTHER ACRES

YEAR

IRRIGATED

Cropland

Pasture,

Mature

Orchards,

Hybrid Poplars

# of Acres

NON-

IRRIGATED

Cropland,

Pasture,

Mature

Orchards,

Christmas

Trees, Hybrid

Poplars

# of Acres

IMMATURE

Orchards,

Perennials,

Christmas

Trees, Hybrid

Poplars

# of Acres

LAND

UNDER

FARM

BLDGS.

# of Acres

FARM

WOODLOT

(20 acres Max.)

Submit

mapped

location

# of Acres

HOMESITE

# of Acres

FORESTED LAND

NOT IDENTIFIED

AS WOODLOT

Include any acres

specially assessed

as forestland here

# of Acres

LAND

NOT

FARMED

Submit

mapped

location

# of Acres

TOTAL

ACRES

XXXX

6-41 150-303-422 (Rev. 11-07-22)

Non-EFU Application.doc Revised 2-7-03

Complete this section for any acres you farmed yourself.

• If you leased or crop-shared, complete those acres in the RENTED LAND USE section.

• Please indicate below the farm products and gross income you received (in $) for each of the years indicated from farm

activity on your land that you farmed yourself

(acres not leased, rented or share-cropped with a farm operator).

• You must deduct

the original purchase price from the gross sale price of any livestock sold.

FARM PRODUCTS SOLD

(must be at least 51% or required gross income)

FARM PRODUCTS CONSUMED

(no more than 49% of required gross income)

TOTALS

YEAR

WHAT CROP,

LIVESTOCK or

SERVICE WAS

SOLD?

No firewood or

timber sales

QUANTITY

SOLD

TOTAL

GROSS

RECEIPTS

(IN $) FOR

SALES OR

SERVICES

WHAT WAS

CONSUMED

OR USED ON

THE FARM?

No Firewood

or timber

QUANTITY

USED

TOTAL VALUE

(IN $) OF

PERSONAL

CONSUMPTION

TOTAL VALUE

(IN $) OF SALES,

SERVICES

AND PERSONAL

CONSUMPTION

XXXX

IMPORTANT: The owner or the farm operator may return the “RENTED LAND USE” information below. If the farm operator

completes the “RENTED LAND USE” information make a copy of the application (front and back) for the farm operator to complete.

Both the signed and dated

“original” and the farm operator “copy” must be submitted to the Assessor no later than April 1.

RENTED LAND USE: Complete this section for any acres you leased or crop-shared to a farm operator.

• Do not record

any acres you farmed yourself. Record those acres in the OWNERS LAND USE section.

• ORS 308A.071 requires separate testing for any land

that you leased, rented or crop shared with a farm operator.

• You must deduct

the original purchase price from the gross sale price of livestock sold FOR BOTH TESTS.

TEST # 1: FARM OPERATOR’S

INCOME INFORMATION

(ALL LAND THE OPERATOR OWNS OR LEASES)

TEST # 2: INCOME INFORMATION

FOR LAND YOU LEASED TO A FARM OPERATOR

YEAR

TOTAL ACRES IN

FARM OPERATOR’S

ENTIRE FARM

OPERATION

(Owned or Leased)

Farmland only

IS FARM

OPERATOR’S ENTIRE

GROSS INCOME

MORE THAN $ 3,000

FROM FARMING?

IF “NO” PROVIDE

AMOUNT (IN $)

No firewood or

timber sales

TOTAL

ACRES

LEASED

Farmland only

CASH RENT

(IN $)

PAID TO

YOU

Farmland only

NET

CROP SHARE

(IN $)

YOUR SHARE

Farmland only

FARM

OPERATORS

GROSS INCOME

(IN $) FROM

FARM SALES OR

SERVICES ON

JUST YOUR LAND

No firewood or

Timber sales

XXXX

YES  NO $_________

XXXX

YES  NO $ ________

XXXX

YES  NO $ ________

XXXX

YES  NO $ ________

XXXX

YES  NO $ ________

(required)

FARM OPERATOR NAME ____________________________ PHONE NUMBER’S _______________________

DECLARATION : I declare under the penalties for false swearing as contained in ORS 305.990(4), that I have

examined this document, including any attachments, and to the best of my knowledge it is true, correct and complete.

(Owner must sign to be valid) (required)

SIGNATURE OF OWNER: ____________________Day Phone No._______________ DATE: _________

6-42 150-303-422 (Rev. 11-07-22)

Gross Income Questionnaire.doc Revised 2-7-03

GROSS INCOME QUESTIONNAIRE FOR _________________ COUNTY, OREGON

For Special Assessment of Non-EFU Farmland As Defined Under ORS 308A.050 – 308A.128

* * * To avoid possible disqualification, submit completed forms NO LATER THAN APRIL 15 * * *

Note: Income questionnaires returned after April 15 may result in a maximum $250 late fee ORS 308A.089

Owner, Account(s) and Property Use Information

Name and Address: Return this Questionnaire to:

<county>County

Dept. of Assessment and Taxation

<city,state,zip>

PROPERTY DESCRIPTION (List all properties in your farm unit)

Account Numbers Map & Tax Lot Numbers

Parcel Total

Acreage

Land Under

Deferral

Acreage

NOTICE: A YEARLY EXCISE OR INCOME TAX RETURN MUST BE FILED WITH THE DEPARTMENT OF

REVENUE BY THE FARMLAND OWNER OR THE OPERATOR OF THE FARM UNIT (ORS 308A.071).

If this box is checked submit a copy of a “Schedule F” for each year listed below.

OWNERS LAND USE

• Do not record any acres you rented to a farm operator. Record those acres in the RENTED LAND USE section.

• Please indicate below the number of acres used per land type, for the years shown.

• Total acres identified above must be accounted for below or in the RENTED LAND USE section.

FARMED ACRES

OTHER ACRES

YEAR

IRRIGATED

Cropland

Pasture,

Mature

Orchards,

Hybrid Poplars

# of Acres

NON-

IRRIGATED

Cropland,

Pasture,

Mature

Orchards,

Christmas

Trees, Hybrid

Poplars

# of Acres

IMMATURE

Orchards,

Perennials,

Christmas

Trees, Hybrid

Poplars

# of Acres

LAND

UNDER

FARM

BLDGS.

# of Acres

FARM

WOODLOT

(20 acres Max.)

Submit

mapped

location

# of Acres

HOMESITE

# of Acres

FORESTED LAND

NOT IDENTIFIED

AS WOODLOT

Include any acres

specially assessed

as forestland here

# of Acres

LAND

NOT

FARMED

Submit

mapped

location

# of Acres

TOTAL

ACRES

XXXX

6-43 150-303-422 (Rev. 11-07-22)

Gross Income Questionnaire.doc Revised 2-7-03

OWNER’S INCOME : Complete this section for any acres you farmed yourself.

• If you leased or crop-shared, complete those acres in the RENTED LAND USE section.

• Please indicate below the farm products and gross income you received (in $) for each of the years indicated from farm

activity on your land that you farmed yourself

(acres not leased, rented or share-cropped with a farm operator).

• You must deduct

the original purchase price from the gross sale price of any livestock sold.

FARM PRODUCTS SOLD

(must be at least 51% or required gross income)

FARM PRODUCTS CONSUMED

(no more than 49% of required gross income)

TOTALS

YEAR

WHAT CROP,

LIVESTOCK or

SERVICE WAS

SOLD?

No firewood or

timber sales

QUANTITY

SOLD

TOTAL

GROSS

RECEIPTS

(IN $) FOR

SALES OR

SERVICES

WHAT WAS

CONSUMED

OR USED ON

THE FARM?

No Firewood

or timber

QUANTITY

USED

TOTAL VALUE

(IN $) OF

PERSONAL

CONSUMPTION

TOTAL VALUE

(IN $) OF SALES,

SERVICES

AND PERSONAL

CONSUMPTION

XXXX

IMPORTANT: The owner or the farm operator may return the “RENTED LAND USE” information below. If the farm operator

completes the “RENTED LAND USE” information make a copy of the questionnaire (front and back) for the farm operator to complete.

Both the signed and dated

“original” and the farm operator “copy” must be submitted to the Assessor no later than April 15.

RENTED LAND USE: Complete this section for any acres you leased or crop-shared to a farm operator.

• Do not record

any acres you farmed yourself. Record those acres in the OWNERS LAND USE section.

• ORS 308A.071 requires separate testing for any land

that you leased, rented or crop shared with a farm operator.

• You must deduct

the original purchase price from the gross sale price of livestock sold FOR BOTH TESTS.

TEST # 1: FARM OPERATOR’S

INCOME INFORMATION

(ALL LAND THE OPERATOR OWNS OR LEASES)

TEST # 2: INCOME INFORMATION

FOR LAND YOU LEASED TO A FARM OPERATOR

YEAR

TOTAL ACRES IN

FARM OPERATOR’S

ENTIRE FARM

OPERATION

(Owned or Leased)

Farmland only

IS FARM

OPERATOR’S ENTIRE

GROSS INCOME

MORE THAN $ 3,000

FROM FARMING?

IF “NO” PROVIDE

AMOUNT (IN $)

No firewood or

timber sales

TOTAL

ACRES

LEASED

Farmland only

CASH RENT

(IN $)

PAID TO

YOU

Farmland only

NET

CROP SHARE

(IN $)

YOUR SHARE

Farmland only

FARM

OPERATORS

GROSS INCOME

(IN $) FROM

FARM SALES OR

SERVICES ON

JUST YOUR LAND

No firewood or

Timber sales

XXXX

YES  NO $_________

XXXX

YES  NO $ ________

XXXX

YES  NO $ ________

XXXX

YES  NO $ ________

XXXX

YES  NO $ ________

(required)

FARM OPERATOR NAME ____________________________ PHONE NUMBER’S _______________________

DECLARATION : I declare under the penalties for false swearing as contained in ORS 305.990(4), that I have

examined this document, including any attachments, and to the best of my knowledge it is true, correct and complete.

(Owner must sign to be valid) (required)

SIGNATURE OF OWNER: ____________________Day Phone No._______________ DATE: _________

6-44 150-303-422 (Rev. 11-07-22)

150-310-068 (Rev. 05-13)

Conﬁ dential

Application for Farm-use Assessment

of Land Under Farm-use Dwellings and Wasteland

1—Name

For assessor’s use only

Address

City State ZIP code Remarks

J.V. number

Date received Approved Denied

Phone

2—Property description: Complete one of the next three lines

Property account number (as shown on your tax statement) Code area number

Recorded in deed volume, and page or instrument number Date recorded

Section

Signature Date

Twp. Rge. Acres

My ownership is by

Deed Contract

Subsection

3—I request special assessment as farmland of such portions of the above-described property which is (check one or both of the following)

Land under dwellings used with the farm use land, ORS 308A.077.

Wasteland lying in or adjacent to the farm use land, ORS 308A.074.

Describe nature and number of acres of the wasteland (to qualify, the wasteland must be owned in common with the farmland and not be

currently used for any economic farm use):

4—The farmland described above in item 2 received special assessment as farmland last year

Yes

6— Total farm income (or loss) received last year by all owners of the farm unit (from Form 1040, federal income tax

return for last year)

7— Total “federal adjusted gross income” as reported on state income tax return for the prior calendar year by all

owners of the farm unit

Notes: 1. To qualify for this special assessment, the total farm income (item 6 above) must be over one-half of the total “federal adjusted gross income”

(item 7).

2. Attach a copy of the Oregon tax return(s), including federal income tax return(s) and schedules for all owners of the farm unit (yourself plus owners

named in item5). The application, including attached income tax returns and schedules, are conﬁ dential information of the assessor’s ofﬁ ce.

Sign here:

As “owner,” as deﬁ ned in ORS 308A.077(2)(b), of the above described land, I indicate by my signature that I am aware of the potential

tax liability calculated under ORS 308A.700–308A.733 if the land ceases to be specially assessed. I declare under the penalties for false

swearing [ORS 305.990(4)] that I have examined this document (and any accompanying documents), and that to the best of my knowledge,

it is true, correct, and complete. If authority to sign is not a matter of public record, include proof of interest or authority to sign.

5—The farmland described above in item 2 is part of a larger farm unit

Yes—Number of acres in the total farm unit: __________________

Names of other owners in this farm unit, if any, are:

• File with county assessor on or before April 15.

• Application must be ﬁ led on or before April 15 of each year the assessment is requested.

• This application is only for owners of farm-use assessed land, not zoned exclusive farm use.

See page two for instructions

County form

6-45 150-303-422 (Rev. 11-07-22)

150-310-068 (Rev. 05-13)

Instructions

Note: This application is only to be used by those owners

having farm use assessed land that is not zoned exclusive

farm use. If your land is assessed as farm use land zoned

EFU, you will receive this special assessment without filing

an application.

The application for land not zoned EFU is for the farm use

assessment of:

1. Land under dwellings customarily provided in conjunc-

tion with farm use of farmland.

2. Wasteland, dry or covered with water, lying in or adjacent

to and in common ownership with farm use land. The

wasteland must not be used for any economic farm use.

To qualify

1. The land must be land under dwellings or wasteland as

described above; and

2. The land must be a part of a farm unit; and

3. The farm unit must provide over one-half of the adjusted

gross income of the owner or owners in the prior year;

and

4. The farm unit must be receiving special assessment as

farm use land; and

5. An application must be filed each year by April 15 to

receive this special assessment. A copy of the Oregon

income tax returns, including the federal income tax

returns and schedules of all the owners named in item 5

of the application, must be filed as part of the application.

Income requirement

For the purpose of determining adjusted gross income of an

owner or owners, an “owner” includes:

1. The owner of farmland who holds an estate therein in fee

simple or for life.

2. Any one of tenants in common or tenants by the entirety,

holding an estate in the farmland in fee simple or for life.

3. The purchaser of the fee simple or life estate of an owner

under contract of sale.

4. The owner’s spouse.

Farm unit

A farm unit can be one of many farm parcels operated as a

farm. The parcels may be owned by one or more owners.

For example: “A,” “B,” and “C” each own a land parcel.

The three parcels are operated as a farm unit. Wasteland is

on “A’s” and “B’s” parcels. A dwelling is on “C’s” parcel.

“A” files for that part of the wasteland on “A’s” parcel. (Of

course, “B” may file for his wasteland. Also, “C” may file for

the land under his dwelling.)

Oregon law relating to this special assessment

308A.074 Wasteland qualifications; annual application. (1) Waste-

land, dry or covered with water, neither economically tillable nor

grazeable, lying in or adjacent to and in common ownership with

nonexclusive farm use zone farmland described in ORS 308A.068,

and that is not currently being used for any economic farm use

shall qualify for farm use special assessment under ORS 308A.068

if the farmland was operated as part of a farm unit that produced

more than one-half of the adjusted gross income of the owner or

owners in the year prior to the year an application is filed under

this section.

(2)(a) An owner of wasteland shall make annual application

to qualify the wasteland as nonexclusive farm use zone farmland

under ORS 308A.068.

(b) The application shall be filed with the county assessor

on or before April 15 of each year qualification is desired. The

application shall be made on forms prepared by the Department

of Revenue and supplied by the county assessor and shall include

any information as may be reasonably required to determine quali-

fication, including copies of applicable state income tax returns.

All information provided, including determinations made under

administrative and court proceedings relating to the assessment of

the wasteland, shall be confidential information of the assessor’s

office and shall be used only for purposes of ORS 308A.050 to

308A.128.

affirmation from the applicant providing that the statements con-

tained in the application are true.

(3) For purposes of this section, “owner” or “owners” means

the person or persons entitled to file for special assessment under

ORS 308A.077 (2)(b). [1999 c.314 §9]

308A.077 Application to qualify nonexclusive farm use zone

farmland. (1) Any owner of nonexclusive farm use zone farmland

entitled to special assessment under ORS 308A.068 must, to secure

the assessment, make application therefor to the county assessor on

or before April 1 of the first year in which the assessment is desired.

(2)(a) The application shall be made upon forms prepared by

the Department of Revenue and supplied by the county assessor

and shall include any information as may reasonably be required

to determine the entitlement of the applicant.

(b) The application may be signed by any one of the following:

(A) The owner of the farmland who holds an estate therein in

fee simple or for life.

(B) Any one of tenants in common or tenants by the entirety,

holding an estate in the farmland in fee simple or for life.

an application on behalf of any person described in subparagraph

(A) or (B) of this paragraph.

(D) The guardian or conservator of an owner, or the executor

or administrator of an owner’s estate.

(E) The purchaser of the fee simple or life estate of an owner

under a contract of sale.

an application signed by a person whose authority to sign is not

a matter of public record unless there is filed with the assessor a

true copy of the deed, contract of sale, power of attorney or other

appropriate instrument evidencing the signer’s interest or author-

ity. When filed with the assessor only, such instrument shall not

constitute a public record.

(3) There shall be attached to each application the affidavit or

affirmation of the applicant that the statements contained therein

are true. [Formerly 308.375; 2003 c.46 §23]

6-46 150-303-422 (Rev. 11-07-22)

APPLICATION TO INCLUDE ADDITIONAL NON-EXCLUSIVE FARM USE

ZONED LAND TO AN EXISTING FARM USE PARCEL

ORS 308A.080

Enter your name and address below:

Applicant’s Telephone Number:

( )

ASSESSOR’S USE ONLY

Date Re ceived Clerk

Approved

Denied

LATE VALUE NOTICE

Filing date extended to:

PROPERTY DESCRIPTION FOR LAND FOR WHICH FARM USE IS REQUESTED

(Attach sep-

arate sheet

if necessary)

As shown on your tax statement

Complete only if account number does not describe property

Acres

Code Number Account Number Deed or Inst. Number Section TWP RGE

Use of land last year:

PROPERTY DESCRIPTION TO WHICH LAND WILL BE A PART OF

(Attach sep-

arate sheet

if necessary)

As shown on your tax statement

Complete only if account number does not describe property

Acres

Code Number Account Number Deed or Inst. Number Section TWP RGE

The major crops grown during the last crop year and the acres of each are as follows:

The burden of proving the gross income of the Farm Unit is upon the person claiming the special

assessment for the land. The owner may be asked to provide proof of the income reported.

Gross income from farm uses last year:

EXCEPT FOR THE LEASES NOTED BELOW, ARE THERE ANY LEASES OR OPTIONS TO BUY THE SURFACE RIGHTS FOR

OTHER THAN FARM USE: YES NO

• For the exploration of geothermal resources as deﬁ ned by Subsection (8) of ORS 522.005, mineral resources or other subsurface re sourc-

es which do not interfere with the farm use of the land.

• For the use of land for hunting, ﬁ shing, camping, or other recreational use which does not interfere with the farm use of the land.

150-303-043 (Rev. 8-03)

WARNING: 1. Notice must be given to the county assessor when the land or any portion

thereof ceases to be used exclusively for farm use.

2. Additional taxes may be added to the tax roll when farmland which is specially

assessed at farm use value becomes disqualiﬁ ed.

NOTE: A separate application (150-310-068) must

be ﬁ led annually (by April 15) to obtain special

farmland assessment for wasteland or land

under farm use dwellings.

DECLARATION

I declare under the penalties for false swearing as contained in ORS 305.990(4) that the information contained in this document, including any attached

schedules, is to the best of my knowledge true, correct, and complete.

Signature

Date

Signature

Date

Application must be ﬁ led on or before April 1 of

the ﬁ rst year in which assessment is requested

6-47 150-303-422 (Rev. 11-07-22)

150-800-005 (Rev. 12-15)

Tax Information Authorization

and

Power of Attorney for Representation

For office use only

Date received

Complete the following, if known (for routing purposes only):

Revenue employee: __________________________________________________

Division/Section: ____________________________________________________

Phone/Fax: _________________________________________________________

Send to: Oregon Department of Rev e nue

955 Center St NE

Salem OR 97301-2555

• Please print. • Use only blue or black ink. • See additional information on the back.

Address City State ZIP code

Taxpayer name Identifying number (SSN, BIN, FEIN, etc.)

Spouse’s name, if joint return

Spouse’s identifying number (SSN, etc.)

Check only one:

Tax Information Authorization: Checking this box allows the department to disclose your confidential tax information to your

des ig nee. You may designate a person, agency, firm, or or ga ni za tion.

Power of Attorney for Representation: Check this box if you want a person to “rep re sent” you. This means the person may

receive confidential information and may make decisions on your behalf. The per son you des ig nate must meet the qual i fi ca tions

listed on the back of this form.

For All tax years, or Specific tax years: __________________________________________________________________ ,

I hereby appoint the following person as designee or authorized representative:

Mailing address

City

State ZIP code

Name

Phone

Fax

( ) ( )

Signature of taxpayer(s)

• I acknowledge the following provision: Actions taken by an authorized representative are binding, even if the representative is

not an attorney. Proceedings cannot later be declared legally defective because the representative was not an attorney.

• Corporate officers, partners, fiduciaries, or other qualified persons signing on behalf of the taxpayer(s): By signing, I also certify

that I have the authority to execute this form.

•

If a tax matter concerns a joint return, both spouses must sign if joint representation is requested. Taxpayers filing jointly may

authorize separate representatives.

The above named is authorized to receive my confidential tax information and/or represent me before the Oregon Department of Rev e nue for:

All tax matters, or

Specific tax matters.

Enter tax program name(s): ________________________________________________________________________

Visit www.oregon.gov/dor to complete this form using Revenue Online.

If this tax in for ma tion au tho ri za tion or pow er of at tor ney form is not signed, it will be returned.

Power of attorney forms submitted with Revenue Online will be signed electronically.

Daytime phone

Note: This authorization form automatically revokes and replaces all earlier tax authorizations and/or all earlier powers of attorney

on file with the Oregon De part ment of Rev e nue for the same tax mat ters and years or periods covered by this form. If you do not

want to revoke a prior authorization, initial here ______.

Attach a copy of any other tax information authorization or power of attorney you want to remain in effect.

( )

Print name Date

Signature

Title (if applicable)

Spouse (if joint rep re sen ta tion)

Representative’s title and Oregon license number or relationship to taxpayer

If out-of-state CPA, sign here attesting you meet the requirements to practice in Oregon (see instructions)

6-48 150-303-422 (Rev. 11-07-22)

150-800-005 (Rev. 12-15)

Additional information

This form is used for two purposes:

• Tax information disclosure authorization. You authorize

the department to disclose your confidential tax infor-

mation to another person. This person will not receive

original notices we send to you.

• Power of attorney for representation. You authorize

another person to represent you and act on your behalf.

The person must meet the qualifications below. Unless

you specify differently, this person will have full power to

do all things you might do, with as much binding effect,

including, but not limited to: providing information; pre-

paring, signing, executing, filing, and inspecting returns

and reports; and executing statute of limitation extensions

and closing agreements.

This form is effective on the date signed. Authorization termi-

nates when the department receives written revocation notice

or a new form is executed (unless the space provided on the

front is initialed indicating that prior forms are still valid).

Unless the appointed representative has a fiduciary relation-

ship to the taxpayer (such as personal representative, trustee,

guardian, conservator), original Notices of Deficiency or

Assessment will be mailed to the taxpayer as required by

law. A copy will be provided to the appointed representative

when requested.

For corporations, “taxpayer” as used on this form, must be

the corporation that is subject to Oregon tax. List fiscal years

by year end date.

Qualifications to represent taxpayer(s) before

Department of Revenue

Under Oregon Revised Statute (ORS) 305.230 and Oregon

Administrative Rule (OAR) 150-305.230, a person must meet

one of the following qualifications in order to represent you

before the Department of Revenue.

1. For all tax programs:

a. An adult immediate family member (spouse, parent,

child, or sibling).

b. An attorney qualified to practice law in Oregon.

c. A certified public accountant (CPA) or public accoun-

tant (PA) qualified to practice public accountancy in

Oregon, and their employees.

d. An IRS enrolled agent (EA) qualified to prepare tax

returns in Oregon.

e. A designated employee of the taxpayer.

f. An officer or full-time employee of a corporation (includ-

ing a parent, subsidiary, or other affiliated corporation),

association, or organized group for that entity.

g. A full-time employee of a trust, receivership, guardian-

ship, or estate for that entity.

h. An individual outside the United States if representa-

tion takes place outside the United States.

2. For income tax issues:

a. All those listed in (1); plus

b. A licensed tax consultant (LTC) or licensed tax pre-

parer (LTP) licensed by the Oregon State Board of Tax

Practitioners.

3. For ad valorem property tax issues:

a. All those listed in (1); plus

b. An Oregon licensed real estate broker or a principal real

estate broker; or

c. An Oregon certified, licensed, or registered appraiser; or

d. An authorized agent for designated utilities and com-

panies assessed by the department under ORS 308.505

through 308.665 and ORS 308.805 through 308.820.

4. For forestland and timber tax issues:

a. All those listed in (1), (2), and (3)(b) and (c); plus

b. A consulting forester.

An individual who prepares and either signs your tax return

or who is not required to sign your tax return (by the instruc-

tions or by rule), may represent you during an audit of that

return. That individual may not represent you for any

other purpose unless they meet one of the qualifications

listed above.

Generally, declarations for representation in cases appealed

beyond the Department of Revenue must be in writing to the

Tax Court Magistrate. A person recognized by a Tax Court

Magistrate will be recognized as your representative by the

department.

Tax matters partners and S corporation shareholders. See

OARs 150-305.242(2) and (5) and 150-305.230 for additional

information. Include the partnership or S corporation name

in the taxpayer name area.

Out-of-state attorneys and CPAs

Attorneys may contact the Oregon State Bar for information

on practicing in Oregon. If your out-of-state representative

receives authorization to practice in Oregon, attach proof to

this form.

CPAs may practice in Oregon if they meet the following

substantial equivalency requirements of ORS 673.010:

1. Licensed in another state;

2. Have an accredited baccalaureate degree with at least 150

semester hours of college education;

3. Passed the Uniform CPA exam; and

4. Have a minimum of one year experience.

Have questions? Need help?

General tax information ...................... www.oregon.gov/dor

Salem ............................................................... (503) 378-4988

Toll-free from an Oregon prefix ................1 (800) 356-4222

Asistencia en español:

En Salem o fuera de Oregon ........................(503) 378-4988

Gratis de prefijo de Oregon ......................1 (800) 356-4222

TTY (hearing or speech impaired; machine only):

Salem area or outside Oregon .....................(503) 945-8617

Toll-free from an Oregon prefix ................1 (800) 886-7204

Americans with Disabilities Act (ADA): Call one of the help

numbers above for information in alternative formats.

6-49 150-303-422 (Rev. 11-07-22)

Appendix D: Farm use

certification and capitalization

Farm use interest rate and wheat price certification letter ................................................ 6-49

Calculation of farm use specially assessed

values per land class (example) ............................................................................................ 6-50

Summary of farm use interest rates/wheat prices ............................................................. 6-51

6-50 150-303-422 (Rev. 11-07-22)

DATE: January 07, 2022

TO: All County Assessors

FROM: Toni Blessing & June Hadlock

Farm Special Assessment Program

Support, Assistance & Oversight Section

Property Tax Division

SUBJECT: Farm-Use Interest Rate and Wheat Price for 2022-23

Department of

Revenue

Property Tax

Division

955 Center St NE

PO Box 14380

Salem, OR 97309‐5075

The average effective rate of interest charged by the Farm Credit Service on real

property loans is annually reported to the Internal Revenue Service. In compliance

with ORS 308A.092, the Department of Revenue certifies a five-year average interest

rate of 4.31 percent. This interest rate plus a local property tax rate is to be used to

arrive at the farm use capitalization rate.

Each county Assessor needs to estimate rates for property taxes when computing farm

use values. Measure 50 limits the farm use value to the lower of the 2022-23 specially

assessed value (SAV) or the 2022-23 maximum specially assessed value (MSAV) for

each land class. See example attached.

The market wheat price for computing 2022 farm use values of wheat land is

$8.23 per bushel. This price must be adjusted for local costs of storing and

marketing the wheat (freight, inspection, handling, and wheat tax). These costs

are available from the local grain elevator companies in the counties.

In addition to the market price of $8.23 per bushel, any payments growers receive

under government programs for the 2020 and 2021 wheat crops need to be added

to the market price to arrive at the growers' gross income.

Toni Blessing, June Hadlock

Appraiser Analyst 3

[email protected]

(503) 945-8737 FAX

(503) 945-8617 TTY

150‐800‐930 (Rev. 03‐15)

6-51 150-303-422 (Rev. 11-07-22)

2022-2023 EXAMPLE

CALCULATION OF FARM USE SPECIALLY ASSESSED VALUES PER LAND CLASS

2021-22 ESTIMATED IMPOSED NOMINAL TAX RATE

Tax rate

Nominal Tax Rate / 1000 = Decimal Percentage

10.69 / 1000 = 0.01069 1.069%

CALCALATION OF EFFECTIVE TAX RATE PERCENTAGE:

LAND CLASS

Tax Ratio

2021-22 MSAV

2021-22 SAV

(NOT TO EXCEED

1.00)

648 / 670 = 0.9672

Nominal Tax Rate x Tax Ratio = Effective Tax Rate

0.01069 x 0.9672 = 0.010339 1.034%

CALCULATION OF CAPITALIZATION RATE:

DOR Certified Interest Rate 4.310%

Effective Tax Rate 1.034%

CAPITALIZATION RATE FOR CALCULATING FARM USE VALUE 5.344%

CAPITALIZATION EXAMPLE PER LAND CLASS:

2021-22 2021-22

FARM USE ESTIMATED

NET INCOME CAP RATE

2022-23

SPECIALLY ASSESSED

VALUE (SAV)

PER ACRE TABLE

SAV

$57.50

/ 0.05344 = $1,075

2021-22 2021-22

MAXIMUM SPECIALLY ASSESSED VALUE

ASSESSED VALUE (MSAV) (AV) x 103%

PER ACRE TABLE

2022-23

MAXIMUM SPECIALLY

ASSESSED VALUE (MSAV)

PER ACRE TABLE

MSAV $648 < Greater of > $667 = $667

2022-23 2022-23

SAV MSAV

PER ACRE TABLE PER ACRE TABLE

2022-23

ASSESSED VALUE (AV)

PER ACRE

$1,075 < Lesser of > $667 =

$667

6-52 150-303-422 (Rev. 11-07-22)

Summary of farm use

interest rates/wheat prices

Year DOR certified rate Wheat price

2011-12 5.84% $5.70

2012-13 5.94% $6.41

2013-14 5.86% $7. 54

2014-15 5.55% $ 7.93

2015-16 5.17% $7. 0 2

2016-17 4.79% $6.17

2017-18 4.44% $5.07

2018-19 4.21% $4.95

2019-20 4.13% $5.67

2020-21 4.14% $6.01

2021-22 4.21% $5.87

2022-23 4.31% $8.23

6-53 150-303-422 (Rev. 11-07-22)

Appendix E: Farm use valuation

Measure 50 specially assessed RMV, SAV, MAV, and AV calculation matrix ................. 6-53

Appraisal of contiguous rural farm or forestland .............................................................. 6-54

Real market value (example) ................................................................................................. 6-55

Farm and forest related homesites ....................................................................................... 6-56

Measure 50 calculations (examples) ..................................................................................... 6-57

Land schedules—commercial farmland, rural tract lands ...............................................6-65

Tax lot map .............................................................................................................................. 6-66

6-54 150-303-422 (Rev. 11-07-22)

M-50 calculations

Specially assessed RMV, SAV, MAV, and AV calculation matrix

Plus

Real market value

of the

market portion

Real market value

of the

specially assessed

portion

Total

real market value

for the account

Constitution article

X1 sec 11

Real market value

of the

market portion

Specially assessed value

of the

specially assessed portion

Specially assessed value

ORS 310.165(2)

(M-5 test)

Lesser of: total real market value or Measure 50 value

Equals

Assessed value

Maximum assessed value

of the

market portion

Maximum

specially assessed value

of the

specially assessed portion

Maximum assessed value

for the tax roll

Lesser of:

Real market value

maximum assessed value

of the

market portion

Lesser of:

(by land class)

specially assessed value

maximum specially

assessed value

of the

specially assessed portion

Measure 50 value

for the account

Equals

Plus

Equals

Plus

Equals

Plus

Equals

6-55 150-303-422 (Rev. 11-07-22)

Appraisal of contiguous

rural farm or forestlands

The following guideline is to establish a uniform policy

for the appraisal of contiguous tracts of rural farm or

forestland.

Determine if the property is under special assessment.

If the property is currently under special assessment, it

will require two separate appraisals. One appraisal for

farm or forest use value (specially assessed value) and

one for real market value (RMV) based on a highest-

and-best-use analysis.

See “Valuation” section of this manual for “Measure 50

maximum assessed value limitations.”

Highest-and-best-use is defined as the reasonably

probable and legal use of vacant land or an improved

property, which is physically possible, appropriately

supported, financially feasible, and that results in the

highest value. When considering highest-and-best-use,

the first consideration as outlined in “The appraisal of

real estate—10th edition” and DOR Methods manual,

Chapter 7, is to determine the legal use of the property.

Zoning restrictions are a primary consideration in legal

use.

EFU zoned and highest-and-best-use

forestland

If the property is in an exclusive farm use (EFU) zone

or highest-and-best-use forestland (resource lands), the

valuation procedure will be different than if the prop-

erty is in a zone which allows for more intense uses.

Specially assessed lands, EFU, or resource lands will

be valued as a single, large tract of land, by productiv-

ity class (see “Commercial farmland schedule”) rather

than as several smaller tracts. The benefit comes from

economies of scale where large tracts are valued at

less per acre than smaller tracts. Some properties may

require a land size adjustment based on market for the

area. Adjustments for flooding, utility, quality, location

influences, etc., may also be needed to be made to the

value obtained from the commercial farmland or for-

estland schedule. Such adjustments are derived from

a market study of sales of similar properties which are

comparable to the subject property.

In an EFU zone, there can be additional restrictions

for “high value farm land.” This is primarily land fall-

ing under the class I and class II quality designation. It

also includes some special class III and class IV lands.

For properties falling under this classification, zoning

restrictions make it more difficult to subdivide the land

to create additional building sites(s).

Zones permitting development of rural

parcels

When the property is in a zone which permits devel-

opment of parcels, each buildable lot is valued indi-

vidually. When the property has sufficient acreage

to be segregated or subdivided and there is an active

market for parcels meeting zoning requirements, then

the property must be valued based on a land schedule

developed from sales of properties with comparable

zoning (highest and best use) (see example 1).

Adjustments are made to individual acres for each par-

cel which have more or less utility; such as more than

one buildable site, a view factor or water front.

When a property is specially assessed, the individual

parcel values including any adjustments for amenities

such as view, water front etc. are added together and

divided by the total number of acres under contigu-

ous ownership. The resulting average price per acre is

used to compute the qualified homesite values. (ORS

308A.256)

6-56 150-303-422 (Rev. 11-07-22)

Example #1—real market value

The following example determines real market value

for tax lots 700, 701, 800, and 900 (see attached tax lot

map.) They are under contiguous ownership, how-

ever each is a separate legal parcel. The zoning is AR-5

which permits development of a homesite on five or

more acres. This is a more intensive use than permitted

under EFU zoning. Each tax lot is a legally buildable

lot. In this example, a good view is worth $30,000, all

of the parcels are developed and typical onsite devel-

opments (OSD) adds $10,000. Land values are from the

attached rural tract land schedule which was derived

from a market study.

Tax lot 700: 5 acres @ $17,500 = $87,500

View—Good 30,000 = 30,000

OSD—Typical 10,000 = 10,000

RMV land value $127,500

Tax lot 701: 36 acres @ 4,750 = 171,000

View—Good 30,000 = 30,000

OSD—Typical 10,000 = 10,000

RMV land value 211,000

Tax lot 800: 43 acres @ 4,500 = 193,500

View—Good 30,000 = 30,000

OSD—Typical 10,000 = 10,000

RMV land value 233,500

Tax lot 900: 19 acres @ 5,500 = 104,500

No view

OSD—Typical 10,000 = 10,000

RMV land value 114,500

The preceding values will be assessed for each parcel

not under special assessment.

These values will also be used to calculate any addi-

tional tax once the property is removed from special

assessment (see “Farm and forest related homesite”).

For vacant parcels which are legally buildable, fac-

tors affecting value such as view, OSD etc., should be

added, but not to exceed one homesite. For example, a

vacant 20 acre parcel in an AR-5 zone has a legal right

to build one homesite. It may be possible to develop 4

homesites but the view, OSD etc., for more homesites

can’t be added to the calculation of RMV until the land

is partitioned or approved for these additional home-

sites. The rural tract land schedule (AR-5) reflects other

dividable parcels (such as 20 acres dividable to four 5

acre parcels) with one existing homesite (or the right to

build one homesite).

Add increments for OSD, view, etc., when additional

homesite have been approved or are existing.

The value calculated for each of the above parcels

would have the following separately stated elements

on a land appraisal card:

1. Average per acre value from the land schedule for

each homesite.

2. Value increments (such as view, river front etc.) for

each homesite.

3. Onsite developments (OSD) at real market value

(RMV).

4. Remaining acres from land schedule.

Note: Real property improvements such as buildings,

automatic feeders, processing equipment, irrigation

pumps, motors, electrical service, buried lines, cor-

rals etc. are to be assessed at RMV on an improvement

appraisal card.

6-57 150-303-422 (Rev. 11-07-22)

Farm and forest related homesites

Value farm related homesite in

accordance with ORS 308A.256

EFU farm related homesite.

Non-EFU farm related homesite (by application under

ORS 308A.077).

Homesite valuation requires two separate calcula-

tions for valuing the homesite for assessment pur-

poses. These include real market value and specially

assessed value. For the purposes of establishing home-

site value, the value of one acre of land for each farm

related homesite shall be used.

Real market homesite value

Determine the average per acre real market value for

the homesite parcel. Use the entire parcel the homesite

is located on, not all contiguous parcels under com-

mon ownership. After the average per acre RMV of the

parcel has been calculated, add for amenities such as

view, river front, etc., or deduct for lack of utility such

as unusable area, poor access, etc. Then to this, add the

OSD increment at RMV to arrive at the homesite value.

Specially assessed homesite value

(Must be in conjunction with a qualifying farm use.)

Determine RMV for all contiguous parcels and acres

of common ownership and apply values from the land

schedule(s). Add for amenities such as view, river front

etc., or deduct for lack of utility such as unusable area,

poor access, etc. Divide the total RMV by the total

acres of contiguous ownership to arrive at the average

value per acre. The average value per acre for one acre

is added to a maximum OSD of $4,000 to arrive at the

specially assessed homesite value.

Value forest related homesite in accordance

with ORS 308A.256

Highest-and-best-use forestland-related homesite.

Designated forestland-related homesite.

Small tract forestland-related homesite.

Forest related homesite values

Homesite parcel must have a minimum of 10.01 acres of

assessed forestland as specified in ORS 308A.250 and

308A.253.

Use the above farm related homesite valuation proce-

dures to determine the “real market homesite value”

and the “specially assessed homesite value.”

See “Valuation” section of this manual for “Measure 50

maximum assessed value limitations.”

6-58 150-303-422 (Rev. 11-07-22)

To solve for tax lot 700 with no amentities. (non-qualifying homesite)

-- Zoned EFU In this example, the market value for small tracts zoned AR-5 and EFU-5 are considered the

same at $17,500 per acre. Class II farmland SAV = $551, MSAV = $525.

-- OSD Avera

e RMV onsite develo

ment

(

OSD

)

is $10

000

use $4

000 if s

eciall

assessed.

-- Amenities None.

-- TL 700 Class II farmland

one acre non-

ualif

homesite

roved with a dwellin

The following demonstrates side-by-side calculations:

ASSESSMENT BASED ON MARKET VALUE SPECIALLY ASSESSED

(ORS 308.146 and 308.205)

(

ORS 308A.107 and 308A.256

)

Real Market Value: (RMV) Specially Assessed Value: (SAV) (RMV)

MARKET PORTION MARKET PORTION

TL 700 Improvement RMV $125,000 TL 700 Improvement RMV $125,000

TL 700 HS Value TL 700 HS Value

EFU-5AC, one acre $17,500 EFU-5AC, one acre $17,500

OSD @ RMV = $10,000 OSD @ RMV = $10,000

Homesite RMV $27,500 Homesite RMV $27,500

Total MARKET PORTION RMV $152,500

$152,500 Total MARKET PORTION RMV $152,500 $152,500

SPECIALLY ASSESSED PORTION SPECIALLY ASSESSED PORTION

TL 700 Remaining Acres RMV TL 700 Remaining Acres SAV

4AC x $17,500 = $70,000 Class II 4AC x $551 = $2,204

204

Remaining Acres RMV $70,000 Remaining Acres SAV $2,204

Total SA PORTION RMV $70,000

$70,000 Total SA PORTION SAV $2,204

Total RMV for account $222,500 Total SAV for account (M-5)

Maximum Assessed Value: (MAV) Maximum Special Assessed Value: (MSAV) (MAV)

MARKET PORTION

TL 700 MARKET PORTION MAV

MARKET PORTION RMV (New year) $152,500

TL 700 account MAV Divided by New Total RMV (New year) $222,500

Prior year MAV $155,750

(tax roll) Equals MARKET PORTION Apportionment 0.6854

Prior year AV x 1.03 $160,422 Account MAV $160,422

Greater of = Account MAV

$160

422 Times MARKET PORTION A

ortionment 0.6854

Total MARKET PORTION MAV

$109,953

SPECIALLY ASSESSED PORTION

TL 700 Remaining Acres MSAV

Class II 4AC

$525 = $2,100 $2

100

Remaining acres MSAV $2,100

Total SA PORTION MSAV $2,100

Total MAV for SA account

Assessed Value as if not specially assessed: (AV) Assessed Value if specially assessed: (AV) (AV)

Total RMV for Account $222,500 Lesser of MARKET PORTION RMV or MAV $109,953

Total MAV for Account $160,422

Lesser of Class II SAV or MSAV

$2,100

TOTAL AV IF NOT SPECIAL ASSESSED $160,422 TOTAL AV IF SPECIAL ASSESSED (M-50)

ACCOUNT AV (Lesser of RMV or M-50 Value) $112,053

M-50 Calculations Exam

le # 2

112

053

154

704

112

053

Measure 50 calculations (examples)

6-59 150-303-422 (Rev. 11-07-22)

To solve for tax lot 700 with no amentities.

-- Zoned EFU In this example, the market value for small tracts zoned AR-5 and EFU-5 are considered the

same at $17,500 per acre. Class II farmland SAV = $551, MSAV = $525.

-- OSD Average RMV onsite development (OSD) is $10,000, use $4,000 if specially assessed.

-- Amenities None.

-- TL 700 Class II farmland, one acre homesite, improved with a dwelling. One acre is not being farmed.

The following demonstrates side-by-side calculations:

ASSESSMENT BASED ON MARKET VALUE SPECIALLY ASSESSED

(ORS 308.146 and 308.205)

(

ORS 308A.107 and 308A.256

)

Real Market Value: (RMV) Specially Assessed Value: (SAV) (RMV)

MARKET PORTION MARKET PORTION

TL 700 Improvement RMV $125,000 TL 700 Improvement RMV $125,000

TL 700 Land RMV (1 AC) $17,500 TL 700 Land RMV (1 AC) $17,500

Total MARKET PORTION RMV

$142

500 Total MARKET PORTION RMV $142

500

SPECIALLY ASSESSED PORTION SPECIALLY ASSESSED PORTION

TL 700 HS Value TL 700 HS Value

5AC x $17,500 =

HS Bare Land Value Base (RMV) $87,500

EFU-5AC, one acre $17,500 $ 87

500 / 5AC = HS Land SAV $17

500

(

RMV/AC

)

OSD @ RMV = $10,000

OSD SAV =

(

$4,000 maximum

)

$4,000

Homesite RMV $27,500 Homesite SAV $21,500

$21

500

TL 700 Remaining Acres RMV TL 700 Remaining Acres SAV

3AC x $17,500 = $52,500

Class II = 3ACx $551

$1,653

653

Remaining Acres RMV $52,500 Remaining Acres SAV $1,653

Total SA PORTION RMV $80,000

$80,000 Total SA PORTION SAV $23,153

Total RMV for account $222,500 Total SAV for account (M-5)

Maximum Assessed Value: (MAV) Maximum Special Assessed Value: (MSAV) (MAV)

MARKET PORTION

TL 700 MARKET PORTION MAV

MARKET PORTION RMV (New year) $142,500

TL 700 account MAV Divided by New Total RMV (New year) $222,500

Prior year MAV $155,750

(tax roll) Equals MARKET PORTION Apportionment 0.6404

Prior year AV x 1.03 $160,422 Account MAV $160,422

Greater of = Account MAV

$160

422 Times MARKET PORTION A

ortionment 0.6404

Total MARKET PORTION MAV

$102

734

SPECIALLY ASSESSED PORTION

TL 700 Land Value

Prior Year HS MSAV $15,050

(tax roll)

Prior Year HS AV x 103% $15,501

Greater of = HS Land MSAV

$15,501

OSD Prior Year MSAV $4,120

(tax roll)

OSD Prior Year AV x 103% $4,120

Greater of = OSD MSAV

$4,120

Homesite MSAV $19,621

$19

621

TL 700 Remaining Acres MSAV

Class II 3ac

$525 =

$1,575

575

Remaining acres MSAV $1,575

Total SA PORTION MSAV $1,575

Total MAV for SA account

Assessed Value as if not specially assessed: (AV) Assessed Value if specially assessed: (AV) (AV)

Lesser of MARKET PORTION RMV or MAV $102

734

Lesser of HS Land SAV or MSAV $15

501

Lesser of OSD SAV or MSAV $4

000

Total RMV for Account $222

500 Homesite AV $19

501 $19

501

Total MAV for Account $160,422

Lesser of Class II SAV or MSAV

$1,575

TOTAL AV IF NOT SPECIAL ASSESSED $160,422 TOTAL AV IF SPECIAL ASSESSED (M-50)

ACCOUNT AV (Lesser of RMV or M-50 Value) $123,810

M-50 Calculations Exam

le # 3

123

810

165

653

123

930

6-60 150-303-422 (Rev. 11-07-22)

To solve for tax lot 700 with "good view".

-- Zoned EFU Tax Lot 700 is zoned EFU-5. In this example, the market value for small tracts zoned AR-5 and EFU-5

are considered the same. Class II farmland SAV = $ 551/ac, MSAV = $525.

-- OSD Average RMV onsite development (OSD) is $10,000, use $4,000 if specially assessed.

-- Amenities Good View = $30,000

-- TL 700 Class II farmland, one acre homesite, improved with a dwelling

The following demonstrates side-by-side calculations:

ASSESSMENT BASED ON MARKET VALUE SPECIALLY ASSESSED

(ORS 308.146 and 308.205)

(ORS 308A.107 and 308A.256)

Real Market Value: (RMV) Specially Assessed Value: (SAV) (RMV)

MARKET PORTION MARKET PORTION

TL 700 Improvement RMV $125,000 TL 700 Improvement RMV $125,000

Total MARKET PORTION RMV

$125,000 MARKET PORTION TOTAL RMV $125,000

SPECIALLY ASSESSED PORTION SPECIALLY ASSESSED PORTION

TL 700 HS Value TL 700 HS Value

5AC x $ 17,500 = $87,500

Good View = $30,000

HS RMV Bare Land Value Base $117,500

EFU-5 AC, one acre $17,500 $ 117,500 / 5AC = HS Land SAV $23,500 (AVG RMV/AC)

Good View = $30,000

OSD @ RMV = $10,000

OSD SAV = ( $ 4,000 maximum)

$4,000

Homesite RMV $57,500 Homesite SAV $27,500

$27,500

TL 700 Remaining Acres RMV TL 700 Remaining Acres SAV

4AC x 17,500 = $70,000

Class II 4AC x $551 =

$2,204 $2,204

Remaining Acres RMV $70,000 Remaining Acres SAV $2,204

Total SA PORTION RMV $127,500 $127,500 Total SA PORTION SAV $29,704

Total RMV for account $252,500 Total SAV for account (M-5)

Maximum Assessed Value: (MAV) Maximum Special Assessed Value: (MSAV) (MAV)

MARKET PORTION

TL 700 MARKET PORTION MAV

MARKET PORTION RMV (New year) $125,000

TL 700 account MAV Divided by New Total RMV (New year) $252,500

Prior year MAV $176,750 (tax roll) Equals MARKET PORTION Apportionment 0.4950

Prior year AV x 1.03 $182,052 Account MAV $182,052

Greater of = Account MAV

$182,052 Times MARKET PORTION Apportionment 0.4950

Total MARKET PORTION MAV

$90,116

SPECIALLY ASSESSED PORTION

TL 700 Land Value

Prior Year HS MSAV $16,450 (tax roll)

Prior Year HS AV x 103% $16,943

Greater of =HS Land MSAV

$16,943

OSD Prior Year MSAV $4,120 (tax roll)

OSD Prior Year AV x 103% $4,120

Greater of = OSD MSAV

$4,120

Homesite MSAV $21,063

$21,063

TL 700 Remaining Acres MSAV

Class II 4AC @ $525 =

$2,100 $2,100

Remaining acres MSAV $2,100

Total SA PORTION MSAV $23,163

Total MAV for SA account

Assessed Value as if not specially assessed: (AV) Assessed Value if specially assessed: (AV) (AV)

Lesser of MARKET PORTION RMV or MAV

$90,116

Lesser of HS Land SAV or MSAV

$16,943

Lesser of OSD SAV or MSAV

$4,000

Total RMV for account

$252,500 Homesite AV $20,943 $20,943

Total MAV for account $182,052

Lesser of Class II SAV or MSAV

$2,100

TOTAL AV IF NOT SPECIAL ASSESSED $182,052 TOTAL AV IF SPECIAL ASSESSED (M-50)

ACCOUNT AV (Lesser of RMV or M-50 Value) $113,159

M-50 Calculations Example # 4

$113,159

$154,704

$113,279

6-61 150-303-422 (Rev. 11-07-22)

To solve for tax lot 700 when tax lots 700 and 701 are contiguous parcels of common ownership.

-- Zoned EFU Tax lot 700 is zoned EFU-5. In this example, the market value for small tracts zoned AR-5 and EFU-5

is considered the same at $17,500 per acre. Class II farmland SAV = $551, MSAV = $525.

-- OSD Average RMV onsite development (OSD) is $10,000, use $4,000 if specially assessed.

-- Amenities Good view (RMV of $30,000)

-- TL 700 Class ll farmland, one acre homesite, improved with a dwelling (common contiguous ownership to TL 701).

-- TL 701 15AC Class II, 20AC Class III, Class ll one acre homesite, no improvements

(contiguous common ownership to TL 700).

Note: Include all contiguous acres (parcels under common ownership) in the homesite calculation only when

valuing farm homesites under ORS 308A.256.

The following demonstrates side-by-side calculations for Tax Lot 700: (See EX5-701 for Tax Lot 701)

ASSESSMENT BASED ON MARKET VALUE SPECIALLY ASSESSED

(ORS 308.146 and 308.205)

(ORS 308A.107 and 308A.256)

Real Market Value: (RMV) Specially Assessed Value: (SAV) (RMV)

MARKET PORTION MARKET PORTION

TL 700 Improvement RMV TL 700 MARKET PORTION RMV

Dwelling $125,000 Dwelling $125,000

Barn, Machine Shed, Irrigation, etc. $100,000 Barn, Machine Shed, Irrigation, etc. $100,000

Total MARKET PORTION RMV

$225,000 Total MARKET PORTION RMV $225,000

SPECIALLY ASSESSED PORTION SPECIALLY ASSESSED PORTION

Tax Lot 700 HS Value Tax Lot 700 HS Value

Tax Lot 700

Rural Tract, 5 AC x $17,500 $87,500

Good View $30,000

Tax Lot 700 Bare Land Value (RMV) $117,500

Tax Lot 701

Class II 16AC x $4,150 = $66,400

Class III 20AC x$3,500 = $70,000

Good View $30,000

TL 701 Bare Land Value (RMV) $166,400

HS Bare Land Value Base (RMV) $283,900

EFU-5 acres, one acre $17,500

$283,900 / 41AC = HS Land SAV $6,924 (AVG RMV/AC)

Good View $30,000

OSD RMV $10,000

OSD SAV ($4,000 maximum) $4,000

Homesite RMV $57,500 Homesite SAV $10,924 $10,924

Tax Lot 700 Remaining Acres RMV Tax Lot 700 Remaining Acres SAV

4AC x $17,500 = $70,000

Class II 4AC x $551 = $2,204 $2,204

Remaining Acres RMV $70,000 Remaining Acres SAV $2,204

Total SA PORTION RMV $127,500

$127,500 Total SA PORTION SAV $13,128

Total RMV for account $352,500 Total SAV for account (M-5)

Maximum Assessed Value: (MAV) Maximum Special Assessed Value: (MSAV) (MAV)

MARKET PORTION

TL 700 MARKET PORTION MAV

MARKET PORTION RMV (New year) $225,000

TL 700 account MAV Divided by New Total RMV (New year) $352,500

Prior year MAV $246,750

(tax roll) Equals MARKET PORTION Apportionment 0.6383

Prior year AV x 1.03 $254,152 Account MAV $254,152

Greater of = Account MAV $254,152 Times MARKET PORTION Apportionment 0.6383

Total MARKET PORTION MAV $162,225

SPECIALLY ASSESSED PORTION

Tax Lot 700 Land Value

Prior Year HS MSAV $4,846 (tax roll)

Prior Year HS AV x 103% $4,991

Greater of = HS Land MSAV $4,991

OSD Prior Year MSAV $4,120 (tax roll)

OSD Prior Year AV x 103% $4,120

Greater of = OSD MSAV $4,120

Homesite MSAV $9,111 $9,111

TL 700 Remaining Acres MSAV

Class II 4AC x $525 = $2,100 $2,100

Remaining acres MSAV $2,100

Total SA PORTION MSAV $11,211

Total MAV for SA account

Assessed Value as if not specially assessed: (AV) Assessed Value if specially assessed: (AV) (AV)

Lesser of MARKET PORTION RMV or MAV $162,225

Lesser of HS Land SAV or MSAV $4,991

Lesser of OSD SAV or MSAV $4,000

Total RMV for Account $352,500 Homesite AV $8,991 $8,991

Total MAV for Account $254,152

Lesser of Class II SAV or MSAV

$2,100

TOTAL AV IF NOT SPECIAL ASSESSED $254,152 TOTAL AV IF SPECIAL ASSESSED (M-50)

ACCOUNT AV (Lesser of RMV or M-50 Value) $173,316

M-50 Calculations Example # 5-700

$173,316

$238,128

$173,436

6-62 150-303-422 (Rev. 11-07-22)

To solve for tax lot 701 when tax lots 700 and 701 are contiguous parcels of common ownership.

-- Zoned EFU Class II farmland SAV = $551 and MSAV = $525, Class III SAV = $433 and MSAV = $413.

Tax lot 701 is zoned EFU-80 Real market value of Class II farmland = $4,150, Class III = $3,500

-- OSD TL 701 unimproved, no OSD's.

-- Amenities Good view (RMV of $30,000)

-- TL 700 Class ll farmland, one acre homesite, improved with a dwelling (common contiguous ownership to TL 701).

-- TL 701 15AC Class II, 20AC Class III, Class ll one acre homesite, no improvements

(common contiguous ownership to TL 700).

Note: Include all conti

uous acres

arcels under common ownershi

in the homesite calculation onl

when

valuing farm homesites under ORS 308A.256.

The following demonstrates side-by-side calculations for Tax Lot 701: (See EX5-700 for Tax Lot 700)

ASSESSMENT BASED ON MARKET VALUE SPECIALLY ASSESSED

(ORS 308.146 and 308.205)

(

ORS 308A.107 and 308A.256

)

Real Market Value: (RMV) Specially Assessed Value: (SAV) (RMV)

MARKET PORTION MARKET PORTION

TL 701 Improvement RMV TL 701 MARKET PORTION RMV

No Improvements No Improvements

Total MARKET PORTION RMV

$0 Total MARKET PORTION RMV $0

SPECIALLY ASSESSED PORTION SPECIALLY ASSESSED PORTION

Tax Lot 701 HS Value Tax Lot 701 HS Value

Tax Lot 700

Rural Tract, 5 AC x $17,500 $87,500

Good View $30,000

Tax Lot 700 Bare Land Value (RMV) $117,500

Tax Lot 701

Class II 16AC x $4

150 = $66

400

Class III 20AC x$3

500 = $70

000

Good View $30,000

TL 701 Bare Land Value (RMV) $166,400

HS Bare Land Value Base (RMV) $283,900

EFU-80 acres, one acre class ll $4,150 $283

900 / 41AC = HS Land SAV $6

924

(

AVG RMV/AC

)

Good View $30,000

OSD RMV (No OSD, unimproved) $0 OSD SAV

(

No OSD

unim

roved

)

Homesite RMV $34,150 Homesite SAV $6,924

$6,924

Tax Lot 701 Remaining Acres RMV Tax Lot 701 Remaining Acres SAV

Class II 15AC x $4,150 = $62,250 Class II 15AC x $551 = $8,265

265

Class III 20AC x $3,500 = $70,000 Class III 20AC x $433 = $8,660 $8

660

Remaining Acres RMV $132,250 Remaining Acres SAV $16,925

Total SA PORTION RMV $166,400

$166,400 Total SA PORTION SAV $23,849

Total RMV for account $166,400 Total SAV for account (M-5)

Maximum Assessed Value: (MAV) Maximum Special Assessed Value: (MSAV) (MAV)

MARKET PORTION

TL 701 MARKET PORTION MAV

MARKET PORTION RMV (New year) $0

TL 701 account MAV Divided by New Total RMV (New year) $166,400

Prior year MAV $127,912

(tax roll) Equals MARKET PORTION Apportionment 0.0000

Prior year AV x 1.03 $131,749 Account MAV $131,749

Greater of = Account MAV

$131

749 Times MARKET PORTION A

ortionment 0.0000

Total MARKET PORTION MAV

SPECIALLY ASSESSED PORTION

Tax Lot 701 Land Value

Prior Year HS MSAV $5,193 (tax roll)

Prior Year HS AV x 103% $5,348

Greater of = HS Land MSAV $5

348

OSD Prior Year MSAV $0 (tax roll)

OSD Prior Year AV x 103% $0

Greater of = OSD MSAV

(

unim

roved

)

Homesite MSAV $5,348 $5,348

TL 701 Remaining Acres MSAV

Class II 15AC x $525 = $7,875

875

Class III 20AC x $413 = $8,260 $8

260

Remaining Acres MSAV $16,135

Total SA PORTION MSAV $21,483

Total MAV for SA account

Assessed Value as if not specially assessed: (AV) Assessed Value if specially assessed: (AV) (AV)

Lesser of MARKET PORTION RMV or MAV $0

Lesser of HS Land SAV or MSAV $5,348

Lesser of OSD SAV or MSAV $0

Homesite AV $5,348 $5,348

Total RMV for Account $166,400 Lesser of Class II SAV or MSAV $7

875

Total MAV for Account $131,749

Lesser of Class IIl SAV or MSAV

$8,260

TOTAL AV IF NOT SPECIAL ASSESSED $131,749 TOTAL AV IF SPECIAL ASSESSED (M-50)

ACCOUNT AV (Lesser of RMV or M-50 Value) $21,483

M-50 Calculations Exam

le # 5-701

483

849

135

6-63 150-303-422 (Rev. 11-07-22)

To solve for Tax Lot 700 when tax lots 700 and 701 comprise one lot of record.

-- Zoned EFU Class II farmland SAV = $551 and MSAV = $525, Class III SAV = $433 and MSAV = $413.

Real market value of Class II farmland = $4,150, Class III = $3,500

-- OSD Average RMV onsite development (OSD) is $10,000, use $4,000 if specially assessed.

-- Amenities Good view (RMV of $30,000)

-- TL 700 Class ll farmland, one acre homesite, improved with a dwelling

-- TL 701 16AC Class II, 20AC Class III, all farmland

Note: TL 700 cannot be sold separately from TL 701, because they are considered one legal parcel of 41 acres by planning.

Do not use the EFU-5 land schedule to value tax lot 700. Instead, combine with other Class II land in tax lot 701

and use the commercial farmland schedule.

The following demonstrates side-by-side calculations: (See EX6-701 for Tax Lot 701)

ASSESSMENT BASED ON MARKET VALUE SPECIALLY ASSESSED

(ORS 308.146 and 308.205)

(ORS 308A.107 and 308A.256)

Real Market Value: (RMV) Specially Assessed Value: (SAV) (RMV)

MARKET PORTION MARKET PORTION

TL 700 Improvement RMV TL 700 Improvement RMV

Dwelling $125,000 Dwelling $125,000

Barn, Machine Shed, Irrigation, etc. $100,000 Barn, Machine Shed, Irrigation, etc. $100,000

Total MARKET PORTION RMV

$225,000 Total MARKET PORTION RMV $225,000

SPECIALLY ASSESSED PORTION SPECIALLY ASSESSED PORTION

Tax Lot 700 HS Value Tax Lot 700 HS Value

Tax Lot 700

Class II, 5AC x $4,150 $20,750

Good View $30,000

Tax Lot 701

Class ll, 16AC x $4,150 $66,400

Class lll, 20AC x $3,500 $70,000

HS Bare Land Value Base (RMV) $187,150

Homesite Homesite

Class II 1 AC $4,150 $187,150 / 41AC = HS Land SAV $4,565 (AVG RMV/AC)

Good View $30,000

OSD (RMV) $10,000 OSD (SAV) ($4,000 maximum) $4,000

Homesite RMV $44,150 Homesite SAV $8,565

$8,565

TL 700 Remaining Acres RMV TL 700 Remaining Acres SAV

Class II 4AC x $4,150 = $16,600 Class II 4AC x $551 = $2,204 $2,204

Remaining Acres RMV $16,600 Remaining Acres SAV $2,204

Total SA PORTION RMV $60,750

$60,750 Total SA PORTION SAV $10,769

Total RMV for account $285,750 Total SAV for account (M-5)

Maximum Assessed Value: (MAV) Maximum Special Assessed Value: (MSAV) (MAV)

MARKET PORTION

TL 700 MARKET PORTION MAV

MARKET PORTION RMV (New year) $225,000

TL 700 account MAV Divided by New Total RMV (New year) $285,750

Prior year MAV $200,025

(tax roll) Equals MARKET PORTION Apportionment 0.7874

Prior year AV x 1.03 $206,025 Account MAV $206,025

Greater of = Account MAV $206,025 Times MARKET PORTION Apportionment 0.7874

Total MARKET PORTION MAV $162,224

SPECIALLY ASSESSED PORTION

Tax Lot 700 Land Value

Prior Year HS MSAV $3,195 (tax roll)

Prior Year HS AV x 103% $3,290

Greater of = HS Land MSAV $3,290

OSD Prior Year MSAV $4,120 (tax roll)

OSD Prior Year AV x 103% $4,120

Greater of = OSD MSAV $4,120

Homesite MSAV $7,410 $7,410

TL 700 Remaining Acres MSAV

Class II 4AC x $525 = $2,100 $2,100

Remaining acres MSAV $2,100

Total SA PORTION MSAV $9,510

Total MAV for SA account

Assessed Value as if not specially assessed: (AV) Assessed Value if specially assessed: (AV) (AV)

Lesser of MARKET PORTION RMV or MAV $162,224

Lesser of HS Land SAV or MSAV $3,290

Lesser of OSD SAV or MSAV $4,000

Total RMV for Account $285,750 Homesite AV $7,290 $7,290

Total MAV for Account

$206,025

Lesser of Class II SAV or MSAV

$2,100

TOTAL AV IF NOT SPECIAL ASSESSED $206,025 TOTAL AV IF SPECIAL ASSESSED (M-50)

ACCOUNT AV (Lesser of RMV or M-50 Value) $171,614

M-50 Calculations Example # 6-700

$171,614

$235,769

$171,734

6-64 150-303-422 (Rev. 11-07-22)

To solve for Tax Lot 701 when tax lots 700 and 701 comprise one lot of record.

-- Zoned EFU Class II farmland SAV = $551 and MSAV = $525, Class III SAV = $433 and MSAV = $413.

Real market value of Class II farmland = $4,150, Class III = $3,500

-- TL 701 16AC Class II, 20AC Class III, all farmland

Note: TL 701 cannot be sold separately from TL 700, because they are considered one legal parcel of 41 acres by planning.

Use commercial farmland schedule to value class II and III land in tax lot 701

The following demonstrates side-by-side calculations: (See EX6-700 for Tax Lot 700)

ASSESSMENT BASED ON MARKET VALUE SPECIALLY ASSESSED

(ORS 308.146 and 308.205)

(ORS 308A.107 and 308A.256)

Real Market Value: (RMV) Specially Assessed Value: (SAV) (RMV)

MARKET PORTION MARKET PORTION

TL 701 Improvement RMV TL 701 MARKET PORTION RMV

No Improvements No improvements

Total MARKET PORTION RMV

$0 Total MARKET PORTION RMV $0

SPECIALLY ASSESSED PORTION SPECIALLY ASSESSED PORTION

TL 701 Land RMV TL 701 Land SAV

Class II 16AC x $4,150 = $66,400 Class II 16AC x $551 = $8,816 $8,816

Class III 20AC x $3,500 = $70,000 Class III 20AC x $433 = $8,660 $8,660

Land RMV $136,400 Land SAV $17,476

Total SA PORTION RMV $136,400

$136,400

Total SA PORTION SAV $17,476

Total RMV for account $136,400 Total SAV for account (M-5)

Maximum Assessed Value: (MAV) Maximum Special Assessed Value: (MSAV) (MAV)

MARKET PORTION

TL 701 MARKET PORTION MAV

MARKET PORTION RMV (New year) $0

TL 701 account MAV Divided by New Total RMV (New year) $136,400

Prior year MAV $95,480

(tax roll) Equals MARKET PORTION Apportionment 0.0000

Prior year AV x 1.03 $98,344 Account MAV $98,344

Greater of = Account MAV $98,344 Times MARKET PORTION Apportionment 0.0000

Total MARKET PORTION MAV $0

SPECIALLY ASSESSED PORTION

TL 701 Land MSAV

Class II 16AC x $525 = $8,400 $8,400

Class III 20AC x $413 = $8,260 $8,260

Land MSAV $16,660

Total SA PORTION MSAV $16,660

Total MAV for SA account

Assessed Value as if not specially assessed: (AV) Assessed Value if specially assessed: (AV) (AV)

Lesser of MARKET PORTION RMV or MAV $0

Total RMV for Account $136,400

Lesser of Class II SAV or MSAV $8,400

Total MAV for Account $98,344

Lesser of Class III SAV or MSAV

$8,260

TOTAL AV IF NOT SPECIAL ASSESSED $98,344 TOTAL AV IF SPECIAL ASSESSED (M-50)

ACCOUNT AV (Lesser of RMV or M-50 Value) $16,660

M-50 Calculations Example # 6-701

$16,660

$17,476

$16,660

6-65 150-303-422 (Rev. 11-07-22)

M-50 calculations example 3

Specially assessed RMV, SAV, MAV, and AV calculations

Plus

Market portion RMV

$ 142,500

S A portion RMV

$ 80,000

Total RMV

$ 222,500

Constitution article

X1 sec 11

Market portion RMV

$ 142,500

S A portion SAV

H S land = $17,500

OSD = $4,000

Class II land = $1,653

Total SAV

$165,653

ORD 310.165(2)

(M-5 test)

Lesser of: total RMV or M-50 value

Assessed value

$ 123,810

Market portion MAV

$ 102,734

S A portion MSAV

H S land = $15,501

OSD = $4,120

Class II land = $1,575

Total MAV

$ 123,930

For the tax roll

Market portion

lesser of:

RMV or MAV

$ 102,734

S A portion

lesser of: (by land class)

SAV or MSAV

H S land = $ 15,501

OSD = $ 4,000

Class II land = $ 1,575

M-50 value

$ 123,810

Equals

Plus

Equals

Plus

Equals

Plus

Equals

6-66 150-303-422 (Rev. 11-07-22)

1995 commercial farmland schedule

bottom and bench land

Acres Class I Class II Class III Class IV Class V Class VI Class VII Class VIII

10 6,000 5,100 4,350 3,900 2,750 1,900 500 50

20 5,400 4,600 3,900 3,500 2,500 1,700 500 50

40 4,850 4,150 3,500 3,150 2,375 1,500 500 50

180 4,500 3,750 3,250 2,900 2,125 1,250 250 50

400 4,500 3,500 3,000 2,750 1,900 1,000 250 50

Note: A similar schedule would be developed for forestland sales.

Note: The above schedule reects commercial farmland values. Separate value schedules may need to be devel-

oped for parcels which are smaller than that deemed to be economically viable by the market for commercial

farming activities typical of the area. The values of these smaller parcels will probably reect a highest-and-best-

use as rural residential. If this is the case, the procedure for developing an RMV schedule will be the same as that

for rural tracts. (See schedule below.)

Rural tract lands AR 5 zoning

average rural setting

Acres Price/Ac Acres Price/Ac Acres Price/Ac Acres Price/Ac

1.0 $40,000 9.0 $10,500 17.0 $ 6,000 45.0 $ 4,500

2.0 $30,000 10.0 $ 9,750 18.0 $ 5,500 50.0 $ 4,500

3.0 $25,000 11.0 $ 8,500 19.0 $ 5,500 55.0 $ 4,500

4.0 $20,000 12.0 $ 8,000 20.0 $ 5,000 60.0 $ 4,250

5.0 $17,500 13.0 $ 7,500 25.0 $ 5,000 65.0 $ 4,250

6.0 $15,000 14.0 $ 7,000 30.0 $ 4,750

7.0 $13,000 15.0 $ 6,500 35.0 $ 4,750

8.0 $11,500 16.0 $ 6,000 40.0 $ 4,500

View factors: Creek or stream frontage:

Good view add $30,000 add $10,000

Average view add $25,000 park-like setting:

Fair view add $15,000 add $ 5,000

On-site development: Septic + well only = $6,000; Fair = $8,000; Avg. = $10,000; Good = $15,000

Specially Assessed onsite developments: Maximum $4,000

Note: Value attributable to being a buildable site is intrinsic in the bare land value and can’t be isolated.

6-67 150-303-422 (Rev. 11-07-22)

Madrona Lane

River Road

Lincoln Lane

100 200 300

400 500

501

600

700

5.00 ac

701

36.00 ac

800

43.00 ac

900

19.00 ac

1000 1001

1100 1200

Tax lot map

6-68 150-303-422 (Rev. 11-07-22)

Appendix F: Disqualification

Non-EFU income disqualification procedure (OAR 150-308-1050) .................................. 6-68

Income letter requesting non-EFU questionnaire (OAR 150-308-1050) ........................... 6-69

Intent to disqualify non-EFU farm use special assessment .............................................. 6-70

Disqualification notification procedures (ORS 308A.718) ................................................. 6-71

MAV exceptions following disqualification .......................................................................6-132

M-50 2006 changed property analysis codes .....................................................................6-134

Change in special assessment (heptagon diagram) ..........................................................6-137

6-69 150-303-422 (Rev. 11-07-22)

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OAR 150-308-1050

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6-70 150-303-422 (Rev. 11-07-22)

Income letter requesting

non-EFU questionnaire

County letterhead

Date:

Name

Address

City, State, ZIP

Account #: Map #: Acres:

Dear Property Owner:

Your land is being specially assessed at farm-use values under ORS 308A.068. Oregon law ORS 308A.071

requires that the land must produce a certain amount of gross income to remain eligible for this special assess-

ment. To comply with ORS 308A.071, we are requesting you to complete and return the enclosed questionnaire.

Oregon Administrative Rule 150-308-1050 requires this income questionnaire to be returned to the Asses-

sor’s office no later than April 15. Failure to return the questionnaire may result in disqualification of your land

from special assessment.

If you have any questions or would like additional information on this matter, you may call us at

xxx-xxx-xxxx.

____________________________

(Assessor)

Enclosure

6-71 150-303-422 (Rev. 11-07-22)

Intent to disqualify

Non-EFU farm use special assessment

Date:

Name

Address

City, State, ZIP

Account #: Map #: Acres:

Dear Property Owner:

On Feb. 15, 2007, pursuant to Oregon Administrative Rule 150-308-1050, we mailed a gross income questionnaire

for specially assessed farmland outside of an EFU zone to you at the above address. April 15 was the deadline for

filing the questionnaire with the assessor.

Reason 1—We haven’t yet received the questionnaire and in compliance with Oregon Administrative Rule 150-308-

1050, this is official notification of the assessor’s intent to disqualify the above referenced property from the farm

use special assessment program.

Reason 2—The questionnaire you submitted doesn’t have sufficient information to determine whether or not the

property continues to meet the income requirements of ORS 308A.071. In compliance with Oregon Administrative

Rule 150-308-1050(4)(d), this is official notification of the assessor’s intent to disqualify the above referenced property

from the farm use special assessment program.

It will be necessary to disqualify your land from farm use special assessment, unless within 30 days from the date

of this notice you show cause why this land shouldn’t be disqualified. You may appear in person, call or write a

letter within this time period and we will consider your explanation as to why the subject property should remain

specially assessed.

After the 30 day show cause period has passed your land will be disqualified if we don’t have sufficient information

to determine the land meets the income requirements of ORS 308A.071. Once the land is disqualified if you believe

your land did meet the requirements to receive farm use special assessment, then ORS 308A.089 allows you to

submit an application for requalification on or before December 15 of the tax year for which the disqualification is

first in effect. The new application must show that the land meets all use and income requirements of an application

the same as anyone applying for farm use special assessment for the first time. Additionally, ORS 308A.089 requires

a graduated late fee not less than $10 and no more than $250. (ORS 308A.089)

Call if you have any questions.

Sincerely,

6-72 150-303-422 (Rev. 11-07-22)

Oregon Department of Revenue—Property Tax Division

January 1, 2015

Disqualication

Notication Procedures

ORS 308A.718

ORS 308A.724

6-73 150-303-422 (Rev. 11-07-22)

Table of contents

I. Statute 308A.718 ........................................................................................................................................... 6-73

II. Statute 308A.724 ........................................................................................................................................... 6-99

III. Sample letter instructions ............................................................................................................................ 6-101

IV. Sample letters .............................................................................................................................................. 6-103

6-74 150-303-422 (Rev. 11-07-22)

308A.718 Assessor to send notice upon disqualification or forestland change in use; deadline; appeal; change

in special assessment explanation; remediation plan notification. (1) The county assessor shall send notice as

provided in this section if land is disqualified under any of the following special assessment programs:

(a) Farm use special assessment under ORS 308A.050 to 308A.128.

(b) Farm or forest homesite special assessment under ORS 308A.250 to 308A.259.

(d) Eastern Oregon designated forestland special assessment under ORS 321.805 to 321.855.

(e) Small tract forestland special assessment under ORS 321.700 to 321.754.

(f) Wildlife habitat special assessment under ORS 308A.403 to 308A.430.

(g) Conservation easement special assessment under ORS 308A.450 to 308A.465.

(2) Notwithstanding that a change in use described in this section is not a disqualification, the assessor shall

send notice as provided in this section when the highest and best use of land changes from forestland to a differ-

ent highest and best use.

(3) Within 30 days after the date that land is disqualified from special assessment, the assessor shall notify the

taxpayer in writing of the disqualification and shall state the reason for the disqualification.

(4) Following receipt of the notification, the taxpayer may appeal the assessor’s determination to the Oregon

Tax Court within the time and in the manner provided in ORS 305.404 to 305.560.

(5)(a) When any land has been granted special assessment under any of the special assessment laws listed in

subsection (1) of this section and the land is disqualified from such special assessment, the county assessor shall

furnish the owner with a written explanation summarizing:

(A) ORS 308A.706 (1)(d) (relating to change in special assessment);

(B) ORS 308A.727 (relating to change in use to open space use special assessment for certain golf courses);

described in this paragraph; and

(D) The imposition of any penalties that would result from the disqualification if no requalification or reclas-

sification is made under one of the other special assessment laws listed in this paragraph.

(b) The written explanation required by this subsection shall be given in conjunction either with the notice of

disqualification required under this section or with an order or notice of disqualification otherwise provided by

law.

(c)(A) If no notice of disqualification is required to be made by this section or other provision of law, the writ-

ten explanation required by this subsection shall be made by the county assessor.

(B) A written explanation made under this paragraph shall be made by the assessor within 30 days of the effec-

tive date of the disqualification.

(6) Subsections (1) to (5) of this section do not apply if the reason for the disqualification is:

(a) The result of a request for disqualification by the property owner; or

(b) Because the property is being acquired by a government or tax-exempt entity.

(7) Within 30 days after the date the notification required under subsection (3) of this section is mailed, a tax-

payer intending to implement a remediation plan as defined in ORS 308A.053 on the disqualified land that is the

subject of the notification must notify the assessor in writing of the taxpayer’s intention to seek certification for

the remediation plan. [1999 c.314 §39; 2003 c.454 §38; 2003 c.539 §18; 2003 c.621 §89; 2007 c.809 §12; 2009 c.776 §7]

6-75 150-303-422 (Rev. 11-07-22)

Explanation of Statute 308A.718

All of the following language (in black) for the Explanation of ORS 308A.718 is statutory. ORS

308A.718 is quoted word for word and the appropriate statutory information for disqualications

have been inserted (in red) into the ORS 308A.718 language where applicable. Language in ORS

308A.718 has been (bolded or underlined) to add emphasis for importance. “Notes” have been

added (in shaded blue) when appropriate to provide additional interpretation.

ORS 308A.718 Assessor to send notice upon disqualication or forestland change in use;

deadline; appeal; change in special assessment explanation, remediation plan notication.

(1) The county assessor shall send notice as provided in this section if land is disqualied under any

of the following special assessment programs:

(a) Farm use special assessment under ORS 308A.050 to 308A.128.

EFU Farmland—ORS 308A.113(1)

(a) No longer in use;

(b) Zone change to non-EFU;

Non-EFU Farmland—ORS 308A.116(1);

(a) Owner request;

(b) Sale or transfer to an ownership making the land exempt;

(d) Recording a subdivision plat.

(b) Farm or forest homesite special assessment under ORS 308A.250 to 308A.259.

Farm or Forest Homesite ORS 308A.259(1).

(a) Not being used in conjunction with forestland;

(b) Not being used in conjunction with farmland and is being used for a non-farm purpose.

(Vacancy is not a change in use).

Note: If a homesite becomes disqualied for the establishment of a non-farm dwelling under

ORS 215.236 the additional tax is collectable under ORS 308A.259(2) and (3). Otherwise,

there is no additional tax for homesite disqualications.

W.O. Forestland—ORS 321.359(1)(b).

(A) Owner request;

(B) Sale or transfer to an ownership making the land exempt;

(D) Recording a subdivision plat.

W.O. Forestland—ORS 215.236 non-farm dwelling in an EFU zone.

(d) Eastern Oregon designated forestland special assessment under ORS 321.805 to 321.855.

E.O. Forestland—ORS 321.842(1)(b).

(A) Owner request;

(B) Sale or transfer to an ownership making the land exempt;

(D) Recording a subdivision plat.

E.O. Forestland—ORS 215.236 non-farm dwelling in an EFU zone.

(e) Small Tract Forestland special assessment under ORS 321.700 to 321.754.

6-76 150-303-422 (Rev. 11-07-22)

STF Option—ORS 321.712(1)

(a) Owner acquisition of contiguous land held in common ownership; Assessor may

disqualify—see note below.

(b) Owner acquisition of common ownership exceeds 5,000 acres of Oregon forestland;

Disqualication required—see note below.

Forestland; Disqualication required—see note below.

(d) Change of use to a use that is no longer forestland. Disqualication required—see note

below.

Note: ORS 321.712(3) states “the county Assessor may disqualify Small Tract Forestland if

the assessor discovers an acquisition, sale, or change in use… for which the owner did not

give written notication”. Because of the requirements of ORS 321.716 the only time the

Assessor “may” disqualify is under ORS 321.712(3)(a) Owner acquisition of contiguous

land held in common ownership. ORS 321.712(3)(b), (c), and (d) are reasons the assessor

must disqualify as specied under ORS 308A.716.

STF Option—ORS 321.716(1)

(a) Sale or transfer of STF forestland;

(b) No longer in use;

forestland;

(d) Owner owning or holding in common ownership less than 10 acres of Oregon

forestland;

(e) Written notice from State Forester that the land no longer meets Small Tract Forestland

requirements;

(f) STF land qualifying for another special assessment under ORS 308A.706(1)(d)(A), (B), (F)

or (G);

(g) Recording a subdivision plat.

(f) Wildlife habitat special assessment under ORS 308A.403 to 308A.430.

WLH—ORS 308A.430(2)

(a) Written notice from Oregon Department of Fish and Wildlife the plan isn’t being

implemented as approved;

(b) Owner request;

(d) WLH land qualifying for another special assessment listed in ORS 308A.703(1);

(e) Recording a subdivision plat.

Note: No provision in statute to disqualify land in wildlife habitat special assessment

under ORS 215.236 for establishment of a non-farm dwelling in an EFU zone. If the land

is disqualied from EFU, open space, designated forestland or small tract forestland then

the land may requalify for Wildlife Habitat Special assessment under ORS 215.236(6) and

additional taxes may be deferred under ORS 308A.706(1)(d) (only applies in counties that

offer WLH).

(g) Conservation Easement special assessment under ORS 308A.450 to 308A.465.

CE—ORS 308A.465(4)

(a) Failure of the holder to provide certication within 90 days every three years or upon

assessor request;

(b) Notice from the holder the land isn’t being managed in accordance with the terms

6-77 150-303-422 (Rev. 11-07-22)

of the conservation easement and/or the conservation easement no longer meets the

requirements for being considered exclusively for conservation purposes under section

170(h) of the Internal Revenue Code;

because the claim is no longer a qualied conservation contribution under section 170(h)

of the Internal Revenue Code;

(d) Owner request;

(e) Sale or transfer to an ownership making the land exempt;

(f) The land qualifying for another special assessment listed in ORS 308A.706 (1)(d);

(g) Recording a subdivision plat.

(2) Notwithstanding that a change in use described in this section isn’t a disqualication, the assessor

shall send notice as provided in this section when the highest and best use of land changes from

forestland to a different highest and best use.

(3) Within 30 days after the date that land is disqualied from special assessment, the assessor shall

notify the taxpayer in writing of the disqualication and shall state the reason for the disqualication.

A disqualication is effective the date the assessment and tax roll changes; before July 1 it is

important to keep the timing of the notication letter within 30 days of the date of the roll change.

[Meeks v. Dept. of Revenue, 7 OTR 113 (1977)] Roll changes must be made prior to July 1 to be

effective for the current assessment and tax year.

For “no longer in use” disqualications, the “notication letter under ORS 308A.718” must be

accomplished no later than August 14. When the August 14 disqualication requirements have

been accomplished the disqualication becomes effective back to January 1 of the assessment year

as specied in the following special assessment statutes:

Exclusive Farm Use, ORS 308A.113(1)(a) and (3);

Non-Exclusive Farm Use, ORS 308A.116(1)(c) and (6);

Designated Forestland western Oregon, ORS 321.359(1)(b)(C) and 321.366;

Designated Forestland eastern Oregon, ORS 321.842(1)(b)(C) and 321.845.

Note: The August 14 date provision for “no longer in use” doesn’t apply to Small Tract

Forestland, Wildlife Habitat, or Conservation Easement Special Assessment programs.

(4) Following receipt of the notication, the taxpayer may appeal the Assessor’s determination to the

Oregon Tax Court within the time and in the manner provided in ORS 305.404 to 305.560.

ORS 305.505(1) provides the criteria for appeals made to the Oregon Tax court and generally

directs an appeal to the Magistrate division unless specically designated by the tax court judge for

hearing at the regular division. A party to the appeal may request mediation as specied in ORS

305.505(2). The manner of appeals to the Magistrate Division of the Oregon Tax Court is found

under ORS 305.275. The timing of appeals to the Magistrate Division is found under ORS 305.280.

ORS 305.280(1) requires the appeal to be led within 90 days after the disqualication becomes

actually known to the taxpayer, but in no event later than one year after the disqualication has

been made.

(5)(a) When any land has been granted special assessment under any of the special assessment laws

listed in subsection (1) of this section and the land is disqualied from such special assessment, the

county assessor shall furnish the owner with a written explanation summarizing:

(A) ORS 308A.706(1)(d) (relating to change in special assessment);

ORS 308A.706(1)(d)

6-78 150-303-422 (Rev. 11-07-22)

(A) ORS 308A.062, Exclusive Farm Use (EFU)

(B) ORS 308A.068, Non-Exclusive Farm Use (Non-EFU

(D) ORS 321.839, Eastern Oregon Designated Forestland (DFL)

(E) ORS 321.709, Small Tract Forestland (STF)

(F) ORS 308A.424. Wildlife Habitat (WLH)

(G) ORS 308A.456 Conservation Easement (CE)

(B) ORS 308A.727 (relating to change in use to open space use special assessment for certain

golf courses);

classication described in this paragraph; and

(D) The imposition of any penalties that would result from the disqualication if no re-

qualication or reclassication is made under one of the other special assessment laws listed

in this paragraph.

Note: See Additional tax information in “Disqualication group sample letters”.

(b) The written explanation required by this subsection shall be given in conjunction either with the

notice of disqualication required under this section or with an order or notice of disqualication

otherwise provided by law.

Note: See “Explanation of ORS 308A.724” and “Disqualication group sample letters”.

law, the written explanation required by this subsection shall be made by the county assessor.

(B) A written explanation made under this paragraph shall be made by the Assessor within 30

days of the effective date of the disqualication.

(6) Subsections (1) to (5) of this section don’t apply if the reason for the disqualication is:

(a) The result of a request for disqualication by the property owner; or

(No notice under ORS 308A.718 is required) (See Group F).

(b) Because the property is being acquired by a government or tax-exempt entity.

(7) Within 30 days after the date the notication required under subsection (3) of this section is

mailed, a taxpayer intending to implement a remediation plan as dened in ORS 308A.053 on the

disqualied land that is the subject of the notication must notify the assessor in writing of the

taxpayer’s intention to seek certication for the remediation plan.)

[1999 c.314 §39; 2003 c.454 §38; 2003 c.539 §18; 2003 c.621 §89; 2007 c.809 §12; 2009 c.776 §7]

(No notice under ORS 308A.718 is required.) (See Group F.)

6-79 150-303-422 (Rev. 11-07-22)

308A.724 Application for change of special assessment following disqualification; time for meeting farm

use income requirements; application due dates; limitation on special assessments for disqualified wildlife

habitat and conservation easement land. (1)(a) In order for additional taxes imposed under ORS 308A.703 to be

deferred under ORS 308A.706 (1)(d) (relating to change in special assessment), the owner must file an application

or claim for classification under another special assessment law.

(b) If the disqualification is effective prior to July 1 in any year, the owner shall file the required claim or ap-

plication on or before August 1 of that year.

the classification on the current assessment and tax rolls, and the owner shall file the required claim or application

in the next calendar year in accordance with the laws governing the particular special assessment program.

(2) If an owner of land disqualified under one of the special assessment laws listed in ORS 308A.706 (1)(d)

seeks to qualify for farm use special assessment of nonexclusive farm use zone farmland under ORS 308A.068,

the owner shall have five years, beginning with the first year in which application is made under this section, to

qualify for the two-year farm use requirement of ORS 308A.068 and the income requirement under ORS 308A.071.

(3) Notwithstanding subsection (1) of this section, an owner may make application under this section at any

time within 30 days of the date notice of disqualification is sent by the assessor under ORS 308A.718.

(4) Notwithstanding subsections (1) to (3) of this section:

(a) An owner of land disqualified from wildlife habitat special assessment under ORS 308A.430 that was previ-

ously subject to ORS 215.236 (5), except for conservation easement special assessment, may not apply for another

special assessment under this section without first satisfying the requirements of ORS 215.236 (5); and

(b) An owner of land disqualified from conservation easement special assessment under ORS 308A.465, except

for wildlife habitat special assessment, may not apply for another special assessment under this section without

first satisfying the requirements of ORS 215.236 (5). [1999 c.314 §41; 2003 c.454 §40; 2003 c.539 §20; 2003 c.621 §90;

2007 c.809 §14]

6-80 150-303-422 (Rev. 11-07-22)

Explanation of Statute 308A.724

All of the following language (in Black) for the Explanation of ORS 308A.724 is statutory. ORS 308A.724 is

quoted word for word. Language in ORS 308A.724 has been (bolded or underlined) to add emphasis for

importance. “Notes” have been added (in Shaded Blue) when appropriate to provide additional interpretation.

Change of special assessment

ORS 308A.724 Application for change of special assessment following disqualication; time for

meeting farm use income requirements; application due dates; limitation on special assessments for

disqualied wildlife habitat land.

(1) (a) In order for additional taxes imposed under ORS 308A.703 to be deferred under ORS

308A.706(1)(d) (relating to change in special assessment), the owner must le an application or

claim for classication under another special assessment law.

(b) If the disqualication is effective prior to July 1 in any year, the owner shall le the required

claim or application on or before August 1 of that year.

Note: Disqualications occurring between January 1 and June 30 are processed under this statute.

Includes “No longer in use” disqualications occurring only between January 1 and August 14. Do not

include subdivisions (additional taxes cannot be deferred under ORS 308A.706(1)(d), for subdivisions

use ORS 308A.724(3).

the classication on the current assessment and tax rolls, and the owner shall le the required claim

or application in the next calendar year in accordance with the laws governing the particular special

assessment program.

Disqualications between July 1 and December 31 are processed under this statute. Includes “No

longer in use” disqualications occurring only between August 15 and December 31.

(2) If an owner of land disqualied under one of the special assessment laws listed in ORS 308A.706(1)

(d) seeks to qualify for farm use special assessment of non-exclusive farm use zone farmland under

ORS 308A.068, the owner shall have ve years, beginning with the rst year in which application is

made under this section, to qualify for the two-year farm use requirement of ORS 308A.068 and the

income requirement under ORS 308A.071.

(3) Notwithstanding subsection (1) of this section, an owner may make application under this section

at any time within 30 days of the date notice of disqualication is sent by the Assessor under ORS

308A.718.

Note: Following a disqualication, the 30 day application period is the general rule. Special

provisions under ORS 308A.724(1)(b) and (c) (above) allow for additional timing of applications

which only applies following a change in special assessment under ORS 308A.706(1)(d). Applications

or qualication for a different special assessment that do not involve a disqualication under ORS

308A.706(1)(d) must meet the 30 day time period as specied by this statute. If an owner wants to

change from one special assessment to another it is recommended to process a disqualication as

specied in Group C Sample Letters to allow a rollover under ORS 308A.706(1)(d). (See Application

section of this manual for application or qualication dates and timelines.)

(4) Notwithstanding subsections (1) to (3) of this section:

(a) An owner of land disqualied from wildlife habitat special assessment under ORS 308A.430 that

was previously subject to ORS 215.236 (5), except for conservation easement special assessment,

may not apply for another special assessment under this section without rst satisfying the

requirements of ORS 215.236 (5); and

6-81 150-303-422 (Rev. 11-07-22)

(b) An owner of land disqualied from conservation easement special assessment under ORS

308A.465, except for wildlife habitat special assessment, may not apply for another special

assessment under this section without rst satisfying the requirements of ORS 215.236 (5). [1999

c.314 §41; 2003 c.454 §40; 2003 c.539 §20; 2003 c.621 §90; 2007 c.809 §14]

Sample letters instructions—Group’s A through Group F

Reasons for disqualication have been grouped. Each group has similar disqualication characteristics.

A brief explanation for each disqualication group is provided at the beginning of each sample

letter. Small Tract Forestland (STF), Wildlife Habitat (WLH) and Conservation Easement (CE)

disqualications require different procedures and were broken out separately to avoid confusion and

misinterpretation (See Group A-STF, Group A-WLH, Group A-CE and Group B-STF, Group B-WLH,

Group B-CE). The sample letters follow the statutory procedures explained previously. Language in the

sample letters have been (bolded or underlined) to add emphasis for importance. “Notes” have been

added in (blue shade) when appropriate to provide additional interpretation or instructions to county

personnel processing the letters. The (blue shade) information is not intended to be part of the letter

to the taxpayer.

Each disqualication should be carefully studied before deciding the appropriate reason or basis for

disqualication. After deciding the reason for disqualication, then all information in the sample

letter that does not pertain to the disqualication should be deleted, and any additional information

that would be appropriate should be added.

ORS 308A.718 requires the disqualication notication letter to the taxpayer must be in writing

within 30 days after the date the land has been disqualied.

The disqualication is not effective until the assessment and tax rolls have been changed. Oregon

Tax Court decision Meeks v. DOR, 7 OTR 113 (1977) page 117 states “the actual change of the roll

by the county assessor or his duly authorized agent is the essential overt act which proves the

assessor’s exercise of his judgment and establishes the disqualication as having actually occurred”.

The general rule for a disqualication to be effective for the current tax year is to change the

assessment and tax rolls by no later than June 30.

Special provisions allow discovery for “no longer in use” disqualication’s for EFU ORS 308A.113;

Non-EFU ORS 308A.116; DFL WO ORS 321.366 and DFL EO ORS 321.845 special assessments

provided both the “notication letter” is mailed to the taxpayer no later than August 14 of the

assessment year and the “assessment and tax rolls” have also been changed no later than August 14.

(For additional information on timing of disqualications see disqualication section of the Farm

Manual)

These samples letters are only a guide to provide statutory compliance with ORS 308A.718 and

308A.724. If your county assessor elects to use these letters, it is encouraged that counties further

personalize or tailor them to t the situation as the county may deem appropriate.

6-82 150-303-422 (Rev. 11-07-22)

Sample letter—Group A

Note: This group of disqualications is for a reason that requires notication under ORS 308A.718 and

additional taxes will be collected.

Account number(s) Code(s) Zone Disqualiﬁed acreage

In compliance with ORS 308A.718 and 308A.724, this is ofcial notication that the special assessment

of ______ acres of ______________________land on the above real property account(s) have been

disqualied by the Assessor for the following reason.

(Choose the correct reason for disqualication and eliminate the others.)

___ The land is no longer qualied because the land has changed to a non-qualifying use such as

residential, commercial or industrial or other use incompatible with returning the land to a

special assessment program. The land has been disqualied from special assessment under:

(Choose the appropriate program.)

• Exclusive Farm Use ORS 308A.113(1)(a);

• Non-Exclusive Farm Use ORS 308A.116(1)(c);

• Designated Forestland ORS 321.359(1)(b)(C), Western Oregon;

• Designated Forestland ORS 321.842(1)(b)(C), Eastern Oregon;

Any land that you have changed the use incompatible with returning the land to special assessment

programs will be required to be disqualied and pay additional taxes.

(Add this sentence if the land becomes exempt by “application”.)

A request to withdraw the land from special assessment by “application” for a property tax exemption

program is an incompatible use change.

When land is sold or acquired to an ownership making the land exempt a disqualication notice is not

required as specied in ORS 308A.718(6) (See Group F).

Please review the “Special assessment qualication” section of this disqualication notice. If you

believe any portion of the land can meet the qualication requirements of any of these special

assessments (Choose appropriate time period below.)

(Time period for disqualications occurring effective for the current tax year.)

in accordance with ORS 308A.724(1)(b), the application or claim for a change to another special

assessment under ORS 308A.706(1)(d) must be submitted within 30 days after the date on the notice of

disqualication or by August 1 of the year in which the notice is mailed, whichever date is later.

“No longer in use” disqualications for EFU ORS 308A.113; Non-EFU ORS 308A.116; DFL WO

ORS 321.366 and DFL EO ORS 321.845 have special provisions which require this disqualication

notication letter must be mailed no later than August 14. The assessment and tax rolls must also be

changed no later than August 14 for the disqualication to be effective for the current assessment and

tax year.

STF, WLH, and CE do not have special provisions for “No longer in use” disqualications. Therefore,

disqualication from these programs must occur by no later than June 30 to be effective for the current

tax year.

(Time period for disqualications occurring effective for the next tax year.)

6-83 150-303-422 (Rev. 11-07-22)

in accordance with ORS 308A.724(1)(c) if the disqualication is effective on or after July 1 in any year,

the county taxing authorities shall continue the classication on the current tax rolls, and the owner

shall le the required claim or application under ORS 308A.706(1)(d) in the next calendar year, no later

than April 1, in accordance with the laws governing the particular special assessment program.

This disqualication assumes it is for a reason that all of the acres disqualied have changed use and

the current use cannot meet qualication requirements of any of the special assessment programs.

The above paragraph is inserted to satisfy the courts just in case an event occurs, that the assessor is

unaware of, that may possibly qualify any of the land for a change in special assessment. If the assessor

is aware the owner may possibly qualify any of the acres for special assessment under ORS 308A.706(1)

(d) or 308A.727 (open space), those acres should be separately processed under Group B.

___ Recording of a subdivision plat under ORS Chapter 92 requires the disqualication of the land

from:

• Non-Exclusive Farm Use, ORS 308A.116(1)(d) and (4);

• Designated Forestland ORS 321.359(1)(b)(D) and (3), Western Oregon;

• Designated Forestland ORS 321.842(1)(b)(D) and (3), Eastern Oregon;

(Process any land in STF, WLH or CE as appropriate under separate letters)

This disqualication statute species that a landowner may submit a claim or application to requalify

for (insert here, the special assessment program that the land was under at the time of the subdivision

disqualication) _________________special assessment after “payment of all additional taxes, any

interest or penalty that remains due and owing on the land”.

Additional tax to be extended to the 20XX–20XX tax rolls for collection: $_________________

Following this disqualication any land that is no longer in a qualifying special assessment

program will be based on market value as calculated under ORS 308.156.

Land disqualied from insert here, farm or forest use must comply with any applicable local

government zoning ordinances, governing minimum lot or parcel acreage before the land can

requalify for special assessment. ORS 308A.724(3) allows 30 days from the date of this disqualication

notication to apply for insert here, the same farm or forest program requalication for the current

assessment.

Note: ORS 308A.116(4) Non-EFU; 321.359(3) DFL western Oregon; and 321.842(3) DFL eastern Oregon;

species that land disqualied for the act of recording a subdivision may only re-qualify for the special

assessment they were in at the time of disqualication. The additional taxes are required to be paid and

the land owner cannot change to a different special assessment and defer the additional taxes under

ORS 308A.706(1)(d).

Delete down to “Special assessment qualication”.

___ Open space land has been requested to be withdrawn from classication under ORS

308A.318(2).

Review the “Special Assessment Qualication” section of this declassication notice if you desire to

qualify any portion of the land for Wildlife Habitat special assessment or Conservation Easement

special assessment as specied in ORS 308A.318(4). ORS 308A.724(3) allows 30 days from the date of

this declassication notice to apply for Wildlife Habitat or Conservation Easement special assessment.

Note: A change to other special assessments under ORS 308A.706(1)(d) is not offered because Open

Space is not identied for deferral under ORS 308A.706(1)(d), therefore use ORS 308A.724(3) which

allows 30 days to apply for WLH or CE following the disqualication.

Any land that is withdrawn from Open Space and does not change to Wildlife Habitat special

assessment or Conservation Easement special assessment under 308A.318(4) will be required to

6-84 150-303-422 (Rev. 11-07-22)

be declassied and pay any additional taxes due as a result of the withdrawal from Open Space

classication.

ORS 308A.718 does not require a notication letter for the withdrawal or declassication of Open space

specially assessed land. This letter is being provided as a possible recommendation for processing the

declassication of Open space land.

___ Other: _________________________________________________________________

Additional tax information—Open space

Additional tax procedure for land disqualied from “Open space special assessment”.

Open space additional taxes are calculated for the number of years the property has been in open space

special assessment as specied in ORS 308A.312 and 308A.318.

All acres (or any portion) may possibly qualify for a change to wildlife habitat or conservation

easement special assessment under ORS 308A.318(4). As specied in ORS 308A.318(4) changing to

wildlife habitat or conservation easement special assessment will require any open space additional

taxes be frozen and remain a potential additional tax while the land is in wildlife habitat or

conservation easement special assessment. The open space additional taxes will remain separate from

and in addition to wildlife habitat or conservation easement potential additional taxes. If the land ever

becomes disqualied from wildlife habitat or conservation easement special assessment and again

becomes qualied for open space special assessment, the open space potential additional tax calculation

shall resume as of the date of the renewed open space use special assessment qualication.

(To qualify for wildlife habitat or conservation easement special assessment, see “Change in Special

Assessment” section of this notication letter)

As specied in ORS 308A.318(4) if the land qualies for WLH or CE then separate notations must

be maintained on the assessment and tax rolls for open space and wildlife habitat or conservation

easement potential additional taxes.

Open space additional tax to be extended to the 20XX-20XX tax rolls for collection:

$________________

(These additional taxes will be deferred under ORS 308A.318(4) with a timely change to wildlife habitat

or conservation easement special assessment)

Note: If an “additional penalty” is required follow ORS 308A.321 and add appropriate language

to address the amount of the additional penalty(s). Land that is subject to these penalties is not in

compliance with open space requirements and therefore a change to WLH or CE should not be offered

under ORS 308A.318(4).

Following this declassication any land that is no longer in a special assessment program will be

based on market value as calculated under ORS 308.156.

Delete down to “Special assessment qualication”.

Additional tax information

Additional tax procedure for land disqualied from “all special assessments other than Open Space”.

(Delete above “open space special assessment” additional tax procedures.)

As specied in ORS 308A.700 to 733 for each year, beginning with the last year the land was under

special assessment, the additional tax is calculated as the difference between the taxes assessed against

the land in each year and the taxes that would otherwise have been assessed against the land had the

land not been in special assessment.

6-85 150-303-422 (Rev. 11-07-22)

Additional taxes are calculated for the number of years the property has been in special assessment, not

to exceed _______________ (Choose the appropriate years of calculation.)

• 10 years, in the case of farmland located within an Exclusive Farm Use zone.

But only if the land, immediately following disqualication, remains outside of an Urban Growth

Boundary.

• Five years. Applies to all other special assessment disqualications.

Additional tax to be extended to the 20XX-20XX tax rolls for collection: $_________________

(Additional taxes will be deferred under ORS 308A.706(1)(d) for any land with a timely change in

special assessment)

Following this disqualication any land that is no longer in a qualifying special assessment

program will be based on market value as calculated under ORS 308.156.

Special assessment qualication

Provided that all acres (or any portion) can meet program qualication requirements, the special

assessment programs you may possibly qualify for are:

For subdivision disqualications eliminate all other options other than the special assessment the land

was under at the time of disqualication.

For Open Space declassications eliminate all other options other than Open Space, Wildlife Habitat or

Conservation Easement special assessments.

Note: If an Open Space owner desires Open Space under 308A.727 for certain golf courses that would

be a change from one Open Space use to another Open Space use and a declassication letter is not

needed. Process the change by application under ORS 308A.318(1).

Exclusive Farm Use ORS 308A.062: Any land that is within an Exclusive Farm Use zone and that is

used exclusively for farm use. “Farm use” means the current employment of land for the primary

purpose of obtaining a prot in money. Farm use is dened under ORS 308A.056. A potential additional

tax for this program is a maximum of 10 years if the land is located outside of an Urban Growth

Boundary. Otherwise, the maximum is 5 years.

Non-exclusive Farm Use ORS 308A.068: Any land that is not within an exclusive farm use zone that is

being used for farming and produces a minimum gross income requirement as specied under ORS

308A.071. If additional taxes are deferred under ORS 308A.706(1)(d) for a change in special assessment,

the owner of a property shall have ve years, beginning with the rst year application is made, to meet

the non-EFU qualication requirements as specied in ORS 308A.724(2). A potential additional tax is a

maximum of 5 years.

Designated Forestland ORS 321.358: You must have at least two contiguous acres in one ownership

and meet minimum stocking and merchantable species requirements, or have an acceptable plan for

establishment of the minimum stocking and species requirements. If your land currently does not meet

minimum stocking or species requirements, you may submit an acceptable stocking plan along with a

completed application to the Assessor’s Ofce. A potential additional tax is a maximum of 5 years.

Small Tract Forestland ORS 321.706: Eligible owners, having at least 10 acres but less than 5,000 acres

of qualied forestland in Oregon, may submit an STF Option application to have their forestland

special assessment reduced from the statutory 100% to the STF Option of 20% of the statutory specially

assessed value. The resulting tax savings will subject the qualifying property to a severance tax at the

time of harvest of any marketable timber. Any land under this special assessment that is not assessed

as highest and best use forestland must also have a second qualifying application for designated

forestland.

6-86 150-303-422 (Rev. 11-07-22)

Wildlife Habitat Conservation and Management ORS 308A.424 or 215.236(6): The land must be

located in an approved zone or area as specied under ORS 308A.415(1). A land owner must rst

initiate this special assessment program through the Oregon Department of Fish and Wildlife. When

a wildlife habitat conservation and management plan is approved by the State Department of Fish

and Wildlife and is being implemented, the owner of the land subject to the plan may apply to the

county assessor to receive wildlife habitat special assessment. Applications are available from, and

are to be submitted to the Assessor, along with a copy of the approved wildlife habitat conservation

and management plan and a certied copy of the declaration stating the plan is being implemented as

described in ORS 308A.412(3). A potential additional tax for this program is a maximum of 10 years if

the land is outside of an Urban Growth Boundary and is in an Exclusive Farm Use zone. Otherwise, the

maximum is 5 years.

Note: As specied in ORS 215.236(6) land disqualied from Wildlife Habitat special assessment

that is subject to a non-farm dwelling under ORS 215.236 may only re-qualify for Conservation

Easement special assessment. Otherwise, the land may not change

to another special assessment

without rst satisfying the requirements of ORS 215.236(5).

Conservation Easement ORS 308A.453: Land subject to a conservation easement that is held by one

or more holders and that is managed in compliance with the terms of the easement, shall receive

conservation easement special assessment for ad valorem property tax purposes. In order for land to

be subject to assessment under ORS 308A.450 to 308A.465 the terms of the conservation easement must

be capable of meeting the requirements for being considered exclusively for conservation purposes

under section 170(h) of the Internal Revenue Code if the land or easement were ever to be the subject

of a contribution; the conservation easement must be recorded in the records of the clerk of the county

in which the land is located; and a written certication from the easement holder must be led with

the county assessor stating that the conservation easement satises the requirements for conservation

easement special assessment. In the rst year of application the owner of the land may le their own

certication if a deduction has been claimed for federal income tax purposes under section 170(h) of

the internal Revenue Code for a qualied conservation contribution with respect to the conservation

easement, otherwise the holder must le the written certication to the county assessor.

Note: As specied in ORS 215.236(6) land disqualied from Conservation Easement special

assessment that is subject to a non-farm dwelling under ORS 215.236 may re-qualify only for

Wildlife Habitat special assessment provided the county offers wildlife habitat special

assessment. Otherwise, the land may not change

to another special assessment without rst

satisfying the requirements of ORS 215.236(5).

Open Space Lands ORS 308A.727: Submit an application to the Assessor. Within 10 days of the

application the Assessor will refer the application to the appropriate Planning Commission for

approval under ORS 308A.309 and ORS 308A.312. The application shall be acted upon in the same

manner as an amendment to the Comprehensive Plan. As specied under ORS 308A.718, this change

to open space special assessment is restricted to certain golf courses under ORS 308A.727. ORS

308A.727(2) species this change will defer potential additional taxes under ORS 308A.706(1)(d), and if

the land is later withdrawn or otherwise removed from open space special assessment, the additional

taxes may be calculated and collected as specied under ORS 308A.727(3) and (4). When the land is

withdrawn or otherwise removed from open space special assessment, the potential additional taxes

are collectable for each year the land is in open space (no maximum limitation). Open space potential

additional taxes are also subject to interest and penalties as specied under ORS 308A.318 and

308A.321.

In accordance with ORS 308A.733 you have 30 days from the date you submit an application or

request to change special assessment to withdraw. Your request to withdraw the change in special

assessment must be made in writing to the assessor.

6-87 150-303-422 (Rev. 11-07-22)

Appeal rights

This disqualication may be appealed to the Oregon Tax Court, Magistrate Division, within 90 days

of receipt of this notice in accordance with ORS 305.275 and ORS 305.280 in the manner provided in

ORS 305.404 to ORS 305.560. There is a fee payable to the Magistrate. Appeal forms are available in the

Assessor’s Ofce or from the Magistrate Division.

Name: _____________________________

Title: _______________________________

By: File # Certiﬁed # Assessment year 20XX–XX

6-88 150-303-422 (Rev. 11-07-22)

Sample letter—Group A-STF

Note: This group of disqualications requires notication under ORS 308A.718 and additional taxes for

“Small Tract Forestland” will be collected.

Account number(s) Code(s) Zone Disqualiﬁed acreage

In compliance with ORS 308A.718 and 308A.724, this is ofcial notication that the special assessment

of ______________ acres of Small Tract Forestland on the above real property account(s) has been

disqualied by the Assessor for the following reason.

(Choose the correct reason for disqualication and eliminate the others.)

___ Small Tract Forestland is no longer in forestland use because the land has changed to a non-

qualifying use such as residential, commercial, industrial or other use incompatible with

returning the land to a special assessment program and has been disqualied, ORS 321.716(1)

(b);

Any land that you have changed the use incompatible with returning the land to special assessment

programs will be required to be disqualied and pay additional taxes.

(Add this sentence if the land becomes exempt by “application”.)

A request to withdraw the land from special assessment by “application” for a property tax exemption

program is an incompatible use change.

When land is sold or acquired to an ownership making the land exempt a disqualication notice is not

required as specied in ORS 308A.718(6) (See Group F).

Please review the “Special Assessment Qualication” section of this disqualication notice. If you believe

any portion of the land can meet the qualication requirements of any of these special assessments

(Choose time period below)

(Time period for disqualications occurring effective for the current tax year.)

in accordance with ORS 308A.724(1)(b) the application or claim for a change to another special

assessment under ORS 308A.706(1)(d) must be submitted within 30 days after the date on the notice of

disqualication or by August 1 of the year in which the notice is mailed whichever date is later.

STF does not have special provisions for “No longer in use” disqualications. Therefore, STF

disqualication must follow the general rule and are required to be disqualied on the tax and

assessment rolls by no later than June 30 to be effective for the current tax year.

(Time period for disqualications occurring effective for the next tax year.)

in accordance with ORS 308A.724(1)(c) if the disqualication is effective on or after July 1 in any year,

the county taxing authorities shall continue the classication on the current tax rolls, and the owner

shall le the required claim or application under ORS 308A.706(1)(d) in the next calendar year, no later

than April 1, in accordance with the laws governing the particular special assessment program.

Note: This disqualication assumes it is for a reason that all of the acres have changed use and the

current use cannot meet qualication requirements of any of the special assessment programs. The

above paragraph is inserted to satisfy the courts just in case an event occurs, that the assessor is

unaware of, that may possibly qualify the land for a change in special assessment. If the assessor is

aware the owner may possibly qualify any of the acres for special assessment under ORS 308A.706(1)

(d) or 308A.727 (open space), those acres should be processed under Group B-STF.

6-89 150-303-422 (Rev. 11-07-22)

Since the land has been disqualied from Small Tract Forestland it will not be eligible for Small Tract

Forestland special assessment for a period of ve years as required by ORS 321.709(2)(d). After the ve-

year period has expired a new application may be submitted for Small Tract Forestland.

___ Recording of a subdivision plat under ORS Chapter 92 requires the disqualication of the land

from Small Tract Forestland, ORS 321.716(1)(g);

ORS 321.716(2) species the land may requalify for “Small Tract Forestland” after paying “all

additional taxes” and any interest that remains due and owing as a result of the disqualication,

provided the land complies with any applicable local government zoning ordinances governing

minimum lot or parcel acreage for forest use.

Note: As specied in ORS 321.716(2) land disqualied for the act of recording

a subdivision may only

re-qualify for “Small Tract Forestland” special assessment. The additional taxes are required to be paid

and the land owner cannot change to a different special assessment and defer the additional taxes

under ORS 308A.706(1)(d).

Under ORS 308A.724(3), you have 30 days from the date of this disqualication notice to submit

an application to the assessor for “Small Tract Forestland” special assessment under ORS 321.706.

The additional taxes are required to be paid under ORS 308A.707 and cannot be deferred under ORS

308A.706(1)(d) for this disqualication.

If the disqualication occurs more than 30 days prior to April 1 of the current assessment year the

taxpayer will have until April 1 to le an application as specied in ORS 321.706.

___ Other: ___________________________________________________________

Additional tax information

The calculation of additional taxes for land that is disqualied from “Small Tract Forestland” special

assessment involves two separate additional taxes.

Note: When the land is HBU forestland only the Small Tract Forestland additional taxes (20% to 100%)

under ORS 308A.707(3)(a)(A) is collectable.

As specied in ORS 308A.707(3); First, the “Small Tract Forestland additional Taxes” under ORS

308A.707(3)(a)(A) are calculated. Second, the “Forestland Additional Taxes” under ORS 308A.707(3)(a)

(B) are calculated.

The following information provides the calculation process for each of these additional taxes:

Special Assessment Forestland Additional Taxes under ORS 308A.707(3)(a)(A):

As specied in ORS 308A.707(3)(a)(A) the additional tax is calculated under ORS 308A.707(2) for each

year, beginning with the last year the land was under Small Tract Forestland special assessment, up to

a maximum of 10 years. This calculation is the difference between the taxes assessed against the land as

Small Tract Forestland and the taxes that would have been assessed at 100% of Forestland values.

(Insert here, under ORS 321.257 to 321.390, if the land is located in western Oregon or under ORS

321.805 to 855, if the land is located in eastern Oregon.)

Small Tract Forestland additional taxes under ORS 308A.707(3)(a)(B):

As specied in ORS 308A.707(3)(a)(B) the additional tax for each year, beginning with the last year the

land was under Small Tract Forestland special assessment, up to a maximum of 5 years, is calculated as

the difference between the taxes that would have been assessed against the land at 100% of Forestland

values (Insert here, under ORS 321.257 to 321.390, if the land is located in western Oregon or under

ORS 321.805 to 855, if the land is located in eastern Oregon.) and the taxes that would have otherwise

been assessed against the land had the land not received special assessment.

6-90 150-303-422 (Rev. 11-07-22)

“Small Tract Forestland Additional Tax” imposed under

ORS 308A.707(3)(a)(A) to be extended to the 20XX–20XX tax rolls for collection. $____________

(Note: The additional taxes will be collected upon disqualication of Small Tract Forestland and cannot

be deferred.)

“Forestland Additional Tax” imposed under ORS 308A.707(3)(a)(B) to be extended to the 20XX–XX

tax rolls for collection. $ ___________________

(Note: The additional taxes will be deferred under ORS 308A.706(1)(d) with a timely change in special

assessment.)

(Note: The additional taxes will be collected for a subdivision disqualication and cannot be deferred.)

Use appropriate note.

Following this disqualication any land that is no longer in a special assessment program will be

assessed based on market value as calculated under ORS 308.156.

Special assessment qualication

Provided that all acres (or any portion) can meet program qualication requirements, the special

assessment programs you may possibly qualify for are:

For subdivision disqualications delete all qualication options except for STF.

Exclusive Farm Use ORS 308A.062: Any land that is within an Exclusive Farm Use zone and that is

used exclusively for farm use. “Farm use” means the current employment of land for the primary

purpose of obtaining a prot in money. Farm use is dened under ORS 308A.056. A potential additional

tax for this program is a maximum of 10 years if the land is located outside of an Urban Growth

Boundary. Otherwise, the maximum is 5 years.

Non-exclusive Farm Use ORS 308A.068: Any land that is not within an exclusive farm use zone that

is being used for farming and produces a minimum gross income requirement. If additional taxes are

deferred under ORS 308A.706(1)(d) for a change in special assessment, the owner of a property shall

have ve years, beginning with the rst year application is made, to meet the non-EFU qualication

requirements as specied in ORS 308A.724(2). A potential additional tax is a maximum of 5 years.

Designated Forestland ORS 321.358: You must have at least two contiguous acres in one ownership

and meet minimum stocking and merchantable species requirements, or have an acceptable plan for

establishment of the minimum stocking and species requirements. If your land currently does not meet

minimum stocking or species requirements, you may submit an acceptable stocking plan along with a

completed application to the Assessor’s Ofce. A potential additional tax is a maximum of 5 years.

Small Tract Forestland ORS 321.709: Since your land has been disqualied from Small Tract Forestland,

it is not eligible for Small Tract Forestland special assessment for a period of ve years as required by

ORS 321.709(2)(d). After the ve year period has expired, you may submit an application for Small

Tract Forestland.