Tesoro Logistics Northwest Pipeline LLC I v. Dept. of Rev.

No. 18 	February 19, 2021 	439
IN THE OREGON TAX COURT
REGULAR DIVISION
TESORO LOGISTICS
NORTHWEST PIPELINE LLC,
Plaintiff,
v.
DEPARTMENT OF REVENUE,
Defendant.
(TC 5252 (Control); TC 5771;
TC 5292; TC 5313; TC 5350; TC 5395)
On cross-motions for summary judgment on whether the maximum assessed
value (MAV) of centrally assessed property could be redetermined when Plaintiff
purchased the property from another company, Plaintiff argued that the prop-
erty did not fall under Measure 50’s “new property or new improvements” excep-
tion under Article XI, section 11(1)(c)(A), of the Oregon Constitution and ORS
308.149(6)(a). Plaintiff further argued that even if the exception applied, ORS
308.162(1) required the Department of Revenue (department) to apply the MAV
as determined under the previous owner’s centrally assessed account. The court
readily concluded that the exception for “new property” within the meaning of
ORS 308.149(6) applied. DISH Network Corp. v. Dept. of Rev., 364 Or 254, 271,
434 P3d 379 (2019). However, the court concluded that the criteria to apply ORS
308.162(1) were satisfied, and that the property “attributable to” the previous
owner for the previous tax year was merely “changed to” Plaintiff’s account for
the tax year at issue. DISH Network, 364 Or at 284-85. Therefore, the court
granted Plaintiff’s motion and ordered the department to reduce the MAV of the
property to the MAV shown on the previous owner’s account.
Oral argument on cross-motions for summary judgment
was held remotely on December 10, 2020.
Cynthia M. Fraser, Foster Garvey PC, Portland, filed the
motion and argued the cause for Plaintiff.
Marilyn J. Harbur, Senior Assistant Attorney General,
Department of Justice, Salem, filed the cross-motion and
argued the cause for Defendant.
Decision rendered February 19, 2021.
ROBERT T. MANICKE, Judge.
I. 	INTRODUCTION
The parties ask the court to determine the max-
imum assessed value (MAV) of the taxable property in

440 	Tesoro Logistics Northwest Pipeline LLC I v. Dept. of Rev.
Oregon assessed to Plaintiff (taxpayer), a centrally assessed
taxpayer, for tax year 2014-15 (the “Property”). The real mar-
ket value (RMV) is not at issue; on November 20, 2015, the
court entered a Partial Stipulated Judgment determining
the RMV. After abeyance pending final resolution of cases
including DISH Network Corp. v. Dept. of Rev., 364 Or 254,
434 P3d 379 (2019), the parties now present cross-motions
for summary judgment in case TC 5252 and consolidated
cases involving later tax years.1
The Supreme Court’s opinion in DISH Network
explains important legal background relevant to this case,
providing (1) an overview of the “central assessment” of prop-
erty used in certain businesses, including the longstanding
concept of valuing the company’s worldwide property as a
“unit” and allocating a portion of that value to the property
in Oregon; (2) an overview of the more recent MAV limita-
tion on the growth of the assessed value of a “unit of prop-
erty” under Article XI, section 11, of the Oregon Constitution
(“Measure 50”) and implementing statutes; (3) a detailed
analysis of the “exception” that allows MAV to be redeter-
mined when “new property” is added to the assessable “unit
of property”; and (4) a discussion of ORS 308.162(1), 2 which
has the practical effect of preserving the MAV, notwith-
standing the “new property” exception, if property attribut-
able to one account is changed to another account. See DISH
Network, 364 Or at 257-62. The relevant constitutional pro-
visions and statutes have not changed materially between
the law in effect for the tax year 2009-10 at issue in DISH
Network and the law in effect for tax year 2014-15 and the
Later Years. 3 As in DISH Network, this case requires the
1 After issuing the Partial Stipulated Judgment, at the parties’ request, the
court placed case TC 5252 in abeyance. As other centrally assessed taxpayers’
cases involving MAV computation proceeded, taxpayer filed an appeal for each
new tax year (collectively, the “Later Years”): TC 5271 involves tax year 2015-16;
TC 5292 involves tax year 2016-17; TC 5313 involves tax year 2017-18; TC 5350
involves tax year 2018-19; TC 5395 involves tax year 2019-20. At the parties’
request, the court consolidated each of the Later Year cases with case TC 5252
and held all of the consolidated cases in abeyance.
2 Unless otherwise noted, the court’s references to the Oregon Revised
Statutes (ORS) are to the 2013 edition.
3 The Supreme Court referred to the 2007 edition of the ORS in DISH
Network. See 364 Or at 256 n 1. The definition of “new property or new improve-
ments” under ORS 308.149(5) that the court discussed in DISH Network was

Cite as 24 OTR 439 (2021) 	441
court to consider the “new property” exception and the pos-
sible effect of ORS 308.162(1).
II. 	FACTS
The record establishes the following facts. Taxpayer,
through other affiliates, is owned indirectly but entirely by
Tesoro Logistics LP, a publicly traded limited partnership
in the business of “gathering” crude oil, as well as “termi-
nalling,” transporting and storing crude oil and refined oil
products, including through pipelines. On June 19, 2013,
taxpayer and another affiliate wholly owned by Tesoro
Logistics LP bought the “Northwest Products System” from
Chevron Pipe Line Company and Northwest Terminalling
Company 	(collectively, 	“Chevron”) 	for 	a 	total 	purchase
price of $354.8 million before certain adjustments.4 The
Northwest Products System consists of (1) a federally regu-
lated petroleum products pipeline extending from Salt Lake
City, Utah, through southern Idaho and eastern Oregon to
Spokane, Washington, as well as (2) other assets including
a five-mile jet fuel pipeline connecting to the Salt Lake City
airport and certain products terminal rights, properties,
facilities, and equipment located in Idaho and Washington.
Before acquiring the Northwest Products System, tax-
payer had no property in Oregon subject to local or central
assessment.
recodified in the 2013 edition as ORS 308.149(6). The definition did not change
with the renumbering. Similarly, in DISH Network, the Supreme Court quoted
ORS 308.510(6), see 364 Or at 266-67, which was recodified (but not substantively
altered) in 2009 as ORS 308.510(5).
4 The other affiliate was Tesoro Logistics Operations LLC. Taxpayer
describes itself as a wholly owned subsidiary of Tesoro Logistics Operations LLC,
and Tesoro Logistics Operations LLC is shown as a 100 percent direct subsidiary
of Tesoro Logistics LP on an organizational chart submitted to the Securities
and Exchange Commission. Each party describes the June 19, 2013, transaction
as an acquisition by Tesoro Logistics LP. However, neither party bases any argu-
ment on the specifics of which of the three commonly owned entities acquired or
operated the Property, as among taxpayer, its parent Tesoro Logistics Operations
LLC, or that company’s parent Tesoro Logistics LP. The court finds this unsur-
prising, given the broad definition of a listed “company” as including “any group
of persons, whether organized or unorganized” and the department’s authority to
assess property to its “user,” regardless of ownership. See ORS 308.505(8) (defin-
ing “company”); ORS 308.517 (property assessed to “user”). Accordingly, for pur-
poses of this order, the court treats the June 19, 2013, transaction as an acquisi-
tion by taxpayer, ignoring any separate role by Tesoro Logistics Operations LLC
or Tesoro Logistics LP.

442 	Tesoro Logistics Northwest Pipeline LLC I v. Dept. of Rev.
For tax year 2013-14 and prior years, the department
maintained a centrally assessed property tax account for
Chevron that included the Oregon portion of the Northwest
Products System. The parties differ in their description of
what, exactly, was centrally assessed to Chevron and what is
now centrally assessed to taxpayer. Their differences stem,
in part, from fundamentally different understandings and
uses of terms involving the word “unit,” as will be discussed
below. 5 The uncontradicted evidence, however, indicates that
property constituting the Oregon portion of the Northwest
Products System was assessed to Chevron for tax year
2013-14, and taxpayer acquired and continued to hold that
property as of the January 1, 2014, assessment date for tax
year 2014-15. The dispute arises because the MAV that the
department has assigned to taxpayer’s account on the cen-
tral assessment roll and that the department asks the court
to uphold ($38,723,000) is substantially higher than the
MAV that the department previously assigned to Chevron’s
account on the central assessment roll ($10,786,200). After
initially using the MAV set for tax year 2013-14, an act that
the department now asserts was a mistake, the department
determined the MAV for tax year 2014-15 by following the
normal procedures for new centrally assessed property, with-
out regard to the 2013-14 MAV.6 Subject to any adjustments
as noted below, taxpayer asks the court to determine that
the MAV for tax year 2014-15 is the same as that assigned
to Chevron’s account for tax year 2013-14.
III. 	ISSUES
(1) 	Did taxpayer’s acquisition of the Northwest Products
System cause the exception under Article XI, sec-
tion 11(1)(c)(A), of the Oregon Constitution and ORS
308.149(6)(a) for “new property or new improvements”
5 The department also alleges that taxpayer may have made improvements
or gained synergies as a result of the transaction. The court addresses these
points below as well.
6 The department determined the 2014-15 MAV by first determining the
RMV of taxpayer’s property within and without Oregon, next allocating a portion
of that value to Oregon based on a formula, and finally multiplying the result by
the so-called “changed property ratio,” which was 1.0. At least for purposes of its
motion, taxpayer contests nothing about these specific steps; rather, taxpayer
contends that none of them were necessary because the department should have
applied the MAV from tax year 2013-14.

Cite as 24 OTR 439 (2021) 	443
to apply for purposes of determining the MAV for tax
year 2014-15?
(2) 	If so, does ORS 308.162(1) nevertheless require the
department 	to 	apply 	the 	MAV 	as 	determined 	for
Chevron’s centrally assessed account for tax year 2013-
14, to the property attributable to taxpayer’s account
for tax year 2014-15, subject to any new property or new
improvements that might have been made on or after
January 1, 2013, and before January 1, 2014?
IV. 	LEGAL BACKGROUND
A. 	DISH Network
In DISH Network, the court analyzed the taxpay-
er’s and the department’s competing arguments regarding
the meaning of “new property or new improvements,” which
means “changes in the value of property as the result of * * *
[t]he addition of machinery, fixtures, furnishings, equipment
or other taxable real or personal property to the property
tax account.” See 364 Or 254; ORS 308.149(6)(a)(C). DISH
Network involved items that the taxpayer had owned in
prior tax years (set-top boxes and other items that enabled
the taxpayer’s customers to receive its transmissions of tele-
vision programming), and that had been locally assessed for
those years. See 364 Or at 262-63. When the department, in
light of the Supreme Court’s decision in another case,7 deter-
mined that the taxpayer in DISH Network was subject to
central assessment, the taxpayer argued that the MAV pre-
viously assigned to each item by a county assessor continued
to apply for the year for which the taxpayer was first cen-
trally assessed. Id. at 263-64. The taxpayer argued, based
on this court’s decision in Comcast Corp. III v. Dept. of Rev.,
22 OTR 233 (2016), that “new property” is limited to prop-
erty newly created or acquired by the taxpayer within a cer-
tain time before the assessment date, and does not include
property that an assessor adds to the roll by the “unilateral”
action of subjecting the taxpayer to central assessment for
the first time. DISH Network, 364 Or at 268. The Supreme
Court rejected this argument, concluding:
7 DIRECTV, Inc. v. Dept. of Rev., 360 Or 21, 377 P3d 568 (2016).

444 	Tesoro Logistics Northwest Pipeline LLC I v. Dept. of Rev.
“[F]or purposes of ORS chapter 308, ‘new property or new
improvements’ is not limited to property that has been cre-
ated or acquired by the taxpayer within some designated
time period, but includes all property that is lawfully
added by the assessor to a taxpayer’s property tax account
on an assessment roll. Property that has not previously
been assessed under a different account is ‘new property,’
but it must be valued as though the change in accounts
had not occurred. * * * [T]hat meaning accounts for ORS
308.162(1), which precludes [r]evaluation of property that is
moved from one property tax account to another.” 8
Id. at 285.
In reaching this conclusion, the court clarified that
a property tax “account,” for purposes of the definition of
“new property or new improvements” in ORS 308.149(6),
refers not only to the administrative division used for
listing property in the local assessment rolls. Rather, for
centrally assessed property, “account” refers to the single
account that the department generally establishes for each
company maintaining a business listed in ORS 308.515(1).
Id. at 270. Therefore, “new property” “includes additions to
the accounts of companies on the central assessment roll.”
Id. at 271; see also, e.g., id. at 277 (“new” means “new to a
property tax account on an assessment roll”).
The court next rejected the taxpayer’s argument
that the items at issue must retain their MAV because they
previously had been assessed under a different property tax
account. The court explained that ORS 308.555 allows the
department to value as a unit the entire property, within and
without Oregon—including not only real property and tan-
gible personal property, but also intangible property—that
a company uses in performing a listed business. Id. at 292.
After determining the value of that potentially worldwide
unit, the department may allocate a portion of that value
to the property in Oregon based on a formula prescribed by
statute or by another reasonable method, pursuant to ORS
308.550(1) or (2). Id. at 292-93. The court concluded that
8 Cf. DISH Network, 364 Or at 284 (“ORS 308.162(1) does not define ‘new
property’; instead it precludes revaluation of property that previously has been
assessed under a different property tax account.” (Emphasis added.)).

Cite as 24 OTR 439 (2021) 	445
“the property [the department] added to DISH’s newly-
created account in the 2009-10 central assessment roll was
not the same, in whole or in part, as the tangible real and
personal property that previously had appeared in DISH’s
property tax accounts in the various local assessment rolls.
In fact, the unit of property (or proportion thereof) that was
added to the central assessment roll had never previously
been assessed in any manner.”
Id. at 293 (emphasis in original). For that reason, the excep-
tion for “new property” under ORS 308.149(6) applied, ORS
308.162(1) did not apply, and a new MAV was required to be
determined for all property added to the new central assess-
ment account for the taxpayer. Id.
B. 	Worldwide Valuation “Unit” Under ORS 308.555 vs.
Oregon-assessable “Unit of Property”
In interpreting the central assessment laws as con-
strued in DISH Network, the parties refer to two concepts
that include the notion of a “unit.” The court now distin-
guishes those concepts before proceeding with the analysis.
First, the concept of “unit valuation” of property within and
without Oregon is specifically endorsed for businesses listed
for central assessment. See ORS 308.555; DISH Network,
364 Or at 256 (describing process under ORS 308.555 as
“unit valuation”); Southern Pacific Trans. Co. v. Dept. of
Rev., 295 Or 47, 56, 664 P2d 401 (1983) (same). This court
sometimes refers to the potentially worldwide grouping of
real property and tangible and intangible personal property
used in the business as the “valuation unit,” because its sole
function is to establish an overall value, a portion of which
the department then allocates to the Oregon-situs property
under ORS 308.550.
Second, the term “unit of property,” as used in
Measure 50, may apply to centrally or locally assessed prop-
erty, but in either case it refers only to property in Oregon,
which the state or its localities have jurisdiction to assess
and tax under the United States Constitution. See Or Const
Art XI, § 11(1)(a) (“each unit of property in this state shall
have a maximum assessed value” (emphasis added)); ORS
308.510(5) (“For purposes of determining the maximum
assessed value of property under section 11, Article XI of the

446 	Tesoro Logistics Northwest Pipeline LLC I v. Dept. of Rev.
Oregon Constitution, ‘property’ means all property assessed
to each company that is subject to assessment under ORS
308.505 to 308.665.” (Emphasis added.)); ORS 308.142(1)(b)
(“property” means “total statewide value of all property
assessed to” a company maintaining a listed business (empha-
ses added)); see also Cleveland, C., C. & St. L. Ry. Co. v.
Backus, 154 US 439, 446, 14 S Ct 1122, 38 L Ed 1041 (1894)
(state may “exercise the power of equal taxation upon all pri-
vate property within its territorial limits” but may determine
value of in-state property as share of value of interstate unit
(emphasis added)). In drafting Measure 50 and its implement-
ing statutes, the legislature chose to identify the “unit of prop-
erty” with a property tax account. See Flavorland Foods v.
Washington County Assessor, 334 Or 562, 54 P3d 582 (2002)
(voters adopting Measure 50 intended “each unit of property
in this state” to refer to all property in a property tax account;
rejecting taxpayer’s argument that separate MAV might
exist for land vs. improvements within a single account). 9 As
summarized above, the Supreme Court concluded in DISH
Network that the account for centrally assessed property, for
Measure 50 purposes, is the account the department estab-
lishes for each company. See 364 Or at 270. This account con-
tains “all property assessed to” the company (emphasis added);
that property is a “unit of property” with its own MAV.
The court summarizes the relationship between
the two terms that use the word “unit” in the context of
central assessment and Measure 50 as follows. The MAV
of a new “unit of property” in Oregon is determined by
first valuing the larger, worldwide “valuation unit” under
ORS 308.555 and then allocating a portion of that value
to the Oregon unit of property under ORS 308.550. This
exercise produces the “total statewide value” of the unit of
property—its RMV—under ORS 308.142(1)(b). Because the
9 The Supreme Court later cautioned that the appropriate unit to consider
in applying the income approach when valuing locally assessed property is not
necessarily confined to a single account that an assessor establishes for a partic-
ular parcel. See Dept. of Rev. v. River’s Edge Investments, LLC, 359 Or 822, 842,
377 P3d 540 (2016); see also OAR 150-308.205-(A) (2015), renumbered as OAR
150-308-0240 (department’s longstanding rule, under legislatively delegated
authority, defining “unit of property” without reference to accounts as “the item,
structure, plant, or integrated complex as it physically exists on the assessment
date”).

Cite as 24 OTR 439 (2021) 	447
unit of property is “new,” its MAV is set under the provi-
sions governing new property or new improvements in ORS
308.153. Under ORS 308.153(2)(a), that RMV is reduced by
the RMV of any “retirements.” Under ORS 308.153(1)(b), the
remaining net RMV is multiplied by the changed property
ratio, which results in the MAV of the unit of property. The
MAV of any unit of property, whether centrally or locally
assessed, “shall not increase by more than three percent
from the previous year,” unless one of six exceptions applies.
Or Const, Art XI, § 11(1); see DISH Network, 364 Or at 259.
V. 	ANALYSIS
A. 	Does the exception for “new property or new improve-
ments” apply in this case?
Turning to the first issue in this case, it is clear
that the department properly established an account for tax-
payer, and therefore a new unit of property, on the central
assessment roll for tax year 2014-15. Taxpayer is engaged in
a business listed for central assessment in ORS 308.515(1)(L)
(the “Pipeline” business), and by the assessment date of
January 1, 2014, taxpayer unquestionably was performing
that business in Oregon. It also is clear that the department
was entitled to add the Property to taxpayer’s account, as
taxpayer owned the Property for use in its business. See
ORS 308.517(1) (department “shall” assess to the “user” all
property “owned, leased, rented, chartered or otherwise held
for or used by it” in performing a listed business). Under
DISH Network, therefore, this court readily concludes that
the exception for “new property” within the meaning of ORS
308.149(6) must apply. See DISH Network, 364 Or at 271
(“new property” for purposes of ORS 308.149 “includes addi-
tions to the accounts of businesses on the central assess-
ment roll”).
B. 	Does ORS 308.162(1) preclude redetermination of the
MAV for the Property?
Taxpayer argues that, even if the Property otherwise
is within the definition of “new property,” ORS 308.162(1)
prohibits the department from assigning a MAV to the
Property that exceeds the MAV in the hands of Chevron for
tax year 2013-14. ORS 308.162 provides in full:

448 	Tesoro Logistics Northwest Pipeline LLC I v. Dept. of Rev.
“308.162 Property tax account modifications.
“(1) 	If two or more property tax accounts are merged
into a single account, or if property that is attributable to
one account is changed to another account, the maximum
assessed value of the property may be adjusted to reflect
the merger or change, but the total maximum assessed
value for all affected accounts may not exceed the total
maximum assessed value the accounts would have had
under ORS 308.146 or 308.149 to 308.166 if the merger or
change had not occurred.
“(2) 	If a single property tax account is divided into two
or more accounts, the maximum assessed value of all prop-
erty affected by the division may not exceed the total max-
imum assessed value of the affected property determined
under ORS 308.146 or 308.149 to 308.166.”
(Emphasis added.)
The Supreme Court in DISH Network discussed
ORS 308.162(1) in some depth, as the taxpayer in that case
cited the merger of property tax accounts or the change of
property from one account to another as an example of an
action that could be undertaken only by an assessor. 364 Or
at 284. If, the taxpayer argued, such a “unilateral” action
by an assessor precludes redetermination of the MAV even
though the property otherwise is “new,” then “unilateral”
action by the taxpayer is a necessary condition for rede-
termination of the MAV. The Supreme Court rejected the
taxpayer’s premise, noting that property could be “changed”
from one account to another by the taxpayer’s action of pur-
chasing or otherwise acquiring property that previously had
appeared in a different property tax account. Id. The court
stated:
“That property would be new in the sense that the taxpayer
had not previously owned it, but it would be valued as if the
change in ownership and transfer had not occurred.”
Id. The court went on to describe the relationship between
ORS 308.162(1) and the “exception” in ORS 308.153 that
requires the MAV to be redetermined for “new property or
new improvements”:
“ORS 308.162(1) does not define ‘new property’; instead,
it precludes revaluation of property that previously has

Cite as 24 OTR 439 (2021) 	449
been assessed under a different property tax account. That
aspect of the statute is in no way inconsistent with the
meaning of ‘new property or new improvement’ for which
the department contends. Still, even if property is ‘new’
within that meaning, i.e., property added to a tax account
by an assessor, it can only be revalued as provided in ORS
308.153 if it has not previously been assessed under a dif-
ferent property tax account.”
Id. at 284-85. In a footnote, the court commented:
“Thus, while the existence of ORS 308.162(1) does not
alter the meaning of ‘new property’ in any formal sense, it has
a clear practical effect on what can qualify as ‘new property.’ ”
Id. at 285 n 32. Under DISH Network, even if property moved
from one account to another is “new property,” in practical
terms, the property’s MAV from the former account limits
the amount that can be set as MAV after the property has
been moved to the new account.
In this case, the court finds that property con-
sisting of a large assemblage of pipeline assets located in
Oregon was recorded under Chevron’s account on the cen-
tral assessment roll for tax year 2013-14 as a unit of prop-
erty, and that all of that same property was recorded under
taxpayer’s account on the central assessment roll for tax
year 2014-15. The court concludes that the criteria to apply
ORS 308.162(1) are satisfied, and that the property that was
“attributable to” Chevron for tax year 2013-14 was “changed
to” taxpayer’s account for tax year 2014-15.
The department raises two main arguments, one
legal and one factual. As its legal argument, the department
asserts:
“The property assessed to Chevron was assessed as a unit,
under ORS 308.555, not particular assets. The property
assessed to Tesoro is assessed as a unit, and not particular
assets. These units are not identical. Thus it is not correct
to say that the unit of property assessed to Tesoro was pre-
viously assessed to Chevron.”
This argument conflates the concepts of a valuation unit and
a unit of property. It is not accurate to assert that any prop-
erty was “assessed as a unit, under ORS 308.555.” Rather,
the worldwide property held by each company was “valued”

450 	Tesoro Logistics Northwest Pipeline LLC I v. Dept. of Rev.
as a unit under ORS 308.555, and the portion of that value
that was allocated to the Oregon-situs “unit of property”
became the RMV of that unit of property.10 Only the Oregon
unit of property was ever “assessed.” The possibility that
each company’s valuation unit might be different does not
necessarily affect the MAV, as the court now discusses.
The department proffers two factual differences
that may exist between the property Chevron held as
of January 1, 2013, and the property taxpayer held as of
January 1, 2014. First, the department alleges a “possibility
that [taxpayer] made improvements to the previous unit [of]
property,” and second, taxpayer may have achieved “opera-
tional synergies * * * through the acquisition” or may have
“its own intellectual property, goodwill, etc., which Chevron
could not have previously owned.” The court addresses each
of these assertions.
As to improvements, the department refers to possi-
ble “control center improvements.” Assuming these improve-
ments involve property in Oregon, the department offers
no explanation why any such improvements are not them-
selves “new property or new improvements” to the unit of
property within the meaning of ORS 308.149. As such, the
MAV attributable to those improvements would be deter-
mined under ORS 308.153(1)(b) and added to the MAV of the
unit of property taxpayer acquired from Chevron. See ORS
308.153(1) (if new improvements are made as of the January 1
assessment date, MAV is “the sum of” the existing MAV and
the RMV of the new improvements (less retirements) times
the changed property ratio).11 Likewise, any new intellectual
property or other new intangible property of taxpayer that
might have had a situs in Oregon on January 1, 2014, would
be “new property,” the MAV of which would be determined
10 The department makes a similar error when it states that “the allocated
portion of the unit property value * * * is the property ‘sitused’ in Oregon” (empha-
sis added). Instead, the allocated portion of the unit value is assigned to, and
becomes the RMV of, the property sitused in Oregon.
11 The court does not understand the department to argue that ORS 308.162(1)
does not apply to the unit of property previously assessed to Chevron simply
because taxpayer may have both bought it and made some improvements to it
during the same calendar year. Such a reading would severely limit the scope of
ORS 308.162 for both centrally and locally assessed property that is subject to an
account merger or division or change.

Cite as 24 OTR 439 (2021) 	451
and added to the MAV of the existing unit using the same
method.
As to any “operational synergies” arising from the
acquisition, it is not clear to the court whether the depart-
ment refers to additional items of new intangible property,
or instead to an increase in the value of the unit of prop-
erty stemming from taxpayer’s ability to use it together
with taxpayer’s presumably unique assemblage of other
property in other states. If the former, the same adjustment
for “new property” would be required as discussed above. If
the latter, the department again conflates the unit of prop-
erty with the valuation unit. Any time property changes
ownership, new indicators of value may come to light. The
buyer may bet that it can use the property more produc-
tively; if successful, the purchase reveals value that previ-
ously may not have been apparent.12 That is why a recent
purchase is considered one of the most reliable indicators
of value, compared to estimates based on projected income
generation and other approaches. See, e.g., Ernst Bros. Corp.
v. Dept. of Rev., 320 Or 294, 300, 882 P2d 591 (1994). The
presence or absence of this sort of “synergy” is highly rel-
evant when determining the RMV of the valuation unit of
centrally assessed property under ORS 308.555. However,
neither Measure 50 nor its implementing statutes pur-
port to allow redetermination of MAV due to a change of
ownership.13 The court sees no basis to depart from the
12 The department acknowledges that it may have undervalued Chevron’s
Oregon property because it lacked “the benefit of a market sales price in deter-
mining previous values.”
13 By contrast, the so-called “Welcome, Stranger!” feature of California’s
1978 “Proposition 13” expressly requires the otherwise capped “base” value of
property to be redetermined upon a “change of ownership,” a feature that has
generated extensive rulemaking and litigation regarding exactly what events
constitute a change of ownership. See Pacific Southwest Realty Co. v. County of
Los Angeles, 1 Cal 4th 155, 160-62, 820 P2d 1046 (1991) (discussing Proposition
13, the “change in ownership” provision, and legislative attempts to clarify the
provision). The Oregon Supreme Court discussed this feature of California law
in an opinion released some four years before the legislature drafted Measure 50
and the implementing statutes. See Savage v. Munn, 317 Or 283, 285, 856 P2d
298 (1993) (taxpayer’s “complaint was that California had denied her—a new
owner—the benefits of the same assessment value that her neighbors—older
owners—enjoyed”). The court considers the legislature and the people to have
been aware of the possibility of a change-of-ownership rule, and to have chosen by
their silence not to have adopted one. Cf. Flavorland Foods, 334 Or at 572-73 (vot-
ers adopting Measure 50 in May 1997 “were on notice” of court’s interpretation of

452 	Tesoro Logistics Northwest Pipeline LLC I v. Dept. of Rev.
requirement to preserve the existing MAV of the unit of
property under ORS 308.162(1).
Finally, the department asserts, without citation to
authority or reference to the factual record:
“Centrally assessed companies frequently purchase
either assets or entire subsidiaries (or entire companies)
from each other. These acquisitions are routinely consid-
ered as part of the new property ‘change in value’ from year
to year. The MAV of an individual asset is not separately
tracked when it becomes the property of another centrally
assessed company because the statutes do not require or
authorize that either for determining RMV or calculating
MAV. Rather, the statutes require that the newly acquired
asset will be part of the statewide value of the property of
the acquiring company, i.e., part of a new unit of property
for that acquiring company.”
This case does not involve “tracking” of “individual assets.”
It involves the moving of an entire “unit of property” from
one centrally assessed taxpayer to another. The court holds
only that, when a “unit of property” is “changed to another
account,” the limitation on MAV applies pursuant to ORS
308.162(1). The court observes that individual assets consti-
tuting less than the “unit of property” do not have a MAV,
and neither Measure 50 nor its implementing statutes pro-
vide a mechanism for allocating MAV among individual
assets; therefore, the court sees no basis to invoke the lim-
itation in ORS 308.162(1) if only individual assets are trans-
ferred. See ORS 308.162(1) (referring to MAV “of the prop-
erty”); cf. Flavorland Foods, 334 Or at 578 (“unit of property”
refers to “all the property in a property tax account”).
VI. 	CONCLUSION
Because the evidence demonstrates that taxpayer
acquired the unit of property previously assessed to the
account of Chevron, the court applies ORS 308.162(1) and
grants taxpayer’s motion for case TC 5252 and tax year
2014-15, subject to the requirement to confer with the
department’s counsel to (1) adjust—if required—the MAV
for tax year 2014-15 to account for any “control center
“property” because of Oregon Supreme Court’s April 1997 discussion of that term
in Schatzer v. Dept. of Rev., 325 Or 211, 219, 934 P2d 1119 (1997)).

Cite as 24 OTR 439 (2021) 	453
improvements” in Oregon or other Oregon-situs new prop-
erty or new improvements on or after January 1, 2013, and
before January 1, 2014; and (2) seek agreement on the MAV
for each of the Later Years. Now, therefore,
IT IS ORDERED that:
Plaintiff’s 	Motion 	for 	Summary 	Judgment 	is
granted. Subject to any adjustments that may be required
for new property or new improvements, the MAV of the
Property in Plaintiff’s account is $10,786,200; and
IT 	IS 	FURTHER 	ORDERED 	that 	Defendant’s
Cross-Motion for Summary Judgment is denied.