Delta Air Lines, Inc. v. Dept. of Rev.

ORDER ON CROSS-MOTIONS FOR PARTIAL
SUMMARY JUDGMENT TC 5409 (CONTROL) 	Page 1 of 57
IN THE OREGON TAX COURT
REGULAR DIVISION
Property Tax
DELTA AIR LINES, INC.,
Plaintiff,
v.
DEPARTMENT OF REVENUE,
State of Oregon,
Defendant.
)
)
)
)
)
)
)
)
)
TC 5409 (Control); TC 5418; TC 5433;
TC 5452
ORDER ON CROSS-MOTIONS FOR
PARTIAL SUMMARY JUDGMENT
I. 	INTRODUCTION
Plaintiff, Delta Air Lines, Inc. (Delta), is an interstate and international air carrier doing
business in Oregon. (Stip Facts at 1.) As an “[a]ir transportation” company, its property is
subject to central assessment, with consequences discussed below. See ORS 308.515(1)(e).1
Delta appeals from the Opinion and Order (O&O) issued by Defendant (the Department) for
property tax year 2019-20,2 which determined a real market value of (1) $50 billion for Delta’s
worldwide property valued as a unit, or “system,”3 and (2) an allocated real market value of
$212,560,000 for Delta’s property sitused in Oregon. (Stip Facts at 2; 10/31/2019, Delta Compl
1 Unless otherwise specified, the court’s references to the Oregon Revised Statutes (ORS) are to the 2017
edition.
2 Appeals for the following tax years have been consolidated with this case for pretrial purposes: 2020-21
(TC 5418), 2021-22 (TC 5433), 2022-23 (TC 5452). Delta also appealed tax year 2023-24 (TC 5460), which has
not been consolidated. Except to the extent discussed below, the relevant law was the same for all of the foregoing
tax years.
3 As is customary, the court refers to the property comprising this valuation unit as a “system.” See, e.g.,
Alaska Airlines, Inc. v. Dept. of Rev., 307 Or 406, 410, 769 P2d 193 (1989) (describing formulary allocation of
taxpayer’s “total system value”); see Or Laws 1909, ch 218, § 4.15 (referring to companies “doing business as one
system, partly within this State and partly without, or so doing business in more than one county of the State.”).

ORDER ON CROSS-MOTIONS FOR PARTIAL
SUMMARY JUDGMENT TC 5409 (CONTROL) 	Page 2 of 57
at 4 (O&O).) Each of these values includes some amount attributable to intangible property,
such that the value would be less if intangible property were excluded. (See Stip Facts at 2.)
Delta’s complaint asserts two claims:
1. 	That assessment for taxation of Delta’s intangible property violates the Uniformity
Clauses of the Oregon Constitution (Or Const, Art I, § 32; Art IX, § 1) and the Equal
Protection Clause of the Fourteenth Amendment of the United States Constitution
(US Const, Am XIV).
2. 	That the Department’s allocation of Delta’s unit value to Oregon:
a. 	Does not fairly reflect the real market value of Delta’s property that has a situs
in Oregon and
b. 	Results in the taxation of Delta’s property located outside Oregon.
(See 10/31/2019, Delta’s Compl at 2.) Delta’s first claim is now before the court on Delta’s and
the Department’s cross-motions for partial summary judgment.
II. PROCEDURAL BACKGROUND
After an initial set of briefs on the parties’ cross-motions in this case, the court held a first
hearing on April 28, 2021, at which it heard oral argument and directed the parties to address
certain issues in supplemental briefing. (See 5/5/2021, Ct Ltr.) While the cross-motions were
under advisement, another centrally assessed taxpayer pursuing its own valuation appeal,
PacifiCorp, moved for leave to amend its complaint to add a claim similar to Delta’s regarding
the validity of taxation of its intangible property for tax year 2020-21. 4 (See 10/1/2021,
PacifiCorp Motion to Amend Complaint, PacifiCorp v. Dept. of Rev., No. 5411.) On November
8, 2021, the court issued an order in PacifiCorp allowing the amendment but staying proceedings
on PacifiCorp’s new, constitutional claim until after the trial set for later that month. (See
11/8/2021, Order Granting Plaintiff’s Motion for Leave to Amend Complaint, PacifiCorp, No.
4 PacifiCorp’s claim differs from Delta’s only in that PacifiCorp asserts its claim solely under the Oregon
Uniformity Clauses.

ORDER ON CROSS-MOTIONS FOR PARTIAL
SUMMARY JUDGMENT TC 5409 (CONTROL) 	Page 3 of 57
5411.) Also on November 8, 2021, the court issued a letter in Delta, with copies to the parties in
PacifiCorp, that requested additional briefing on certain tentative conclusions of the court, as
well as four further questions related to Delta’s claims. The letter invited the parties in both
cases to consider a joint hearing for oral argument on the tentative conclusions and questions,
and the parties in both cases agreed. (See 11/8/2021, Ct Ltr.) Shortly after the PacifiCorp trial,
on January 18, 2022, the court held a single hearing at which the court heard oral argument from
the parties in both cases. The court directed the parties to file a final set of briefs, which the
parties completed on May 18, 2022. (See 1/19/2022, 1/25/2022, 1/27/2022, Emails with Counsel
in Delta and PacifiCorp). Delta and PacifiCorp responded separately from each other, but
neither Delta nor PacifiCorp has expressed substantive disagreement with the other’s
arguments.5
PacifiCorp’s March 2, 2022 brief concludes as follows: “PacifiCorp joins Delta in its
request that the court grant summary judgment finding that ORS 307.030(2) is unconstitutional
* * *.” (3/2/2022, PacifiCorp Br at 32.) Accordingly, the court treats PacifiCorp as having
moved for partial summary judgment as to the second, constitutional claim in its October 25,
2021, First Amended Complaint, and the court treats the Department as having cross-moved for
partial summary judgment as to that same claim of PacifiCorp. The court today issues a separate
order, incorporating this order, on the cross-motions regarding PacifiCorp’s constitutional
claim.6
For convenience, the remainder of this order uses the term “Taxpayer” to mean both
Delta and PacifiCorp.
5 The Department responded separately to each brief.
6 The court issued its opinion in the valuation trial in PacifiCorp’s case on May 24, 2023; following
reconsideration, the court issued an amended opinion on July 17, 2023.

ORDER ON CROSS-MOTIONS FOR PARTIAL
SUMMARY JUDGMENT TC 5409 (CONTROL) 	Page 4 of 57
III. 	ISSUE
Are Oregon’s Uniformity Clauses or the federal Equal Protection Clause violated by
Oregon’s taxation of intangible personal property only when used or held for future use in a
business listed in ORS 308.515(1)? 7
IV. LEGAL BACKGROUND
A. 	Oregon Uniformity Clauses and Federal Equal Protection Clause
As is true for nearly every state, the Constitution of Oregon imposes requirements of
uniformity of taxation. See Jerome R. Hellerstein & Walter Hellerstein, 1 State Taxation ¶
INTRO PT II (3d ed 2023) (“[A]lmost every state constitution contains an explicit constitutional
requirement of uniformity and equality in taxation * * *.”). Oregon has two Uniformity Clauses.
Article I, section 32, provides in relevant part: “[A]ll taxation shall be uniform on the same class
of subjects within the territorial limits of the authority levying the tax.” Article IX, section 1,
provides in relevant part: “The Legislative Assembly shall * * * provide by law uniform rules of
assessment and taxation. All taxes shall be levied and collected under general laws operating
uniformly throughout the State.” The Oregon Supreme Court has declared that “[t]he two
sections are to be read together.” State ex rel. v. Malheur County Court, 185 Or 392, 410-11,
203 P2d 305 (1949).
The current text of both Uniformity Clauses reflects amendments in 1917, which the
Oregon Supreme Court has discussed. See Mathias v. Dept. of Rev., 312 Or 50, 57-60, 817 P2d
7 Neither Delta nor PacifiCorp refers specifically to Oregon’s equal protection clause. See Or Const, Art I,
§ 20. However, the Oregon Supreme Court has applied the same analysis to the equal protection clauses of Article I,
section 20 of the Oregon Constitution and the Fourteenth Amendment to the United States Constitution. Knapp v.
City of Jacksonville, 342 Or 268, 276, 151 P3d 143 (2007) (“Article I, sections 20 and 32, of the Oregon
Constitution and the Equal Protection Clause of the United States Constitution, require plaintiffs to establish that the
city had no rational basis for creating the class of persons subject to the charges.”) (citing Crocker and Crocker, 332
Or 42, 55, 22 P3d 759 (2001) (“We think that the constitutional analysis that we have advanced under Article I,
section 20, of the Oregon Constitution, applies equally under the federal standard[.]”)).

ORDER ON CROSS-MOTIONS FOR PARTIAL
SUMMARY JUDGMENT TC 5409 (CONTROL) 	Page 5 of 57
272 (1991), aff’g 11 OTR 347 (1990); Jarvill v. City of Eugene, 289 Or 157, 170-84, 613 P2d 1
(1980). By requiring that taxation be “uniform on the same class of subjects,” rather than “equal
and uniform,” the framers of the amendments “confirmed that property could be broken up into
rational classes and treated differently class by class.” Mathias, 312 Or at 58.
The requirement of a “rational class” under the Uniformity Clauses overlaps substantially
with the requirement under the federal Equal Protection Clause that a legislative classification
have a “‘rational relation to some legitimate end.’” See US Const, Am XIV, § 1 (“[N]or [shall
any State] deny to any person within its jurisdiction the equal protection of the laws.”); Crocker
and Crocker, 332 Or 42, 55, 22 P3d 759 (2001) (quoting Romer v. Evans, 517 US 620, 631, 116
S Ct 1620, 134 L Ed 2d 855 (1996)); Jarvill, 289 Or at 184 (denying claim under Article I,
section 32 and Equal Protection Clause “[f]or the same reasons”). As the Oregon Supreme Court
most recently summarized, a claim that a tax
“violated the provisions of Article I, sections 20 and 32, of the Oregon
Constitution and the Equal Protection Clause of the United States Constitution,
require[s the taxpayer] to establish that the [legislative body] had no rational basis
for creating the class of persons subject to the charges. See Crocker and Crocker,
332 Or 42, 55, 22 P3d 759 (2001) (stating standard with respect to equal
privileges and immunities and equal protection analysis); Jarvill v.City of Eugene,
289 Or 157, 613 P2d 1 (1980) (stating standard). A classification is rationally
based ‘if it rests upon genuine differences’ and those differences bear a
‘reasonable relationship to the legislative purpose.’ Jarvill, 289 Or at 180, 613
P2d 1; Huckaba v. Johnson, 281 Or 23, 26, 573 P2d 305 (1978).”
Knapp, 342 Or at 276 (upholding city water and sewer bill surcharges solely on developed
property, because city “‘could have correctly concluded that safety needs increase when property
is developed’”) (quoting 18 OTR 22, 38 (2004) (Knapp I)). The task of this court, therefore, is to
determine whether the legislature based the classification in this case on genuine differences that
bear a reasonable relationship to a legislative purpose. Under this standard, the legislature need
not have articulated its legislative purpose; it suffices if the court can conceive of “‘some

ORDER ON CROSS-MOTIONS FOR PARTIAL
SUMMARY JUDGMENT TC 5409 (CONTROL) 	Page 6 of 57
legitimate end.’” Crocker, 332 Or at 55 (quoting Romer, 517 US at 631). The court will discuss
this standard in greater detail below, before evaluating the parties’ arguments regarding
classification.
Although the Oregon Uniformity Clauses and the federal Equal Protection Clause have
been held to share the same standard, Oregon’s “first-things-first” doctrine requires the court to
analyze Taxpayer’s Uniformity Clause claims first. See Hughes v. State of Oregon, 314 Or 1,
12, 838 P2d 1018 (1992). Doing so also safeguards against the possibility that developments in
the federal standard, or its application, might confuse the court’s interpretation of the Oregon
Clauses. See Tharalson v. State Dept. of Rev., 281 Or 9, 15 n 10, 573 P2d 298 (1978) (“Even
when the verbal ‘tests’ are similar, however, a state’s application of its own constitution is
independent of federal review and of changing applications of the fourteenth amendment, as
have occurred since Standard Lumber Co. v. Pierce, [112 Or 314, 228 P 812 (1924)].”).
Accordingly, this court will first apply precedent under Oregon’s Uniformity Clauses,
before turning to the larger body of Equal Protection case law for any different or supplemental
points.
B. 	Central Assessment and Treatment of Intangible Property
The Oregon Supreme Court has charted the origins and nature of the “central assessment”
of property used in certain businesses. See Northwest Natural Gas Co. v. Dept. of Rev., 347 Or
536, 538-39, 226 P3d 28 (2010); Comcast Corp. v. Dept. of Rev., 356 Or 282, 289-93, 337 P3d
728 (2014); DISH Network Corp. v. Dept. of Rev., 364 Or 254, 257-83, 434 P3d 379 (2019); see
also Level 3 Communications LLC III v. Dept. of Rev., 23 OTR 440, 458-78 (2019), aff’d 368 Or
303, 490 P3d 149 (2021). In 1909 the legislature adopted the four basic elements of the statutory
scheme, which remained in effect for the years at issue here:

ORDER ON CROSS-MOTIONS FOR PARTIAL
SUMMARY JUDGMENT TC 5409 (CONTROL) 	Page 7 of 57
(1) “Unit valuation” of the system of property, within and without Oregon, used in a
listed business. See ORS 308.555 (“[The Department] may value the entire
property, both within and without the State of Oregon, as a unit.”).
(2) The inclusion of intangible property in the definition of property to be valued.
See ORS 308.505(14) (defining “Property” as including “all property of any kind,
* * * tangible or intangible”).8
(3) The use of formulas to allocate a portion of the system value to the “property that
has a situs in this state,” and to further apportion that value to localities within
Oregon. See ORS 308.550 (describing allocation to state); ORS 308.565
(describing apportionment to counties).
(4) “Centralizing” the task of valuing the property used in the listed businesses in one
statewide agency while retaining “local assessment” by county assessors for all
other property. See ORS 308.210(1) (instructing county assessor to assess value
of all taxable property in county); ORS 308.515 (instructing the Department to
assess property used in listed businesses).
The legislature has always identified businesses for central assessment of property by
means of a list. Except for uncodified findings adopted by the 2009 legislature as discussed
below, the legislature has never stated an express test for selecting businesses for central
assessment.9 The list has changed over the years. The table below shows the businesses on the
original 1909 list and those on the list in effect for the tax years at issue in this case.
1909 Central Assessment List 	Central Assessment List in ORS 308.515(1)
Railroad Companies 	Railroad Transportation
Sleeping Car Companies 	Railroad Switching and Terminal
Union Station and Depot Companies 	Electric Rail Transportation
Electric and Street Railway Companies 	Air Transportation
8 The 1909 definition expressly included “franchises and special franchises”; the 1913 legislature added
“tangible and intangible.” Or Laws 1909, ch 218, §1; Or Laws 1913 ch 193, § 5.
9 The legislature’s use of a list in ORS 308.515(1) contrasts with the more typical approach of stating a
definition based on express criteria. An example of the latter is the three-factor definition of a “unitary business” for
purposes of taxing the income of a multistate enterprise. See ORS 317.705(3). Derived from the same case law that
approved unit valuation for property tax purposes, the unitary business principle allows a state to determine taxable
income as an apportioned share of the entire net income if the business is characterized by “centralized
management,” “economies of scale,” and “functional integration.” See generally Hellerstein & Hellerstein, 1 State
Taxation at ¶ 8.05 (“The unit rule is the progenitor of the contemporary ‘unitary business principle’ that underlies
the use of formulary apportionment [for state income tax purposes].”) (citing State Railroad Tax Cases, 92 US 575,
608, 2 Otto 575, 23 L Ed 663 (1875)).

ORDER ON CROSS-MOTIONS FOR PARTIAL
SUMMARY JUDGMENT TC 5409 (CONTROL) 	Page 8 of 57
Express Companies 	Water Transportation upon Inland Water of the
State of Oregon
Telegraph Companies 	Air or Railway Express
Telephone Companies 	Communication
Refrigerator Car Companies 	Heating
Oil and Tank Line Companies 	Gas
Heat, Light, Power, Water, Gas, and Electric
Companies
Electricity
Pipeline
Toll Bridge
Private railcars of all companies not otherwise
listed in this subsection, if the private railcars
are rented, leased, or used in railroad
transportation or hire
Since 1935 the taxation of intangible property has been a feature unique to central
assessment. See Or Laws ch 274, § 1; ORS 307.030(2) (stating intangible property not used in a
business listed in ORS 308.515(1) is “not subject to assessment and taxation”).10 As the Oregon
Supreme Court recently discussed, the inclusion of intangible property for central assessment
and taxation also distinguishes Oregon from states that bar the taxation of intangible property.
10 For all purposes other than central assessment, ORS 307.020(1)(a) defines intangible property as follows:
“(a) ‘Intangible personal property’ or ‘intangibles’ includes but is not limited to:
“(A) Money at interest, bonds, notes, claims, demands and all other evidences of indebtedness,
secured or unsecured, including notes, bonds or certificates secured by mortgages.
“(B) All shares of stock in corporations, joint stock companies or associations.
“(C) Media constituting business records, computer software, files, records of accounts, title
records, surveys, designs, credit references, and data contained therein. “Media” includes, but is not limited
to, paper, film, punch cards, magnetic tape and disk storage.
“(D) Goodwill.
“(E) Customer lists.
“(F) Contracts and contract rights.
“(G) Patents, trademarks and copyrights.
“(H) Assembled labor force.
“(I) Trade secrets.”

ORDER ON CROSS-MOTIONS FOR PARTIAL
SUMMARY JUDGMENT TC 5409 (CONTROL) 	Page 9 of 57
See DISH Network, 364 Or at 291-92 (contrasting California approach).
A comparative timeline in the attached Appendix shows relevant developments in (1) the
taxation of intangible property, (2) central assessment, and (3) the Uniformity Clauses.11
C. 	Standard of Review
The court will grant a motion for summary judgment if the pleadings, “declarations, and
admissions on file show that there is no genuine issue as to any material fact and that the moving
party is entitled to prevail as a matter of law.” Tax Court Rule (TCR) 47 C; Christensen II v.
Dept. of Rev., 23 OTR 155, 162 (2018). When considering each party’s cross motion, the court
reviews the evidence “in a manner most favorable to the adverse party.” TCR 47 C; see Two Two
v. Fujitech America, Inc., 355 Or 319, 331, 325 P3d 707 (2014) (stating standard under
analogous Oregon Rule of Civil Procedure 47 C). The moving party will prevail as a matter of
law if no “objectively reasonable” factfinder could find for the adverse party. TCR 47 C;
Christensen II, 23 OTR at 163.
V. 	ANALYSIS
A. 	Timing for Application of Constitutional Test
Because the relevant statutes have evolved over the course of approximately 100 years,
there is some room to debate at what point the legislature fully enacted the difference in
treatment at issue in this case. This raises the following issue: As of when in the course of this
evolution should the court test the constitutional rationality of the statutes? Taxpayer argues that
the court should apply the tests to the law as of the date of enforcement, i.e. January 1, 2019,
through January 1, 2022, but Taxpayer also asserts that the law lacked a rational basis when
11 The court appreciates the parties’ contribution to this timeline through supplemental briefing at the
court’s request following oral argument. (See 6/8/2021, Delta Resp to Court’s 5/5/21 Ltr; 6/25/2021, Dept Post-Arg
Resp Br.)

ORDER ON CROSS-MOTIONS FOR PARTIAL
SUMMARY JUDGMENT TC 5409 (CONTROL) 	Page 10 of 57
enacted. (6/8/2021, Delta Post-Arg Resp Br at 25-28.) The Department argues that the
appropriate testing date is the effective date of 1935 legislation that exempted intangible property
from local assessment and taxation, but the Department also asserts that the same concerns that
motivated the legislature’s actions in 1935 still exist. (6/8/2021, Dept Post-Arg Br at 2-6.)
Following the Oregon Supreme Court’s opinion in Leathers v. City of Burns, 251 Or 206,
444 P2d 1010 (1968), the court will apply the tests for validity under the Oregon and federal
constitutions as of the applicable assessment dates. Leathers applied a rationality test to two
local gasoline delivery or storage ordinances.12 The court invalidated one of the ordinances,
which prescribed a maximum capacity for gasoline storage tanks, based on the facts as of the
date of trial. See also U. S. v. Carolene Products Co., 304 US 144, 153, 58 S Ct 778, 82 L Ed
1234 (1938) (“[T]he constitutionality of a statute predicated upon the existence of a particular
state of facts may be challenged by showing to the court that those facts have ceased to exist.”).
Leathers has not been overturned. But see Ag West Supply v. Hall, 126 Or App 475, 481-82, 869
P2d 383 (1994) (applying rational basis tests13 to state cardlock gasoline dispensing laws as of
the date of enactment because plaintiff claimed that statutes were unconstitutional when
enacted).14
12 In Leathers, the plaintiff asserted violations of the Due Process and Equal Protection Clauses of the
United States Constitution, as well as “comparable provisions of the Constitution of Oregon.” 251 Or at 218.
13 In Ag West the plaintiffs asserted violations of Article I, section 20, of the Oregon Constitution, and the
Equal Protection Clause of the Fourteenth Amendment to the United States Constitution. 146 Or App at 477.
14 The Court of Appeals applied the reasoning of then-retired Justice Hans Linde in a law review article
written during his tenure as a law professor. See Hans Linde, Due Process of Lawmaking, 55 Neb L Rev 197, 215-
22 (1976)). Linde’s article criticized Leathers, pointing out that the city in that case had adopted its ordinance some
16 years before the plaintiff’s facts arose, yet “[n]o one stopped to question the original validity of the ordinance
under the conditions of 1949; only the conditions at the date of trial were considered.” Linde, 55 Neb L Rev at 218.

ORDER ON CROSS-MOTIONS FOR PARTIAL
SUMMARY JUDGMENT TC 5409 (CONTROL) 	Page 11 of 57
B. 	What Is the Class?
The court’s next task is to define the legislative classification that Taxpayer challenges.
The parties offer differing views. Taxpayer presents intangible property as one of three major
classes of property, intrinsically distinct from the classes of real property and tangible personal
property. (See 3/12/2021, Delta Reply & Resp at 1.) Taxpayer asserts that the central
assessment laws invalidly subdivide the class of intangible property into the classes of taxable
and nontaxable, based on whether the property is used in a business listed in ORS 308.515(1).15
The Department takes the position that the only relevant classification is between
centrally assessed property and locally assessed property. (2/12/2021, Dept MPSJ at 5; 4/2/2021,
Dept Reply at 1-2 (“All centrally assessed property is valued and taxed; no distinction is made
between types of property. There is no ‘intangible property tax’ as such. * * * Therefore, tax is
not imposed on intangible property as a separate class.”); Argument of Marilyn Harbur, Oral
Argument, Jan 18, 2022, 2:14-2:15.) According to the Department, having drawn that
classification, the legislature is free to tax the property differently within each of the two classes:
the legislature may exempt intangible property on the locally assessed side of the line, while
taxing intangible property on the centrally assessed side of the line. (Argument of Marilyn
Harbur, Oral Argument, Jan 18, 2022, 2:14-2:15.) At times, the Department claims that the class
of centrally assessed property is indivisible; therefore, intangible property subject to central
assessment must be taxed. (4/2/2021, Dept Reply at 1-2; 6/25/2021, Dept Post-Arg Resp Br at 4.)
The court analyzes the two principal statutes, applying the framework in State v. Gaines,
346 Or 160, 171-72, 206 P3d 1042 (2009). The first principal statute is ORS 307.030, which the
15 Taxpayer emphasizes that it does not challenge the application of any of the other features of central
assessment, including unit valuation and formulary allocation and apportionment as a valid method for determining
the value of Taxpayer’s Oregon property subject to taxation. For purposes of its motion, Taxpayer disputes only the
notion that central assessment requires or justifies taxing its intangible property when similar intangible property,
not subject to central assessment, is not taxed. (See 3/12/2021, Delta Reply & Resp at 3.)

ORDER ON CROSS-MOTIONS FOR PARTIAL
SUMMARY JUDGMENT TC 5409 (CONTROL) 	Page 12 of 57
Oregon Supreme Court has found applicable to both centrally and locally assessed property. See
Northwest Natural Gas, 347 Or at 546 n 8 (stating ORS 307.030 contains “the provisions that
subject [a centrally assessed] taxpayer’s property to assessment and taxation.”). ORS 307.030
states:
“(1) All real property within this state and all tangible personal property situated
within this state, except as otherwise provided by law, shall be subject to
assessment and taxation in equal and ratable proportion.
“(2) Except as provided in ORS 308.505 to 308.674, intangible personal property
is not subject to assessment and taxation.”
(Emphasis added.) The text thus purports to state a general rule, that “all” real and tangible
personal property is assessable and taxable, while intangible property is not. The text supports
the first part of Taxpayer’s position, namely, that the legislature generally distinguishes among
three classes of property: real property, tangible personal property, and intangible personal
property. Under subsection (1), the first two classes (all real and tangible personal property)
generally are taxable, barring an exception “otherwise provided by law.” Id. Under subsection
(2), the third class (intangible property) generally is not taxable, barring an exception “as
provided in [the central assessment statutes].” Id.
The text of the other principal statute, ORS 308.505(14), defines “property,” as used in
the central assessment statutes, as follows:
“As used in ORS 308.505 to 308.681:
“* * * * *
“(14) ‘Property’:
“(a) Means all property of any kind, whether real, personal, tangible or
intangible, that is used or held by a company as owner, occupant, lessee or
otherwise, for the performance or maintenance of a business or service or for the
sale of a commodity, as described in ORS 308.515;
“(b) Includes, but is not limited to, the lands and buildings, rights of way,

ORDER ON CROSS-MOTIONS FOR PARTIAL
SUMMARY JUDGMENT TC 5409 (CONTROL) 	Page 13 of 57
roadbed, water powers, vehicles, cars, rolling stock, tracks, office furniture,
telephone and transmission lines, poles, wires, conduits, switchboards, machinery,
appliances, appurtenances, docks, watercraft irrespective of the place of registry
or enrollment, merchandise, inventories, tools, equipment, machinery, franchises
and special franchises, work in progress and all other goods or chattels; and
“(c) Does not include items of intangible property that represent:
“(A) Claims on other property, including money at interest, bonds, notes, claims,
demands or any other evidence of indebtedness, secured or unsecured; or
“(B) Any shares of stock in corporations, joint stock companies or associations.”
ORS 308.505(14) (emphasis added). The text of this definition of “property,” applicable solely
to the central assessment statutes, creates the kind of exception referred to in ORS 307.030(2) by
including “intangible” property (other than stocks and debt instruments) within the definition of
“property” that is required to be centrally assessed if used in one of the businesses listed in
ORS 308.515(1).
The court sees nothing in the text of these two statutes that eliminates the classes of real
property, tangible personal property, and intangible property when property is centrally assessed.
On the contrary, the definition of “property” for purposes of central assessment refers to “all
property of any kind, whether real, personal, tangible or intangible.” ORS 308.505(14)(a)
(emphasis added). The text of the central assessment statute thus recognizes and preserves the
classification made in ORS 307.030 among real property, tangible personal property, and
intangible property.16
16 In other words, the text reveals two sets of classifications relevant to this case: (1) the classification that
divides property into the three classes of (a) real property, (b) tangible personal property, and (c) intangible property;
and (2) the classification that divides property into the two classes of (a) locally assessed property and (b) centrally
assessed property. Each set of classifications (1) and (2) is superimposed simultaneously over the larger category of
“property”; both sets of classifications remain distinct, and neither set obscures the other. The result is to overlay a
grid consisting of six squares, one of which contains property that is both “intangible” and “centrally assessed.”
Property within that square is taxable by operation of ORS 307.030(2) and ORS 308.505(14).

ORDER ON CROSS-MOTIONS FOR PARTIAL
SUMMARY JUDGMENT TC 5409 (CONTROL) 	Page 14 of 57
The court turns to statutory context. The court readily identifies at least three statutes that
undermine the Department’s position that, within the class of centrally assessed property, there is
no distinction among real property, tangible personal property, and intangible property.
Exemptions or exclusions solely for intangible property that otherwise would be centrally
assessed are found in ORS 308.505(14)(c) (excluding, generally, “items of intangible property
that represent” stocks and bonds from definition of “property”) (emphasis added);17
ORS 308.674(1) (capping overall real market value by reference to the cost of “real property
and tangible personal property”) (emphasis added); and ORS 308.671(2) (exempting from
taxation “licenses” granted by the Federal Communications Commission, as well as “franchises”
held by companies in the communication business).18 These statutes illustrate that the class of
intangible property is not subsumed or eliminated merely because the property also is within the
class of centrally assessed property.
The Oregon Supreme Court’s decision in Northwest Natural Gas is consistent with
Taxpayers’ position and inconsistent with the Department’s position in this case. In Northwest
Natural Gas, the court held that an exemption for “inventory” in ORS 307.400 (2005) applied to
the taxpayer’s stores of gas held underground for sale to customers. 347 Or at 563. The
definition of “inventory” was expressly limited to “[i]tems of tangible personal property.” ORS
307.400 (2005) (emphasis added); see ORS 307.400 (same).
The court concludes that the classification at issue in this case incorporates both the
division between centrally and locally assessed property and the division among the three classes
of real property, tangible personal property, and intangible property. The resulting classes at
17 The Oregon Supreme Court referred to this “exclu[sion from] central assessment” in Northwest Natural
Gas; at that time the exclusion was codified as ORS 308.510(1) (2005). See Northwest Natural Gas, 347 Or at 554.
18 The statute specifies a value (book value, less accrued, reserved depreciation) that is exempt. ORS
308.671(3).

ORDER ON CROSS-MOTIONS FOR PARTIAL
SUMMARY JUDGMENT TC 5409 (CONTROL) 	Page 15 of 57
issue here are those of (1) intangible property used in a business listed in ORS 308.515(1)
(taxable), and (2) all other intangible property (not taxable).
C. 	Uniformity Clauses Require a Two-Part Analysis
Having established the relevant classification, the court must now identify any “rational
basis” for taxing or not taxing intangible property according to its use (or not) in the particular
businesses listed in ORS 308.515(1). As summarized above, a rational basis exists if (1) the
classification is based on “genuine differences,” and (2) “those differences bear a reasonable
relationship to the legislative purpose.” Knapp, 342 Or at 276 (internal quotations omitted). The
court examines these two requirements in greater detail.
1. 	“Genuine differences” require objectively determinable features or uses relevant to
the subject of the classification.
As to the first requirement, in Knapp the court concluded that genuine differences existed
between “developed property,” on which the city of Jacksonville’s ordinance imposed certain
water surcharges, and undeveloped property, to which the surcharges did not apply. Id. The
ordinance specified that the obligation to pay the surcharge “‘arises when a person responsible
uses or otherwise benefits from Public Safety services,’ which was presumed to occur whenever
a property was developed property.” Knapp I, 18 OTR at 27 (quoting Jacksonville Public Safety
Act § 3.01.040(3) (2003)). There appears to have been no disagreement among the parties about
the meaning of “developed property.”19
In Jarvill, the uniformity issues were whether the city of Eugene could (1) create a
special geographically defined district for the downtown core and impose new property, sales,
and gross receipts taxes solely within that district, and (2) within that district, impose flat taxes
19 Other provisions in the ordinance referred to each “‘residential unit’” and each “‘nonresidential unit,’”
defined terms that included references to “‘living facilities’” and a “‘non-residential structure which provides
facilities for one or more businesses * * *’” respectively. Id. (quoting Jacksonville Public Safety Act § 3.01.040(2)
(as amended Oct 7, 2003).

ORDER ON CROSS-MOTIONS FOR PARTIAL
SUMMARY JUDGMENT TC 5409 (CONTROL) 	Page 16 of 57
on professional businesses while taxing other businesses on a percentage of sales or gross
receipts. The court upheld the new taxes. The court discussed two types of qualitative
differences that could distinguish land in different geographic areas: “natural qualities” (such as
annual rainfall) and “politically imposed qualities,” including those resulting from economic or
human conditions. Jarvill, 289 Or at 180. The court concluded that the downtown area was
characterized by distinct economic or human conditions, including “difficulty of access, scarcity
of parking, density, degeneration of physical plant, loss of consumer patronage, esthetic
depreciation, concentration of polluting agents, declining value and other * * * economic and
physical factors of contemporary urban life * * *.” Id. at 181 (quoting Jarvill v. City of Eugene,
40 Or App 185, 196, 594 P2d 1261 (1979)). The court also concluded that the downtown district
was distinct because the city, by amendment of its charter through a vote of the people, had
“committed itself to providing services and programs that patently and physically distinguish the
District from any other area of the city.” Id.
From these two cases, this court concludes that the existence of objectively determinable
features intrinsic to the property can support a finding of “genuine differences” for purposes of
the rational basis analysis. Objectively determinable features may include economic or
politically imposed attributes.
Other longstanding cases establish a difference in use as an additional kind of “genuine
difference” for Uniformity Clause purposes. Ten years after the Uniformity Clauses had been
amended, the Oregon Supreme Court interpreted them to uphold a statute classifying as exempt
from tax “such real estate belonging to [literary, benevolent, charitable and scientific institutions]
as shall be actually occupied for the purposes for which they were incorporated.” Oregon Laws,
title XXIX, ch II, § 4235 (1920) (emphasis added); see Corporation of Sisters of Mercy v. Lane

ORDER ON CROSS-MOTIONS FOR PARTIAL
SUMMARY JUDGMENT TC 5409 (CONTROL) 	Page 17 of 57
Co., 123 Or 144, 261 P 694 (1927). The court reasoned that the “adoption of a legislative policy
exempting hospitals from taxation is predicated upon the theory that the establishment and
maintenance of charitable hospitals serves the public welfare.” Sisters of Mercy, 123 Or at 164
(emphasis added). As a second example, in People’s Util. Dist. et al v. Wasco Co. et al, the
taxpayer was a people’s utility district, a local government entity, whose property was subject to
tax. 210 Or 1, 305 P2d 766 (1957); Or Laws 1939 ch 387, § 10 (subjecting property to tax if
“owned, used, operated or controlled by any people’s utility district in or for the production,
transmission, distribution or furnishing” of electric power). The taxpayer argued that the law
violated the Uniformity Clauses because “‘[t]he property of a PUD is the only property in
Oregon of any municipality or public corporation dedicated to a public purpose which is subject
to ad valorem property taxation.’” People’s Util. Dist., 210 Or at 21. The court upheld the
classification based on two conceivable differences:
“The first is that people’s utility districts have as their primary province the
furnishing of utility services, in this case, electricity. Those municipalities which
operate power plants do so, on the other hand, as an incident to their main
function of operating a local governmental structure. Another factor settles around
the use to which the electric power is put. Although both people’s utility districts
and municipalities provide service to paying customers, municipalities provide
power for themselves to assist in their own operations, such as lighting streets and
illuminating and providing power for municipal buildings.”
Id. at 22. Both rationales rely on differing uses to determine whether otherwise identical
property is taxable. In the first rationale, the distinction turns on whether power production is an
incidental part of a larger municipal purpose. In the second, the distinction is between use of the
property to generate electricity solely for sale versus for both sale and for operation of city-
owned light fixtures.
From the Sisters of Mercy and People’s Util. Dist. cases, this court concludes that the
legislature may, without running afoul of the Uniformity Clauses, subject otherwise identical

ORDER ON CROSS-MOTIONS FOR PARTIAL
SUMMARY JUDGMENT TC 5409 (CONTROL) 	Page 18 of 57
property to different tax treatment based on a difference in use. That difference in use may have
nothing to do with the intrinsic characteristics of the property. In the case of real property,
Sisters of Mercy teaches that the Uniformity Clauses permit the same hospital building and
grounds to be taxed or not, depending on factors such as whether the persons running the facility
use it to treat only paying patients or also those who cannot pay. See 123 Or at 151 (recounting
hospital superintendent testimony: “If people have it, we ask for it. If not, we don’t.”).
Similarly, People’s Util. Dist. establishes that the same electricity generation plant and
equipment can be taxed or not, depending on whether the public operator uses it to generate
power for sale or uses substantial amounts of the power to light public facilities without charge.
Finally, the Oregon Supreme Court’s decision in Mathias establishes by implication that
“genuine” differences include only those that are relevant to the classification and the purpose it
serves. In Mathias (the only case in which the Oregon Supreme Court has invalidated a tax
classification for violation of the Uniformity Clauses),20 the classification at issue was the so-
called “developer’s discount,” which was a statutory requirement to value a group of four or
more vacant lots in the same subdivision differently, depending on whether they were held by the
same owner. See ORS 308.205(3) (1989) (added by Or Laws 1989, ch 796, § 30 (HB 2338)) (“If
the property consists of four or more lots within one subdivision, and the lots are held under one
ownership, the lots shall be valued under a method which recognizes the time period over which
20 Redfield et al. v. Fisher et al. mentions the Uniformity Clauses but reaches a conclusion under federal Equal
Protection. See 135 Or 180, 201-04, 292 P 813 (1930). On rehearing, the court specifically declined to construe the
amended Uniformity Clauses. See Redfield et al. v. Fisher et al., 135 Or 205, 207-08, 295 P 461 (1931) (stating that
the previous decision “nowhere attempted to construe the amended sections of our [state] Constitution). The court,
under federal Equal Protection, invalided a tax on intangibles because the treatment of individuals and corporations
was different. See Redfield, 135 Or at 199. The court’s reasoning in Redfield was based on Quaker City Cab Co. v.
Penna., 277 US 389, 48 S Ct 553, 72 L Ed 927 (1928), which has since been overruled as “a relic of a bygone era”
in Lehnhausen v. Lake Shore Auto Parts Co., 410 US 356, 365, 93 St Ct 1001, 35 L Ed 2d 351 (1973). Tharalson,
281 Or at 17 n 12.

ORDER ON CROSS-MOTIONS FOR PARTIAL
SUMMARY JUDGMENT TC 5409 (CONTROL) 	Page 19 of 57
those lots must be sold in order to realize current market prices for those lots.”). The court
invalidated the classification statute because the court found that all the parcels of vacant land at
issue, whether or not under common ownership, were, “identically, ‘lots’ in subdivisions, not
properties of inherently different kinds or uses.” Mathias, 312 Or at 61 (emphasis added). By
referring to the lots as “identical[ ],” the court implicitly put no significance on the fact that every
lot necessarily differs from any other lot, as no piece of land can occupy the space of any other
piece of land. Each lot in Mathias must have had a unique location and at least detectable
differences in view, as well as different proximity to corners, cross streets, and improvements
such as fire hydrants. The court focused instead on identifying any differences relevant to the
purpose of the classification: determining the property’s market value. Finding no relevant
differences, the court invalidated the “developer’s discount” classification as not based on
“genuine difference[s].” Id. at 62-63.
The court thus restates the elements of the “genuine differences” requirement. “Genuine
differences” are objectively determinable features relevant to the purpose of the classification,
which may include physical, economic, or political features of the kind or use of the property.
Applying this requirement, the court will look for differences relevant to the taxation or
exemption of intangible property, keeping in mind that the legislature is free to create subclasses
or to aggregate items together under one general classification for different reasons. See Jarvill,
289 Or at 180 (“[I]f a subterritory is different in quality compared to the rest of the territory, then
article I, section 32, does not prohibit a taxing authority from defining the subterritory as a
separate class.”). In other words, any one, or any grouping, of the fourteen types of business
/ / /
/ / /

ORDER ON CROSS-MOTIONS FOR PARTIAL
SUMMARY JUDGMENT TC 5409 (CONTROL) 	Page 20 of 57
listed in ORS 308.515(1) could have its own distinct set of genuine differences relevant to the
taxation of intangible property.21
2. 	The court may infer the legislative purpose and the “reasonable relationship” to
genuine differences.
Turning to the second requirement, in Knapp the purpose of the sewer and water
surcharge ordinance was to “help pay for the benefits conferred on [c]ity residents and
businesses by the provision of an adequate program of public safety * * *.” Knapp, 342 Or at
271 (internal citations omitted). The Oregon Supreme Court determined that the city “‘could
have correctly concluded that safety needs increase when property is developed.’” Id. at 276
(quoting Knapp I, 18 OTR at 38). That determination supplied the reasonable relationship
justifying the surcharges. In Jarvill, the court implicitly concluded that the city had the public
purpose of “‘economic promotion and development for the district,’” as stated in the charter
amendment. 289 Or at 159 (quoting Eugene City Charter, ch VII, § 48(70) (1973)). The trial
court found that the taxes raised would be expended on free parking and advertising services that
would revitalize the downtown district and benefit the city as a whole. See id. at 170. The
Supreme Court implicitly relied on this finding in upholding the constitutionality of the
ordinance.
These cases are consistent with the approach in other “rational basis” cases, in which the
court considers public purposes expressly stated in the law (as in Jarvill) or capable of being
inferred from the facts (as in Knapp), that lawmakers “rationally could believe” would be
21 For comparison, ORS 307.030(1) classifies all real property and all tangible personal property either as
“subject to assessment and taxation” or as exempt from taxation if “otherwise provided by law.” Within the class of
exempt property, both art museums and sewage treatment facilities are eligible for exemption from property tax, but
each for different reasons and under different sets of classifying requirements. See ORS 307.130(2) (art museums
and “literary, benevolent, charitable and scientific institutions”); ORS 307.118 (exempting certain sewage and
wastewater treatment facilities); see, e.g., Fox v. Galloway, 174 Or 339, 148 P2d 922 (1944) (upholding in part,
against uniformity and equal protection challenges, privilege tax, at different rates, on operation of coin-operated
games, jukeboxes, and penny-operated amusement devices).

ORDER ON CROSS-MOTIONS FOR PARTIAL
SUMMARY JUDGMENT TC 5409 (CONTROL) 	Page 21 of 57
promoted by the classification. See Crocker, 332 Or at 55 (“A legislator rationally could believe
that households in which the parents do not live together might need judicial assistance in
making educational decisions, because the absence of cohabitation itself likely reflects a lack of
harmony and consensus in parental decision-making.”).
The court now applies the two-part analysis in Knapp to the parties’ positions.
D. 	Taxpayer’s Argument: Taxing Intangibles Only When Used in Centrally Assessed
Businesses Fails Mathias’s “Inherent Differences” Requirement and Impermissibly
Classifies Property Based on Characteristics of its User
Citing Mathias, Taxpayer argues: “There are no ‘inherent, qualitative, genuine, rational
differences’ between the intangibles used by [Taxpayer] and the same intangibles used by other
businesses whose property in Oregon is locally assessed, as there must be to comply with the
uniformity requirement.” (1/15/2021, Delta MPSJ at 1 (quoting Mathias, 312 Or at 58).) As to
the first part of this argument, the court agrees that there is no difference in kind as between
centrally and locally assessed intangible property. All intangible property is either exempt or
taxable depending on whether it is used in a business listed in ORS 308.515(1), with the
exception of stocks and bonds, which are effectively exempt from tax regardless whether they
otherwise would be centrally or locally assessed.22 No party has argued that any material
difference in kind exists between the items constituting intangible property for local or central
assessment purposes. Likewise, the court sees nothing in the law that suggests any such
difference. The express, non-exclusive definition in ORS 307.020(1)(a)(D) to (I) for local
22 Debt instruments and stocks not used in a business listed in ORS 308.515(1) are “intangible personal
property” under ORS 307.020 and therefore are “not subject to assessment and taxation” under ORS 307.030(2).
See ORS 307.020(1)(a)(A) (referring to “[m]oney at interest, bonds, notes, claims, demands and all other evidences
of indebtedness, secured or unsecured, including notes, bonds or certificates secured by mortgages”), (B) (referring
to “[a]ll shares of stock in corporations, joint stock companies or associations”). A materially identical list of such
items is excluded from the definition of “property” for purposes of central assessment. See ORS 308.505(14)(c)(A)
(referring to “[c]laims on other property, including money at interest, bonds, notes, claims, demands or any other
evidence of indebtedness, secured or unsecured”), (B) (referring to “[a]ny shares of stock in corporations, joint stock
companies or associations”).

ORDER ON CROSS-MOTIONS FOR PARTIAL
SUMMARY JUDGMENT TC 5409 (CONTROL) 	Page 22 of 57
assessment purposes refers to goodwill; customer lists; contracts and contract rights, patents,
trademarks, and copyrights; assembled labor force; and trade secrets. For central assessment
purposes, the legislature did not define “property” or “intangible” in ORS 308.505(14), but the
plain meaning of “intangible property” is “property having no physical substance apparent to the
senses: incorporeal property (as choses in action) often evidenced by documents (as stocks,
bonds, notes, judgments, franchises) having no intrinsic value or by rights of action, easements,
goodwill, trade secrets.” Webster’s Third New Int’l Dictionary 1173 (unabridged ed 2002); see
also Appellant’s Opening Brief at 6-7, Tektronix, Inc. v. Dept. of Rev., 354 Or 531, 316 P3d 276
(2013) (SC S060912) (listing, as “items of intangible property,” “[i]nstalled base,” “[d]istribution
channel,” “[e]xisting technology,” “[i]n-[p]rocess R&D,” “[t]radename/trademarks,”
“[a]ssembled workforce,” and “[g]oodwill”); Tektronix, Inc. v. Dept. of Rev., 354 Or 531, 533 n
1, 316 P3d 276 (2013) (treating the listed items as intangible assets; declining to decide whether
they were distinct from taxpayer’s label of “goodwill”).23
In contrast to the facts in Mathias, however, the court does find a clear difference in use
between centrally and locally assessed property. The uses that cause intangible property to be
subject to assessment and taxation are those fourteen types of business uses listed in
ORS 308.515(1). Taxpayer at times seeks to equate the list of businesses with a list of different
owners of the property, invoking Mathias’s observation that “[c]lassifications for property tax
purposes based purely upon characteristics of the owner have been declared invalid * * *.”
Mathias, 312 Or at 62, n 8. (See 1/19/2021, Delta MPSJ at 6-7.) This court concludes that
23 The court notes that certain kinds of “media” are defined as intangible property for local assessment
purposes, while their status as tangible or intangible is less clear under the undefined term used for central
assessment purposes; however, no party has raised an issue as to such media. Compare ORS 307.020(1)(a)(C)
(“[I]ntangible personal property” for local assessment purposes includes “[m]edia constituting business records,
computer software, files, records of accounts, title records, surveys, designs, credit references, and data contained
therein.”) with OAR 150-314-0435(4)(c)(B) (defining “software” as tangible personal property for purposes of
income tax apportionment).

ORDER ON CROSS-MOTIONS FOR PARTIAL
SUMMARY JUDGMENT TC 5409 (CONTROL) 	Page 23 of 57
Taxpayer’s argument fails because the central assessment statutes, and their interpretation by the
Oregon Supreme Court, make clear that central assessment is triggered by use, not by ownership.
See ORS 308.515(1) (requiring the Department to centrally assess property “used or held for
future use by any company in performing or maintaining” any of the businesses listed);
Pacificorp Power Marketing v. Dept. of Rev., 340 Or 204, 217-218, 131 P3d 725 (2006) (holding
taxpayer’s rights to use city-owned power plant in taxpayer’s electricity business caused facility
to be assessed to taxpayer, despite taxpayer’s lack of outright ownership).
The court rejects Taxpayer’s argument regarding the lack of inherent differences in the
property, apart from characteristics of the property’s owners. The court finds this argument
unique to property tax and the Uniformity Clauses. Federal Equal Protection case law presented
by the parties does not address this argument.24
E. 	Department’s Argument: Intangible Property Should Be Taxed When a Taxpayer’s
Property Is Subject to Unit Valuation by Department Personnel
The Department implies that its authority under ORS 308.555 to apply unit valuation to
property used in a business listed in ORS 308.515(1) provides sufficient justification under the
Uniformity Clauses and the Equal Protection Clause to tax the intangibles used in such a
business. The Department cites the United States Supreme Court’s decision in Adams Express,
decided some 12 years before the legislature adopted the 1909 central assessment law. That
decision states:
“Now, whenever separate articles of tangible property are joined together, not
simply by a unity of ownership, but in a unity of use, there is not infrequently
developed a property, intangible though it may be, which in value exceeds the
24 The court finds the paucity of federal authority unsurprising, because the federal government only rarely
has imposed ad valorem taxes on property. Such a tax would likely be considered a “direct” tax, required to be
“apportioned among the several States” based on population, under US Const, Art I, §9 and Art I, § 2. See Boris
Bittker & Lawrence Lokken, Federal Taxation of Income, Estates and Gifts, ¶ 1.2 (3d ed 2023) (“[A]pportionment
of a real property tax requires a different rate for every state in order to insure that the aggregate amount paid by
each state is proportional to its population rather than to the value of the property within its borders.”).

ORDER ON CROSS-MOTIONS FOR PARTIAL
SUMMARY JUDGMENT TC 5409 (CONTROL) 	Page 24 of 57
aggregate of the value of the separate pieces of tangible property.
“* * * * *
“Suppose an express company is incorporated to transact business within the
limits of a state, and does business only within such limits, and, for the purpose of
transacting that business, purchases and holds a few thousands of dollars' worth of
horses and wagons, and yet it so meets the wants of the people dwelling in that
state, so uses the tangible property which it possesses, so transacts business
therein, that its stock becomes in the markets of the state of the actual cash value
of hundreds of thousands of dollars. To the owners thereof, for the purposes of
income and sale, the corporate property is worth hundreds of thousands of dollars.
Does substance of right require that it shall pay taxes only upon the thousands of
dollars of tangible property which it possesses? Accumulated wealth will laugh at
the crudity of taxing laws which reach only the one, and ignore the other; while
they who own tangible property, not organized into a single producing plant, will
feel the injustice of a system which so misplaces the burden of taxation.”
Adams Express Co. v. Ohio State Auditor, 166 US 185, 219-21, 17 S Ct 604, 41 L Ed 965
(1897). (See 4/16/2021, Dept X-MPSJ at 8-10 (“It is certainly rationally conceivable that the
legislature was guided by the Court’s decision to use unit valuation that captures intangible
property value for centrally assessed companies doing business within and without the state.”).)
There is no doubt that Adams Express and other longstanding decisions of the United
States Supreme Court make clear that unit valuation enables a state to more effectively tax
intangible property. See Comcast, 356 Or at 290 (“Central assessment also allowed assessors to
capture additional value inherent in certain property. In particular, central assessment made
possible assessments which would reach those large intangible values, called franchise value or
good will, which could not be effectively taxed by local assessors.”) (quoting Union Pacific
Railway Co. v. Cheyenne, 113 US 516, 522, 5 S Ct 601, 28 L Ed 1098 (1885). This is because, as
the quoted passage in Adams Express recites, many kinds of intangible property are created by
the operation of real property and tangible personal property together, having been assembled
and put to a common use as a unit. However, unit valuation does not require a state to tax

ORDER ON CROSS-MOTIONS FOR PARTIAL
SUMMARY JUDGMENT TC 5409 (CONTROL) 	Page 25 of 57
intangible property, and some states that use unit valuation do not tax intangible property.25 See
DISH Network, 364 Or at 291-92 (describing California’s regime that taxes intangible property
“‘to the extent that the [intangible] property enhances the value of tangible, taxable property
which is subject to unit valuation’”) (quoting Bruce A. Fowler, Unit Valuation: Oklahoma’s
Illegal Tax on Intangible Property, 31 Tulsa L J 367, 381-82 (1995); CAL REV & TAX CODE §
212(c) (West 2023) (“Intangible assets and rights are exempt from taxation and, except as
otherwise provided in the following sentence, the value of intangible assets and rights shall not
enhance or be reflected in the value of taxable property. Taxable property may be assessed and
valued by assuming the presence of intangible assets or rights necessary to put the taxable
property to beneficial or productive use.”); CAL REV & TAX CODE § 723 (West 2023) (“The
[California State Board of Equalization] may use the principle of unit valuation in valuing
properties of an assessee that are operated as a unit in a primary function of the assessee.”);
Western States Association of Tax Administrators Committee on Centrally Assessed
Property, Appraisal Handbook: Unit Valuation of Centrally Assessed Properties, VI-1 to VI-6
(2009) (discussing intangible personal property exemptions in unitary valuation regimes). The
rationale stated in Adams Express and the practice of other states make clear that unit valuation is
the means, while taxing intangible property is the end. The Department may not rely on the
former as a rational basis for the latter. Stated in terms of Knapp and Jarvill, unit valuation is
not a “genuine difference” on which a classification of intangible property for taxation rationally
25 Furthermore, the statutory overlap between central assessment and the taxation of intangible property is
not absolute. Oregon stops short of taxing all intangible property used in a business listed for central assessment,
having carved out several exceptions to the taxation of otherwise centrally assessable intangible property, as noted
above. See ORS 308.505(3) (2021) (excluding television and radio stations that primarily use earth-based
transmitters from the definition of “communication”); ORS 308.505(14)(c) (excluding items of intangible property
representing stocks and bonds from definition of “property”); ORS 308.674(1) (capping real market value at
percentage exceeding original cost of real property and tangible personal property); ORS 308.671(2) (exempting
from FCC licenses and franchises held by companies in the communications business).

ORDER ON CROSS-MOTIONS FOR PARTIAL
SUMMARY JUDGMENT TC 5409 (CONTROL) 	Page 26 of 57
may be based because both are parts of the same central assessment regime; unit valuation is not
a separate, objectively determinable fact. (See also 6/25/2021, Delta Reply to Post-Arg Br at 7
(“In effect, the Department avers that, if a rational classification exists for a scheme of central
assessment, then it justifies any different treatment of the two groups so classified.”).)26
Similarly, the court rejects any notion that intangible property may be taxed merely
because it is assessed centrally by Department personnel, rather than by local assessors.27 There
is no question that “administrative convenience” may serve as a valid legislative purpose for a
classification. See, e.g., Carmichael v. Southern Coal Co., 301 US 495, 511, 57 S Ct 868, 81 L
Ed 1245 (1937) (upholding, against federal Equal Protection challenge, state unemployment
insurance tax exemption for employers of fewer than eight employees; legislature rationally
could have been concerned about “administrative cost and burden” to state of taxing all small
employers). However, there must first be “genuine differences” in the relevant characteristics or
use of property, akin to the difference in Carmichael between seven employees and eight
employees. Id. at 510-11. Central assessment is no more a “genuine difference” in the use of
property than unit valuation; both are features of the provisions first enacted in 1909 to enhance
the state’s ability to tax intangible property.
F. 	Department’s Argument: the Same Underlying Reasons that Support a Central
Assessment Regime Also Support Taxing Intangibles
The Department also argues that the businesses listed in ORS 308.515(1) share
characteristics that constitute “genuine differences” when compared to other uses of intangible
property.
26 Indeed, the court in Mathias stated that even a “regulatory” classification that exists outside the tax at
issue cannot necessarily be “borrowed and transferred to an ad valorem tax setting.” Mathias, 312 Or at 62.
27 The court posited this theory in its November 8, 2021 letter to the parties and invited their comment.
(See 3/3/2022, PacifiCorp Resp at 16; 4/6/2022 Dept Resp at 8.)

ORDER ON CROSS-MOTIONS FOR PARTIAL
SUMMARY JUDGMENT TC 5409 (CONTROL) 	Page 27 of 57
1. 	Analysis of 2009 legislative findings
The principal source on which the Department relies to describe the objectively
determinable facts unifying the list of businesses in ORS 308.515(1) is the legislature’s 2009
findings, which characterize property subject to central assessment as “utility property,
transportation company property, similar business property that has inherent value due to the
capacity of the property to be operated as a network over a large geographic area and other property
that is appropriate for central assessment * * *.” Or Laws 2009, ch 128, § 1. The Department relies
heavily on the term “network” as an essential element of the class of property used in the listed
businesses. Taxpayer disputes, however, that the listed businesses use property as a “network” in
any manner that is distinguishable from other businesses. Taxpayer points to several examples of
companies in other lines of business that describe themselves in public filings as having assembled a
“network” to transport or distribute goods. (Argument of David Crapo, Oral Argument Jan 18, 2022,
at 2:33 (referring to a trucking logistics company, two express companies with both air and road-
based operations, and a national retail chain).) Taxpayer claims that there is no genuine difference
between intangible property used in those businesses and intangible property in a business listed in
ORS 308.515(1).
To begin, the court considers whether and how to apply the Oregon Supreme Court’s
framework for analyzing statutes pursuant to Gaines, 346 Or at 171-72. Courts typically use that
framework when interpreting a statute whose application is at issue in the case, such as a tax statute
that imposes a tax or creates an exemption. See, e.g., AKS LLC v. Dept. of Rev., 23 OTR 300, 307-09
(2019) (applying framework to statute imposing tax); Bert Brundige, LLC v. Dept. of Rev., 23 OTR
353, 354-56 (2019) (applying Gaines framework to tax exemption statute). In this case, however, the
2009 findings do not create the classification at issue; it is ORS 307.030 and ORS 308.515(1) that
create the classification. Rather, the 2009 findings are the opening section of a law that purports to

ORDER ON CROSS-MOTIONS FOR PARTIAL
SUMMARY JUDGMENT TC 5409 (CONTROL) 	Page 28 of 57
“modernize and clarify” the existing central assessment statutes while making no “change in the
policies of the State of Oregon with respect to the central assessment system * * *.” Or Laws 2009,
ch 128, §1. The legislature wrote the 2009 findings 100 years after enacting the first central
assessment law, and nearly 75 years after enacting the exemption for intangible property now in ORS
307.030(2). The court cannot, therefore, treat the 2009 findings as a statement of the intention of the
legislature that drafted the statutes at issue. See DeFazio v. WPPSS, 296 Or 550, 561, 679 P2d 1316
(1984) (“The views legislators have of existing law may shed light on a new enactment, but it is of
no weight in interpreting a law enacted by their predecessors.”); cf. Oregon Cable
Telecommunications v. Dept. of Rev., 237 Or App 628, 641, 240 P3d 1122 (2010) (stating that the
preamble to bill enacting law at issue “further informs our understanding of the legislature’s
intention”); but see City of Portland v. Tidyman, 306 Or 174, 185, 759 P2d 242 (1988) (placing no
reliance on ordinance’s list of findings that the court determined were “vague and conclusory”).
However, as explained above, the court’s inquiry in this case is not limited to discerning the intention
of the legislature that adopted the statutes at issue; rather, the court need only supply any conceivable
rationale for creating the particular list of businesses that exists today. The court will consider
whether the 2009 findings supply a rational basis for taxing intangible property when used in a
business listed in ORS 308.515(1); the court will apply the Gaines framework simply as a tool to
determine the meaning of the findings.
The court starts with the text of the 2009 findings, which lists four types of property
comprising centrally assessed property:
(1) 	“utility property”;
(2) 	“transportation company property”;
(3) 	“similar business property that has inherent value due to the capacity of the
property to be operated as a network over a large geographic area”; and
/ / /

ORDER ON CROSS-MOTIONS FOR PARTIAL
SUMMARY JUDGMENT TC 5409 (CONTROL) 	Page 29 of 57
(4) 	“other property that is appropriate for central assessment.”
Or Laws 2009, ch 128, § 1(1).28
a. 	“Utility property”
Neither the 2009 law nor the central assessment statutes as in effect in 2009 or for the tax
year[s] at issue define “utility.” The plain meaning of “utility,” as of 2009 and today, includes
“public utility” as a synonym, which in turn is defined as “a business organization deemed by
law to be vested with public interest usu[ally] because of monopoly privileges and so subject to
public regulation such as fixing of rates, standards of service and provision of facilities.”
Webster’s Third New Int’l Dictionary 2525 (unabridged ed 2002) (defining “utility”); id. at 1836
(defining “public utility”). The technical legal definition of “public utility” is similar. See
Black’s Law Dictionary 1686 (9th ed 2009) (“A business enterprise that performs an essential
public service and that is subject to governmental regulation. - public utility. (1895) 1. A
company that provides necessary services to the public, such as telephone lines and service,
electricity, and water. • Most utilities operate as monopolies but are subject to governmental
28 Section 1 of chapter 128 states in full:
“SECTION 1. (1) The Legislative Assembly finds that the central assessment by the Department
of Revenue of utility property, transportation company property, similar business property that has inherent
value due to the capacity of the property to be operated as a network over a large geographic area and other
property that is appropriate for central assessment is a fair, equitable and efficient way to determine value
for property tax purposes and to apportion that value among local taxing districts.
“(2) The Legislative Assembly further finds that central assessment of these types of property has
occurred for more than 80 years and that the central assessment system continues to operate in a fair,
equitable and efficient way, but that the statutory law upon which the central assessment system is based
contains obsolete or confusing language, references to antiquated technologies and disorganized structure.
“(3) The Legislative Assembly declares that the purpose of the amendments to statutes by sections
2 to 15 of this 2009 Act is to modernize and clarify the central assessment statutory law, while continuing
the central assessment system as it currently operates.
“(4) The Legislative Assembly further declares that the amendments to statutes by sections 2 to 15
of this 2009 Act do not constitute a change in the policies of the State of Oregon with respect to the central
assessment system and the administration of the central assessment system by the Department of Revenue.”
Or Laws 2009, ch 128, §1(1).

ORDER ON CROSS-MOTIONS FOR PARTIAL
SUMMARY JUDGMENT TC 5409 (CONTROL) 	Page 30 of 57
regulation. 2. A person, corporation, or other association that carries on an enterprise for the
accommodation of the public, the members of which are entitled as a matter of right to use the
enterprise’s facilities.”) (emphasis in original); Black’s Law Dictionary 1859 (11th ed 2019)
(same). The court concludes that the plain and technical legal meanings are essentially the same,
each containing the elements of public interest, monopoly privileges, and rate regulation. The
legal definition merely fleshes out the plain meaning by adding the element of the public’s right
to use a utility’s facilities, as well as some examples of services commonly provided by a public
utility: telephone, electric, and water services.
For context, the court turns to other central assessment statutes in place in 2009. The
central assessment statutes used the term “utility” in two places.29 First, a “person” or
“company,” whose use of property in a listed business may cause the property to be subject to
central assessment, included a “people’s utility district,” a term left undefined in the central
assessment statutes but provided for in ORS chapter 261 (2009).30 ORS 308.505(8) (2009).
Second, ORS 308.515(8) (2009) referred to the making of electricity sales to “an electric utility,
as defined in ORS 758.505,” as one criterion for excluding certain small biomass-fueled
electricity generation facilities from central assessment. In turn, ORS 758.505(4) (2009) defined
an “electric utility” as either a “public utility” (i.e., one regulated by the Oregon Public Utility
Commission (OPUC) under ORS chapter 757 (2009)) or a “nonregulated utility” (i.e., a people’s
utility district, a municipal utility operating under ORS chapter 225, or an electric cooperative
organized under ORS chapter 62). Based on these references, the court considers the various
29 Then, as now, the list of businesses in ORS 308.515(1) does not use the term “utility” or purport to limit
the listed businesses to public utilities.
30 ORS 261.050(1) (2009) generally provided for the assessment and taxation of people’s utility district
property “in the same manner” as property of “private corporations or individuals for the purpose of furnishing
electricity or electric service to the public.”

ORDER ON CROSS-MOTIONS FOR PARTIAL
SUMMARY JUDGMENT TC 5409 (CONTROL) 	Page 31 of 57
contemporaneous statutes dealing with regulated public utilities, people’s utility districts, and
municipally owned plants to be relevant context in interpreting “utility” as used in the 2009
findings. It is readily apparent that “public utilities” regulated by the OPUC had the hallmarks of
the plain and technical legal definitions of “utility” set forth above.31 The lines of business
regulated by the OPUC were “heat, light, water or power” (ORS 757.005(1)(a)(A) (2009)), as
well as certain “telecommunications” services (ORS 759.005 (2009)).32 Also meeting the
dictionary definitions of a “utility” was any petroleum “pipeline company that is a common
carrier and that is regulated as to its rates or practices by the United States.” ORS 772.510
(2009) (granting condemnation authority).33
Based on the plain and legal meanings of “utility,” as well as the context found in other
Oregon statutes, the court concludes that the 2009 findings use that term to refer to the four
businesses listed in ORS 308.515(1)(i) through (L): heating, gas, electricity, and pipeline; as well
as any “communication” businesses under ORS 308.515(1)(h) that are “telecommunications”
31 Subject to numerous exceptions, regulated public utilities were allowed to operate within exclusive
service territories. See ORS 758.305 (2009) (water); ORS 758.435 (2009) (electricity and gas); ORS 759.500(1)
(2009) (telecommunications). The OPUC was charged with setting “fair and reasonable” rates that public utilities
charge customers. ORS 756.040(1) (2009); ORS 759.015 (2009) (“just and reasonable”). Heat, light, water, and
power companies have and had condemnation authority under ORS 772.210 (2009), as have telecommunications
utilities under ORS 759.075 to 759.080 (2009).
32 Subsection (7) of ORS 759.005 (2009) defined “telecommunications” as “the transmission of information
chosen by a person, between or among points specified by the person, without change in the form or content of the
information sent or received.” Subsection (8) defined “telecommunications service” as “telecommunications that
are offered for a fee to the public, or to such class of users as to be effectively available to the public, without regard
to the facilities used to provide the telecommunications.” “Telecommunications service” did not include services
provided by radio common carrier; one-way transmission of television signals; private telecommunications
networks; or communications of the customer that take place on the customer side of on-premises equipment. See
also ORS 759.005(9) (2009) (defining “telecommunications utility”). Cf. ORS 308.505(3) (2009) (defining
“communication” as used in ORS 308.515(1)(h) as “includ[ing] telephone communication and data transmission
services by whatever means provided”).
33 The lines of business that are rate-regulated utilities have not changed since 2009; for the tax years at
issue (2019-20, through 2022-23), the lines of business regulated by the OPUC remain “heat, light, water or power”
providers and certain “telecommunications” businesses. ORS 757.005(1)(a)(A) (providing that “public utility”
means an entity providing “heat, light, water or power”); ORS 757.005(1)(a)(A) (2019) (same); ORS
757.005(1)(a)(A) (2021) (same); ORS 759.005 (regulating certain “telecommunications” utilities); ORS 759.005
(2019) (same); ORS 759.005 (2021) (same).

ORDER ON CROSS-MOTIONS FOR PARTIAL
SUMMARY JUDGMENT TC 5409 (CONTROL) 	Page 32 of 57
services under ORS 759.005. The court does not rule out the possibility that additional
businesses listed in ORS 308.515(1) could, upon factual examination, be found to share some or
all of the characteristics of a utility: rate regulation, territorial monopoly, and elements of public
interest such as condemnation authority.
b. 	“Transportation company property”
The court turns to “transportation company property,” the second type of property listed in
the 2009 findings. The 2009 act amended an existing definition of “transportation” in ORS 308.505.
Because the findings state that “the amendments [in] this 2009 Act do not constitute a change in the
policies of the State of Oregon with respect to the central assessment system and the administration
of the central assessment system,” the court considers both the pre-amendment definition of
“transportation” and the as-amended definition. Or Laws 2009, ch 128, § 1.
The pre-amendment definition provided:
“‘Transportation’ includes the carrying, conveying or moving of passengers,
commodities, freight, mail, rolling stock, cars, vehicles, equipment or any other
property from one place to another.”
ORS 308.505(5) (2007).34 The defined term “transportation” appeared in six of the types of business
listed in ORS 308.515(1): “[r]ailroad transportation,” “[e]lectric rail and trackless trolley
transportation,” “[p]rivate railcar transportation,” “[a]ir transportation,” “[w]ater transportation upon
inland water of the State of Oregon,” and “[p]rivate railcars of all companies not otherwise listed in
this subsection, if the private railcars are rented, leased or used in railroad transportation for hire.”
ORS 308.515(1) (2007).
/ / /
34 As used in that definition, “car” “include[d] any vehicle adapted to the rails of a railroad” (ORS
308.505(1) (2007)), and “vehicle” “mean[t] any wheeled or tracked device used in transportation under, on or in
connection with the physical surface of the earth” (ORS 308.505(6) (2007)). The 2009 act did not change these
definitions materially; the definition of “car” was amended to add “railcar” as a synonym for “car,” and to change
“includes” to “means.” Or Laws 2009, ch 128, § 3. The central assessment statutes did not define other terms in the
definition of “transportation.”

ORDER ON CROSS-MOTIONS FOR PARTIAL
SUMMARY JUDGMENT TC 5409 (CONTROL) 	Page 33 of 57
As amended by the 2009 act, the definition of “transportation” provided:
“‘Transportation’ means carrying, conveying or moving passengers or property from one
place to another.”
Or Laws 2009, ch 129, § 3. The 2009 law did not change the list of businesses in ORS 308.515(1),
except to delete the reference to “trackless trolley” in paragraph (c).
Based on the definitions of “transportation” and their use in the pre- and post-amendment
versions of ORS 308.515(1), the court concludes that “transportation company property,” as used in
the 2009 findings, refers to property that companies use to carry, convey, or move passengers or
property from one place to another. These companies include, but are not necessarily limited to,
those carrying on the eight businesses listed in ORS 308.515(1)(a) – (g) and (n). In contrast to
“utility property,” the court has found nothing in the term “transportation company property” that
requires that transportation company businesses be subject to regulated rates, have exclusive service
districts or condemnation authority, or have other characteristics of a utility.35
c. 	“Similar business property that has inherent value due to the capacity of the
property to be operated as a network over a large geographic area”
The court turns to the third category of property in the 2009 findings: “similar business
property that has inherent value due to the capacity of the property to be operated as a network
over a large geographic area * * *.” Or Laws 2009, ch 128, § 1(1).36 The Department refers
frequently to the term “network” as the key determinant of inclusion in this third category.
(2/12/2021, Dept MPSJ at 8-12; 4/2/2021, Dept Reply at 3, 7-8; 6/25/2021, Dept Post-Arg Resp
Br at 3; 4/6/2022, Dept Resp to Court’s Questions at 4 n 1, 8-11.) The plain meaning
35 The court has found that certain railway construction companies, as well as those formed to construct
sewers, canals, ditches, or flumes, had condemnation and similar powers in some circumstances. See ORS 772.010
to 772.105 (2009).
36 The court assumes that “similar” refers to both of the two prior terms “utility property” and
“transportation company property.” See Jack L. Landau, Oregon Statutory Interpretation, 97 Or L Rev 583, 670-72
(2019) (discussing rule of last antecedent and other grammar-based rules of construction).

ORDER ON CROSS-MOTIONS FOR PARTIAL
SUMMARY JUDGMENT TC 5409 (CONTROL) 	Page 34 of 57
contemporaneous to 2009 included both physical networks of tangible property (e.g., networks
of fabric, highways, roots, computers connected by lines) and intangible networks consisting
only of incorporeal relationships (networks of alliances or friends) or ideas (a network of
beliefs). See Webster’s Third New Int’l Dictionary 1520 (unabridged ed 2002). 37 A “network”
of radio or television stations might be linked either tangibly “by wire” or by “radio relay.” Id.38
Contemporaneous Oregon statutes refer to intangible networks, such as a “provider network” for
medical insurance purposes (ORS 742.424)(1) (2009)). The court concludes that the 2009
findings do not limit the meaning of “network” to physical systems connected by tangible
personal property or real property, such as continuous lines of track, wire, or pipe. The
37 The full definition of “network” in Webster’s Third New International Dictionary is:
“1: a fabric or structure of threads, cords, or wires that cross each other at regular intervals and are knotted
or secured at the crossings<ribbons, lace and embroidery wrought together in a most curious piece
of [network] — Joseph Addison>
2: a system of lines or channels that interlace or cross like the fabric of a net<a [network] of
highways><a [network] of rivers><a [network] of veins><a [network] of roots><a [network] of nerves>
3a: an interconnected or interrelated chain, group, or system<a [network] of secret agents><a [network] of
alliances><a [network] of beliefs>
b: a system of computers, terminals, and data bases connected by communications lines
4: a system of electrical conductors in which conduction takes place between certain points by more than
one path
5a: a group of local radio or television stations linked by wire or radio relay for the usually simultaneous
broadcasting or televising of the same program
b: a radio or television company that produces programs to be relayed to local stations for broadcast by
radio or television<sold the show to a big [network]>
6: a usually informally interconnected group or association of persons (such as friends or professional
colleagues)<During my years of travel in Asia … I'd developed an extensive [network] of friends. —
Alison Wright, Yoga Journal, May/June 2005>”
Webster’s Third New International Dictionary 1520 (unabridged ed 2002).
38 The court notes that the 2021 legislature amended ORS 308.505 to exclude from the definition of a
centrally assessed “communication” business “the services of television and radio stations licensed by the Federal
Communications Commission that use primarily earth-based transmitters to broadcast programming via radio waves
to television or radio receivers that use indoor or outdoor antennas for reception * * *.” Or Laws 2021, ch 421, § 1
(HB 2331) (adding ORS 308.505(3)(b) (2021)). The staff measure summary accompanying the bill stated: “The
Department has not historically centrally assessed television and radio station property, but is likely to going
forward.” Staff Measure Summary, House Committee on Revenue, HB 2331, Apr 13, 2021, 1-2.

ORDER ON CROSS-MOTIONS FOR PARTIAL
SUMMARY JUDGMENT TC 5409 (CONTROL) 	Page 35 of 57
legislature used the term in a way that could equally encompass incorporeal networks of
contractual and other relationships.
The businesses listed in ORS 308.518(1) could have either or both kinds of networks.
Any of the six listed businesses involving “rail” necessarily relies on physical lines of track, but
railroad companies also have long relied on the ability to contract with each other to transport
goods over long distances. See Southern Pacific Trans. Co. v. Dept. of Rev., 302 Or 582, 585,
732 P2d 18 (1987) (describing continental rail transportation system as including “bridge”
railroads serving other carriers in specific areas). A utility might have both a tangible network of
transmission lines and distribution lines for the delivery of electricity, gas, or water, as well as an
intangible network of contracts to procure the commodity from others and franchises to sell
within a specified service territory. An air transportation, air or railway express, or water
transportation company might have a network consisting solely of intangible contract rights and
permissions that allow the business to move physically unconnected airplanes or vessels from
one point to another.39
The court finds that the third category in the 2009 findings, adopting the foregoing broad
definition of “network,” appears to encompass all of the businesses listed in ORS 308.515(1)
(with the possible exception of toll bridges).
d. 	“Other property that is appropriate for central assessment”
The fourth category of property in the 2009 findings is a catch-all that purports either to
ensure that property is considered part of the class even if it does not fit within the descriptions in
categories one through three, or to reserve a right in the legislature to expand the list in ORS
/ / /
39 The parties have not identified a network of either type used by a toll bridge. See ORS 308.515(1)(m).

ORDER ON CROSS-MOTIONS FOR PARTIAL
SUMMARY JUDGMENT TC 5409 (CONTROL) 	Page 36 of 57
308.515(1) to encompass additional categories of property. As such the fourth category adds
nothing to the analysis, and the court does not consider it further.
2. 	Parties’ arguments under 2009 findings
The court now seeks to apply the foregoing understanding of the 2009 findings to the
parties’ arguments in applying the “genuine differences” test under the Uniformity Clauses.
a. 	Omission of bus and trucking businesses from ORS 308.515(1)
According to Taxpayer, a principal example of a business not listed in ORS 308.515(1),
yet indistinguishable from those on the list, is bus and trucking companies. Taxpayer argues
that, not only does the property of these companies have “inherent value due to the capacity of
the property to be operated as a network over a large geographic area” (category three of the
2009 findings), but bus and trucking companies also “carry, convey, or move passengers or
property from one place to another” and thus fit squarely within the definition of “transportation”
in ORS 308.505(12) (category two). (3/2/2022, Delta Resp to Court’s Questions at 9-11;
3/3/2022, PacifiCorp Resp Br at 30-32.) The Department does not seriously dispute these
contentions. Rather, the Department responds that the legislature rationally could have excluded
bus and trucking company property from central assessment because the Oregon Constitution has
created a separate system of taxation that more specifically affects those businesses. The
Department points out:
• 	The constitution requires that “[a]ny tax or excise levied on the ownership, operation or
use of motor vehicles” is to be “used exclusively” for road construction, repair,
maintenance, operation and use, and certain related purposes. Furthermore, any such
taxes or excises imposed by the state must be generated in a manner that ensures that the
share of revenues paid for light vehicles and for heavy vehicles is “fair and proportionate
to the costs incurred for the highway system because of each class of vehicle.” Or Const,
Art IX, § 3a.
• 	Vehicles are required to be registered, and “the registration fees under the vehicle code
are in lieu of all other taxes and licenses, * * * to which such vehicles or the owners
thereof may be subject.” ORS 803.585. Exceptions include municipal license fees, ad

ORDER ON CROSS-MOTIONS FOR PARTIAL
SUMMARY JUDGMENT TC 5409 (CONTROL) 	Page 37 of 57
valorem tax on “fixed load” vehicles, and the motor vehicle privilege tax and its
complementary use tax imposed under ORS chapter 320. See id.
(See 4/6/2022, Dept Resp to Court’s Questions at 4-7.) The Department describes these
provisions as a “special system for raising revenues with respect to vehicles that use Oregon’s
roads.” (Id. at 4.) Excluding from central assessment the subset of transportation companies
“whose primary business consists in use of motor vehicles on public roadways” is, according to
the Department, “rationally related to the end the people and legislature have chosen as the
means to funding the public highway system in Oregon.” (Id. at 7.)
Restating the Department’s arguments in the two-part framework of Knapp, the court
understands the Department to argue that the imposition of vehicle registration fees in lieu of
property tax is a genuine difference that separates bus and trucking companies from other
businesses listed in ORS 308.515(1), including transportation companies defined in
ORS 308.505(12). From there, the Department posits that the dedication of funds to road
purposes in Article IX, section 3a (3), of the Oregon Constitution, expresses a policy goal, and
that the exclusion from central assessment (and along with it, the exclusion of tax on intangibles)
is reasonably related to that policy goal.
Taxpayer contends that the Department’s theory disintegrates on close examination. (See
5/4/2022, Delta Reply at 11.) The decision to exempt all vehicles from property tax, in order to
subject them to road-dedicated license fees pursuant to a constitutional requirement, may indeed
have a rational basis, but the decision at issue here, to exempt a bus or trucking company’s
intangible property, is separate. (Id. at 9.) In considering Taxpayer’s point, the court observes
that the Department does not argue that imposing ad valorem property tax on the intangible
property of bus and trucking companies would constitute a “tax or excise levied on the
ownership, operation or use of motor vehicles” that would trigger the dedication and

ORDER ON CROSS-MOTIONS FOR PARTIAL
SUMMARY JUDGMENT TC 5409 (CONTROL) 	Page 38 of 57
apportionment requirements under Article IX, section 3a, of the Oregon Constitution.40
Assuming that Article IX, section 3a does not so restrict the taxation of intangible property, then
the court finds the link the Department proffers between the exemption of vehicles and the
exemption of intangible property to be illusory. The Department’s reasoning would impute to
the legislature a rationale along the following lines: “We already exempt your vehicles from
property tax; therefore, we will exempt your intangible property also.” The court finds this a non
sequitur, particularly because the law provides no special exemption from property tax for real
property or other tangible personal property that a bus or trucking company might use (truck
yards, garages, maintenance facilities, office or dispatch facilities and equipment). Recognizing
that nearly any logical connection between the two exemptions would suffice under a rational
basis analysis, the court nevertheless cannot conceive of one here. The business of operating a
bus or trucking company is squarely within the definition of “transportation” under ORS
308.505(12), and is otherwise so similar to the listed businesses in its reliance on a network that
the court finds no “genuine difference” in use.
b. 	Omission of other businesses from ORS 308.515(1): “genuine differences”
Taxpayer cites other examples of businesses not listed in ORS 308.515(1) that operate
property as a network over a large geographic area, such as “distribution companies, retail
companies, [and] restaurant chains.” (5/4/2022, Delta Reply; see also 5/4/2022, PacifiCorp Reply at
3 n 2 (listing “retail distribution companies, transportation companies, hotels, restaurants,
40 The logic of such a hypothetical position by the Department--essentially asking the court to look through
the intangibles to the vehicles that give rise to them--arguably would preclude subjecting a bus or trucking company
to other taxes without dedicating the revenues to roads, such as taxes on net income or the corporate activity tax.
See ORS chs 317, 317A (providing no exemption for bus or trucking companies). The Oregon Supreme Court has
rejected that logic. See AAA Oregon/Idaho Auto Source v. Dept. of Rev., 363 Or 411, 421, 423 P3d 71 (2018) (“[A]s
used in Article IX, section 3a, taxes ‘on’ the ownership of a motor vehicle are limited to those based on the fact of
ownership itself—that is, ownership qua ownership—and they do not include taxes based on all actions that an
owner might take, such as selling or buying.”); id. at 424 (stating legislative history of Article IX, section 3a “does
not indicate” that the provision applies to all taxes (for example, any business, license, regulatory, income or
property tax) imposed on a status or activity involving motor vehicles).

ORDER ON CROSS-MOTIONS FOR PARTIAL
SUMMARY JUDGMENT TC 5409 (CONTROL) 	Page 39 of 57
franchises”); see Argument of David Crapo, Oral Argument, Jan 18, 2022 at 2:33.) A multistate
retail chain, for example, may have centralized purchasing arrangements with manufacturers and
food processors, operate its own regional warehouses and distribution centers, and use branded trucks
to stock branded retail stores, all of which depends on centralized inventory control and nationwide
advertising and marketing. Multistate restaurant chains may have similar facilities and arrangements
for the procurement and movement of food and supplies and, in addition, operate under franchise
arrangements with substantial intangible value. Manufacturers of consumer goods may operate their
own retail stores in multiple states, in which the same intangible brand is associated with both the
real property and the tangible personal property being sold. Service businesses such as banks can
operate property as a network over a large geographic area as well, due, in some cases, to
deregulation that has occurred since the list in ORS 308.515(1) was created. (See 5/4/2022, Delta
Reply at 15 (banks).) See, e.g., Pub L 103-328, §109, 108 Stat 2338 (1994) (allowing bank branches
across state lines).41 As a result, Taxpayer argues, many household-name companies, including
many with distribution networks or other kinds of networks, derive more than 85 percent of their
enterprise value from intangible assets. (See 5/4/2022, PacifiCorp Reply at 18 n 16 (citing B RAND
F INANCE , 2020 G LOBAL INTANGIBLE FINANCE TRACKER 36-37 (2020) (table).
In its final briefing, the Department responds by distinguishing the listed businesses as
“hav[ing] value only from operations over some geographical area, typically large
and under some type of public franchise or ‘certificate of convenience and
necessity.’ (Railroads, airlines, electricity generation and transmission,
communication, gas and oil transmission). * * * These businesses could not exist
or operate if confined to a single location.”
41 Other service businesses readily come to mind, including professional service entities, but also hospital
systems and others with large investments in real property and equipment. See Or Laws 1987, ch 94, § 174
(repealing former ORS 58.235, which provided, “No professional corporation organized under any law other than
the law of this state shall transact business in this state.”); Patrick P. T. Jeurissen, et al., For-Profit Hospitals Have
Thrived Because of Generous Public Reimbursement Schemes, Not Greater Efficiency: A Multi-Country Case Study,
51(1) Int’l J of Health Services 67, 72 (2021) (describing growth of investor-owned hospital chains in United
States); Steven Findlay, Can a Community Hospital Stick to Its Mission When It Goes For-Profit?, NPR (Jul 19,
2018, 9:26 AM), https://www.npr.org/sections/health-shots/2018/07/19/629675648/can-a-community-hospital-stick-
to-its-mission-when-it-goes-for-profit (discussing for-profit and nonprofit hospital ownership and trends).

ORDER ON CROSS-MOTIONS FOR PARTIAL
SUMMARY JUDGMENT TC 5409 (CONTROL) 	Page 40 of 57
(5/18/2022, Dept Surreply at 2 (emphasis added); see also 4/6/2022, Dept Resp to Court’s
Questions at 11 (“[O]il pipelines, transportation properties, or communication networks * * *
must be used as parts of systems or networks * * *.”) (emphasis added); id. at 9 (describing
property used in a listed business is “inherently operated as part of a system or network or
incidental thereto” ) (emphasis added)).
By contrast, the Department describes locally assessed property as
“hav[ing] value from operations in a physical location, typically involving
manufacture and sales of tangible personal property or services delivered at a
particular location. (e.g., hotels, shoe manufacturing and sales, technical software
and hardware manufacturing and sales, banking, ‘big-box’ sale of goods,
restaurants). * * * Although businesses with locally assessed property may own
property in many locations, the business can be conducted from each location,
e.g., Walgreens.”
( 5/18/2022, Dept Surreply at 2-3; see also 4/6/2022, Dept Resp Court’s Questions at 10
(providing example of locally assessed property that is a “newly built standalone commercial
building that may be sold to all comers and used without reference to any particular type of
business operation”) .)
Applying Knapp, the court restates the Department’s theory as follows:
(1) Property used in a business listed in ORS 308.515(1) has the “genuine difference”
that it has value only if it is used in a system or network over a (typically large)
geographic area. By contrast, property used for a purpose not listed in ORS
308.515(1) has value even if it is not used in a system or network over a (typically
large) geographic area.
(2) A conceivable policy purpose exists that the legislature reasonably could believe
is furthered by taxing intangible property only if used in a business whose
property has value only if used in a system or network over a (typically large)
geographic area.
The Department’s asserted “genuine difference” has some initial, intuitive appeal. The
Department’s example of an oil and gas pipeline calls up an image of sections of pipe that have
no obvious purpose unless connected together and joined to a source of supply at one end and

ORDER ON CROSS-MOTIONS FOR PARTIAL
SUMMARY JUDGMENT TC 5409 (CONTROL) 	Page 41 of 57
some distribution system at the other end, coupled with other equipment along the way to ensure
pressure and safety. Other examples might include individual railroad ties, lengths of rail, and
communication poles and towers. All are specialized pieces of equipment designed for a
particular function within a larger whole. However, the court rejects as hyperbolic the
Department’s literal assertion that these individual components of a system have “value only”
from operations over a large geographic area, or that they “must” be used in that manner. Even the
early cases that establish the principle that the value of a functioning unit may exceed the value of the
sum of its component parts do not rely on a notion that individual parts lack all standalone value.
See Adams Express, 165 US at 222-23 (“Considered as distinct subjects of taxation, a horse is,
indeed, a horse; a wagon, a wagon; a safe, a safe; a pouch, a pouch. But how is it that $23,430 worth
of horses, wagons, safes, and pouches produces $275,446 in a single year? * * * The answer is
obvious.”); Henderson Bridge Co. v. Kentucky, 166 US 150, 158, 17 S Ct 532, 41 L Ed 953 (1897)
(“The bridge company was assessed by the local county officials on the bridge and other tangible
property the sum of [$649,735.54]. The board of valuation assessed the company for the franchise
tax, under the laws above stated in the sum of [$865,157.46].”). The question of value must be one
of degree; a different conclusion would ignore the “rational” part of the rational basis test.42 See,
e.g., FCC v. Beach Communications, Inc., 508 US 307, 315, 113 S Ct 2096, 124 L Ed 2d 211 (1993)
(“[A] legislative choice is not subject to courtroom factfinding and may be based on rational
speculation unsupported by evidence or empirical data.”) (emphasis added); Vance v. Bradley, 440
US 93, 111, 99 S Ct 939, 59 L Ed 2d 171 (1979) (“[T]hose challenging the legislative judgment must
convince the court that the legislative facts on which the classification is apparently based could not
42 Another question of degree in the Department’s argument is the reference to a “large” geographic area.
Delta and PacifiCorp point out that rail lines, power plants, and other property used in the listed businesses may
serve small territories. (5/4/2022, Delta’s Reply to Court’s Questions at 15.) The legislature’s original requirement
that “property,” to be centrally assessed, must cross state or county lines was removed in 1913. Or Laws 1913, ch
193, § 4.

ORDER ON CROSS-MOTIONS FOR PARTIAL
SUMMARY JUDGMENT TC 5409 (CONTROL) 	Page 42 of 57
reasonably be conceived to be true by the governmental decisionmaker.”) (emphasis added). And if
the court interprets the Department’s argument to mean that property used in a business listed in
ORS 308.515(1) has more value when operated as part of a network over a large geographic area
than when used otherwise, the argument becomes a truism. Under the logic of Adams Express, even
ordinary, fungible items can generate intangibles and enhanced value when used as part of a network.
See 165 US at 222-23 (horses, wagons, safes, pouches). The court rejects the first part of the
Department’s “genuine differences” argument.
The court also is skeptical as to the second part of the Department’s genuine differences
argument, that property used in a business not listed in ORS 308.515(1) has just as much value
even if not used in a network. The court readily pictures a vertically integrated, high-technology
manufacturing business that sends its products around the world to various facilities at different
stages of production, sourcing materials in one place, forging or milling them in another,
fabricating components elsewhere, and performing assembly, finishing, and testing in still other
locations.43 A particular facility in Oregon might be built to perform one stage of the process,
containing highly specialized equipment that is designed for that particular stage and that
particular product. The total property used worldwide, under the control of one company, may
have a unit value greater than the sum of the facilities and equipment in each location when
valued on a standalone basis. And the facility in Oregon may have very little value unless used
as part of the manufacturer’s network.
The court also can easily imagine that some big-box store buildings may likewise have
substantially greater value when used in a system or network over a (typically large) geographic
43 The manufacturer may own some of the facilities outright and “use” other facilities owned by
independent businesses, within the meaning of “use” for central assessment purposes. See ORS 308.515(1) (stating
test for central assessment includes use, not ownership); Pacificorp Power Marketing, 340 Or at 206-08, 220
(upholding central assessment of electricity business taxed on power plant owned by city and subject to various
contract rights for the benefit of taxpayer).

ORDER ON CROSS-MOTIONS FOR PARTIAL
SUMMARY JUDGMENT TC 5409 (CONTROL) 	Page 43 of 57
area. A single building might be easy to rebrand for use by a different chain, and thus have a
standalone value that can be determined by reference to comparable sales; however, the
building’s size or other features may be designed to turn over a high volume of inventory that
only the branding of some national or large regional chain with “networked” distribution can
support. This, too, is a question of degree, but at some point it may be just as accurate to
describe such a building as having value “only” when operated as part of a network over a large
geographic area as to say the same about gas pipes and power lines. See generally, e.g., Powell
Street I v. Multnomah County Assessor, 365 Or 245, 253-54, 445 P3d 297 (2019) (describing
$4.71 million in improvement costs necessary to fill “anchor tenant” space in shopping center, in
addition to ancillary upgrade costs triggered by those improvements).
c. 	Omission of other businesses from ORS 308.515(1): “line-drawing problems”
The Department seems to acknowledge the possibility that property used in businesses
not listed in ORS 308.515(1) can be “strongly integrated,” but the Department quickly dismisses
that point as a “line-drawing problem.” (4/6/2022, Dept Resp to Court’s Questions at 9 n 4)
(“This is not to say that the legislature could not reasonably have classified for central
assessment other types of businesses whose property is used as part of a strongly integrated
enterprise. But that is fundamentally a line-drawing problem for the legislative branch * * *.”).)
Line-drawing cases, whether under the Oregon Uniformity Clauses or under the Equal
Protection Clause, involve some difference--sometimes quite small--between the items on either
side of the line. See, e.g. Standard Lbr. Co., 112 Or at 336 (allowing graduated income tax rates
based on tiers or brackets with specified dollar cutoffs); Huckaba, 281 Or at 30-31 (upholding
minimum age of 65 for tax benefit for civil service pensions for military veterans). And under
the highly deferential rational basis standard, a line is not irrational merely because some

ORDER ON CROSS-MOTIONS FOR PARTIAL
SUMMARY JUDGMENT TC 5409 (CONTROL) 	Page 44 of 57
subjects fall “just short of qualifying” as members of the favored or disfavored class.44 Mathews
v. Diaz, 426 US 67, 83, 96 S Ct 1883, 48 L Ed 2d 478 (1976).45
Nevertheless, courts require some difference between subjects on one side of the line and
the other. In Mathews, for example, the Court was able to conclude that Congress intended to
favor a class consisting of “citizens and those who are most like citizens,” implying that those
outside the class were different because they were less like citizens. 426 US at 83 (emphasis
added). To carry out that intent, Congress drew a line that excluded some who had an “almost
equally strong claim to favored treatment.” Id. (emphasis added); see also U.S. Railroad
Retirement Bd. v. Fritz, 449 US 166, 178, 101 S Ct 453, 66 L Ed 2d 368 (1980) (upholding law
phasing out “windfall” retirement benefits based on, among other things, specific number of
years served and other criteria designed to favor those with a “greater equitable claim”);
Carmichael 301 US at 510 (“It is argued here * * * that there can be no reason for a distinction,
for purposes of taxation, between those who have only seven employees and those who have
eight. Yet, this is the type of distinction which the law is often called upon to make.”).
In this case, the legislature has exercised its prerogative to draw the classification line by
means of a list rather than by specifying criteria. It thus falls to the court to infer the criteria
from the list, a task for which the court has sought the parties’ help. (11/8/2021, Ct Ltr at 3-5.)
/ / /
/ / /
44 See, e.g., Metropolis Theatre Co. v. Chicago, 228 US 61, 69-70, 33 S Ct 441, 57 L Ed 730 (1913)
(upholding city tax on theaters of $1,000 per year if price charged for any one ticket during the year exceeded $1).
45 Mathews involved immigration law, an area that, like taxation, requires the most deferential application
of the rational basis test. 426 US at 81-82 (“The reasons that preclude judicial review of political questions also
dictate a narrow standard of review of decisions made by the Congress or the President in the area of immigration
and naturalization.”) (footnote omitted); cf Nordlinger v. Hahn, 505 US 1, 11, 112 S Ct 2326, 120 L Ed 2d 1(1992)
(“[The rational basis] standard is especially deferential in the context of classifications made by complex tax laws.”).

ORDER ON CROSS-MOTIONS FOR PARTIAL
SUMMARY JUDGMENT TC 5409 (CONTROL) 	Page 45 of 57
After much diligent effort by all counsel involved, the court concludes that the final version of
the line proffered by the Department reveals businesses on both sides of the line that fit the
criteria equally and thus have no “genuine difference.”
G. 	Other Arguments
The Department argued early on in briefing that a difference between centrally assessed
companies and locally assessed companies was that “many” centrally assessed companies are
publicly traded stock companies while “most” locally assessed properties are not. (2/12/2021,
Dept MPSJ at 11-12.) The Department did not pursue this argument further and the court rejects
it without further discussion.
H. 	“Transportation Company Property” and “Utility Property” as Separate Subclasses
Based on the parties’ arguments, the court has concluded above that the third category in
the 2009 findings does not identify a set of “genuine differences” that unifies all businesses listed
in ORS 308.515(1) and distinguishes them from other businesses that have a “network” of
property. Nor do the parties present other reasonably conceivable theories that distinguish the
list of businesses as a group from other businesses. The court must consider the possibility that
the list in ORS 308.515(1) does not describe a single class, but rather, more than one class, each
class based on a different set of classification criteria and perhaps serving a different legislative
purpose. Cf. Jarvill, 289 Or at 180 (“[I]f a subterritory is different in quality compared to the
rest of the territory, then article I, section 32, does not prohibit a taxing authority from defining
the subterritory as a separate class.”).
With this in mind, the court returns to the first and second categories in the 2009 findings.
The second, “transportation company property,” already has been addressed. The court has
concluded above that no genuine differences distinguish the rail, air, and water transportation
businesses on the list in ORS 308.515(1) from road transportation businesses, which are omitted

ORDER ON CROSS-MOTIONS FOR PARTIAL
SUMMARY JUDGMENT TC 5409 (CONTROL) 	Page 46 of 57
from the list. The taxation of intangible property used in the businesses listed in
ORS 308.515(1)(a)-(g) and (n) and the exemption of other, materially identical, transportation
company property violates the Uniformity Clauses.
By contrast, as to the first category, “utility property,” the court readily finds genuine
differences between property used in a rate-regulated business and property used otherwise. In
the former, the property is “vested with public interest” because it is used in providing a
“necessary public service.” This difference in use is analogous to the difference between use of
hospital property for a charitable purpose, which can support a claim for exemption from tax, as
opposed to a private purpose, which does not. See NW Medical Lab. v. Good Samaritan
Hospital, 309 Or 262, 786 P2d 718 (1990) (addressing procedural issues in case brought by
taxable medical laboratory against tax-exempt hospitals allegedly performing same functions).
Under the Uniformity Clauses, the court considers this difference a “politically imposed” or
“economic” difference in use that exists independently of the taxation regime. See Jarvill, 289
Or at 180. The United States Supreme Court has recognized the difference in use of utility
property as a valid ground of distinction for Equal Protection Clause purposes. See Nashville, C.
& St. L. Ry. v. Browning, 310 US 362, 368, 60 S Ct 968, 84 L Ed 1254 (1940) ( “[A state] may
treat railroads and other utilities with that separateness which their distinctive characteristics and
functions in society make appropriate * * *.”).
The court considers the second part of the test articulated in Knapp: whether the
classification of intangible property used in a “utility” business as taxable is reasonably related to
a conceivable legislative purpose. One conceivable purpose is to enhance the existing regulatory
regime by redistributing for public purposes a portion of any value that might build up over time
in goodwill or other intangible property as the utility charges regulated fees to customers and

ORDER ON CROSS-MOTIONS FOR PARTIAL
SUMMARY JUDGMENT TC 5409 (CONTROL) 	Page 47 of 57
delivers a regulated return to investor-owners. In the trial in PacifiCorp’s case, the Department
presented evidence purporting to show that the price paid for utilities historically has exceeded
the “book” value of utility property as determined for regulatory purposes. See PacifiCorp v.
Dept. of Rev., ___ OTR ___ (July 17, 2023) (slip op at 33-35; 73) (discussing the Department’s
“market-to-book ratio” studies). As explained in the opinion, for valuation purposes the court
rejected the Department’s evidence based on evidentiary and other reasons, and the court here
neither validates nor invalidates the studies, including their methodologies and their results.
However, under a rational basis analysis, the court cannot reject the concept that the legislature
might wish to impose ad valorem property tax on a utility’s intangibles as a kind of check against
the potential buildup of such value. See Beach Communications, Inc., 508 US at 315, (“[A]
legislative choice is not subject to courtroom fact-finding and may be based on rational
speculation unsupported by evidence or empirical data.”). Presuming, as it must, the existence of
such a conceivable purpose, the court concludes that a subset of businesses listed in ORS
308.515(1), consisting of “public utilities,” is a constitutionally valid class, and that intangible
property used or held for future use in those businesses reasonably may be singled out for
taxation. See ORS 174.040 (stating that statutes are generally severable).
VI. 	CONCLUSION
Based on the foregoing, the court concludes that the list of businesses in ORS 308.515(1)
violates the Uniformity Clauses and the federal Equal Protection Clause as to Delta, because the
court finds no genuine differences between Delta’s (taxable) use of intangible property in its
transportation business and the (exempt) use of intangible property in road transportation
businesses or in other businesses that rely on a network of property. However, the court
concludes that the list in ORS 308.515(1) does not violate the Uniformity Clauses as to

PacifiCorp, 	because 	the 	coult 	finds 	genuine 	differences 	between 	PacifiCorp's 	(taxable) 	use 	of
intangible 	property 	in 	its business 	as 	a 	regulated 	public 	utility 	and 	(exempt) 	uses 	of intangible
property 	in 	non-regulated 	businesses, 	and 	because 	the 	court 	further 	concludes 	that 	the 	legislature
could 	have 	determined 	that 	taxing 	the 	value 	of intangible 	property 	of a 	utility 	complements 	the
regulatory 	scheme 	by 	redistributing 	for 	public 	purposes 	some 	value 	that 	accrues 	through
regulated 	operation 	and 	that 	otherwise 	would 	inure 	to 	investor-owners. 	The 	court 	will 	grant
Delta's 	Motion 	for 	Partial 	Summary 	Judgment 	and 	deny 	the 	Department's 	Cross-Motion 	for
Partial 	Summary 	Judgment. 	By 	separate 	order, 	the 	court 	will 	deny 	PacifiCorp's 	Motion 	for
Partial 	Summary 	Judgment 	and 	grant 	the 	Department's 	Cross-Motion 	for 	Partial 	Summary
Judgment, 	with 	respect 	to 	PacifiCorp's 	second 	claim 	for 	relief as 	pled 	in 	its 	Amended 	Complaint.
Now, 	therefore,
IT 	IS 	ORDERED 	that 	Delta's 	Motion 	for 	Partial 	Summary 	Judgment 	is 	granted; 	and
IT 	IS 	FURTHER 	ORDERED 	that 	the 	Department's 	Cross-Motion 	for 	Partial 	Summary
Judgment 	is 	denied.
Dated 	this 	23rd 	day 	of August, 	2023.
8/23/2023 	10:05:37 AM
a 	.
Judgo 	Robert 	T. 	Manlcke
ORDER 	0N 	CROSS-MOTIONS 	FOR 	PARTIAL
SUMMARY 	JUDGMENT 	Tc 	5409 	(CONTROL) 	Page 	48 	of 57

Appendix —
Comparative 	Timeline 	and 	List 	of 	Law 	Changes
The 	timeline 	below 	shows 	relevant 	developments 	in 	the 	statutes 	governing 	the 	taxation 	of
intangibles 	and 	central 	assessment, 	as 	well 	as 	the 	original 	and 	amended 	text 	of Oregon's
Uniformity 	Clauses.
47 The 	Codes 	and 	Statutes 	of Oregon, 	title 	XXX, 	ch 	I, 	§§ 	3037, 3038, 	3057 	(Bellinger 	& 	Cotton 	I901).
48 Report 	of the 	Board 	of Commissioners 	Appointed 	Under 	the 	Provisions 	of Chapter 	90, 	Laws 	of 	I905,
for 	the 	Purpose 	of Examining 	and 	Reporting 	on 	Matters 	of Assessment 	and 	Taxation, 	etc., 	I7 	(Jun 	30, 	I905),
available 	at 	https://archive.org/details/reportboardcommOOmu1kgoog/page/n5 	(accessed 	Jan 	11, 	2023).
49 	Or 	Laws 	I907, 	ch 	268, 	§ 	2; 	see 	also 	id. 	§ 	3 	(amending 	definition 	of "personal 	property").
50 	Or 	Laws 	1909, 	ch 	218, 	§ 	5; 	see 	also 	id. 	§ 	9 	(adding 	to 	valuation 	provision 	that 	"said 	franchises 	and
special franchises 	[are] 	not 	to 	be 	directly 	assessed, 	but 	to 	be 	taken 	into 	consideration 	in 	determining 	the 	value 	of the
other 	property").
ORDER 	ON 	CROSS-MOTIONS 	FOR 	PARTIAL
SUMMARY 	JUDGMENT 	TC 	5409 	(CONTROL) 	Page 	49 	of 57
Date 	Taxation 	Of 	Intangibles 	Central 	Assessment 	Uniformity 	Clauses
Before 	Property 	subject 	to 	taxation 	is 	None; 	all 	property 	assessed 	by
1906 	"all 	property, 	real 	and 	personal, 	local 	county 	assessors 	Constitution 	of 	1859
Within 	this 	state, 	not 	expressly
exempted" 	1906 	report 	includes 	draft 	bills 	and 	Art1,§32
recommendations 	to 	establish 	"No 	tax 	or 	duty 	shall
central 	assessment	"personal 	property" 	1ncludes 	be 	imposed 	Without
certain 	debts, 	stocks 	and 	capital 	the 	consent 	of the
people, 	or 	their
"real 	property" 	includes 	"r1ghts 	representatives 	in 	the
and 	privileges" 	appertaining 	to 	legislative 	assembly;
land 	and 	improvements" 	and 	all 	taxation 	shall
be 	equal 	and
1906 	report: 	"the 	assessment 	of 	uniform."
intangible 	property 	in 	the 	State
of Oregon 	has 	not 	been 	and 	is 	Art 	1x, 	§ 	1
not 	now 	the 	rule. 	Attempts 	to 	"The 	Legislative
assess 	such 	property 	have 	been 	Assembly 	shall
very 	rare 	and 	confined 	to 	a 	few 	provide 	by 	law, 	for 	a
isolated 	assessments"48 uniform, 	and 	equal
rate 	0f assessment	1907- 	1907 	act 	adds 	to 	"real 	property" 	1909 	act 	establishes 	central
1913 	"all 	franchises 	and 	privileges" 	assessment 	by 	department's 	and 	taxation, 	and
shall 	prescribe 	such	granted 	by 	Oregon 	or 	locality 	predecessor
"other 	than the 	right 	to 	be 	a 	regulations 	as 	shall
corporation"49 	1909 	act 	defines 	"property" 	for 	secure 	a 	just
valuation 	for 	taxation	central 	assessment purposes 	as
including 	"all 	property, 	real 	and 	of all 	property, 	both
personal, * * 	* 	and 	all 	franchises 	real, 	and 	personal,
"50	and 	special 	franchises 	excepting 	such 	only

51 	Or 	Laws 	1913, 	ch 	193, 	§ 	5 	(adding 	italicized 	phrase).
52 	0r 	Laws 	1913, 	ch 	193, 	§ 	4 	(removing 	phrase).
53 	Or 	Const, 	Art 	1, 	§ 	32 	(showing 	deletions 	and 	insertions 	with 	strikethrough 	and 	italics, respectively)
55 	0r 	Laws 	1927, 	ch 	317
56 	Or 	Laws 	1929 	chs 	427 	(creating 	corporation 	excise 	tax—on 	net 	income, 	including 	from 	intangibles;
excluding 	corporations 	whose 	property 	is 	centrally 	assessed), 	448 	(creating 	personal 	income 	tax—on 	net 	income;
excluding 	gross 	income 	taxed 	under 	ch 	429); 	429 	(taxing 	individuals 	on 	gross 	interest 	and 	dividends); 	see 	Redfield
et 	al. 	v. 	Fishel' 	et 	£11., 	135 	Or 	180, 	292 	P 	813 	(1931) 	(invalidating 	Or 	Laws 	1929, ch 	429).
ORDER 	0N 	CROSS-MorloNs 	FOR 	PART1AL
SUMMARY 	JUDGMENT 	Tc 	5409 	(CONTROL) 	Page 	50 	of 57
for 	municipal,
1913 	act 	amends 	definition 	of 	educational, 	literary,
"property" 	for 	central 	assessment 	scientific, 	religious,
or 	charitable	purposes; 	now 	includes 	"all
property, 	real 	and 	personal, 	purposes, 	as 	may 	be
tangible 	and 	intangible"51 specially 	exempted
by 	law."
1913 	act 	removed 	the 	requirement
that 	centrally 	assessed 	property
"be doing 	business 	as 	one 	system,
partly 	within 	this 	state 	and 	partly
without, 	or 	so 	doing 	business 	in
more than 	one 	county 	of the
state."52
1917
1929- 	1927 	act 	exempts 	stock 	and 	As 	amended 	in 	1917
1931 	bonds 	issued 	by 	corporations
other 	than 	banks from property 	Artl, 	§ 	32
tax" 	"no 	tax 	or 	duty 	shall
be 	imposed 	without
the 	consent 	of the	1929 	acts 	adopt 	personal 	and
corporate 	net 	income 	taxes, 	plus 	people 	or 	their
separate 	tax 	on 	gross 	income 	representatives 	in 	the
from 	intangibles 	later 	declared 	legislative 	assembly;
unconstitutional" 	and 	all 	taxation 	shall
be 	equal—and 	uniform
on the 	same 	class 	0f	1931 	act 	imposes 	new 	tax 	on 	1931 	act 	exempts 	centrally
income from 	intangible 	personal 	assessed 	corporations, 	but 	not 	subjects 	within 	the
property 	"1n 	lieu 	of the 	archaic 	other 	business 	corporations, 	from 	territorial 	limits 	0f
and 	impracticable 	ad 	valorem 	tax 	tax 	on 	income from 	intangible 	the 	authoritjz 	levying
on 	the 	property 	itself"; 	defines 	property" 	the tax. "53
"mtangibles" 	as 	evidences 	of

58 	Or 	Laws 	1931, 	ch 	335, 	§§ 	2.2, 	2.10, 	12(b); 	see 	Or 	Laws 	1927, 	ch 	427, 	§ 	11(k) 	(exempting 	centrally
assessed 	companies); 	Oregon 	Laws, 	Title 	XXIX, 	ch 	l, 	§ 	4187 	(15) 	(1920) 	(defining 	centrally 	assessed 	companies).
57 	Or 	Laws 	1931, 	ch 	335, 	§ 	2 	(defining 	"intangibles"). 	Measured 	by 	"net 	income," 	which 	is 	defined 	as 	net
of deductions 	for 	interest 	and 	other 	specified 	items. 	Id. 	§§ 	3, 	10.
54 	Or 	Const, 	Art 	1X, 	§ 	l 	(strikethrough 	and 	italics 	showing 	deletions 	and 	insertions).
59 	Or 	Laws 	193 5, 	ch 	274, 	§ 	l 	(showing 	deletions 	and 	insertions 	with 	strikethrough 	and 	italics,
respectively).
60 	See 	Oregon 	Code, 	title 	LXIX, 	ch 	1V, 	§ 	69-406 	(1930) 	(defining 	"property" 	to 	be 	centrally 	assessed
unchanged).
6' 	0r 	Laws 	1935, 	ch 	54, 	§ 	1 	(Spec 	Sess).
62 	0r 	Laws 	1977, 	ch 	602, 	§ 	1 	(amending 	0Rs 	307.020).
ORDER 	0N 	CROSS-MOTIONS 	FOR 	PARTIAL
SUMMARY 	JUDGMENT 	Tc 	5409 	(CONTROL) 	Page 	51 	of 57
indebtedness 	and 	shares 	of 	Art 	1x, 	§ 	1
stock" 	"The 	Legislative
1935 	1935 	act 	redefines 	property 	1935 	act 	leaves unchanged 	the 	Assembly 	shall, 	and
subject 	to 	taxation 	as 	all 	"real 	definition 	of "property" 	subject 	to 	the people 	through
property" 	and 	"tangible 	personal 	central 	assessment 	("all 	property, 	the 	initiative 	may,
property" 	Within 	Oregon 	"except 	real 	and 	personal, 	tangible 	and 	provide 	by 	law 	£or—a
uniform	as 	may 	otherwise 	be 	specifically 	intangible")60
exempted provided 	by 	law"59 	rate 	rules 	of
1935 	act 	adds 	"aircraft 	companies,9 assessment 	and
to 	list 	of centrally 	assessed 	taxation,
companies"
1977 	1977 	act 	adds 	subsection 	to 	definitions 	of "1ntangible 	personal
property" 	and 	"tangible 	personal 	property," 	declaring 	those 	definitions
inapplicable 	to 	centrally 	assessed 	taxpayers 62
1993 	1993 	act 	adds 	subsection 	to 	local 	assessment 	statute, 	declaring 	"except
as 	provided 	in 	[central 	assessment 	statutes], 	intangible 	personal
"63
property 	is 	not 	subject 	to 	assessment 	and 	taxation.
1997 	Failed 	HB 	2062 	would 	have 	exempted 	intangible 	property 	for
centrally 	assessed 	taxpayers."
1999 	Vetoed 	HB 	2050 	would 	have 	exempted 	intangible 	property 	for
centrally 	assessed 	taxpayers."
2009 	2009 	act 	includes 	"housekeeping"
amendments 	to 	central 	assessment
statutes, 	with 	preamble 	containing 	byLl-aw. 	All 	taxes
Shall 	be 	levied 	andfindings 	referring 	to 	"capacity 	of collected 	under[centrally 	assessed] 	property 	to 	be
operated 	as 	a 	network 	over 	a 	large 	general 	laws
"66 	operating 	uniformly	geographic 	area
2015 	2015 	act 	generally 	exempts 	the 	throughout 	the
State."54

The 	following 	paragraphs 	note 	additional 	developments 	not 	covered 	in 	the 	comparative
timeline. 	In 	1939, 	"pipe 	line 	companies, 	toll 	bridge 	companies, 	heating 	companies * 	* 	*
people's 	utility 	districts" 	were 	added 	to 	the 	list.69 	1n 	1949, 	"water 	transportation 	companies
engaged 	in 	the 	business 	of transporting 	freight 	or 	passengers 	for 	hire 	upon 	the 	rivers 	in 	or
adjoining 	the 	state 	of Oregon" 	were 	added." 	In 	1951, 	the 	legislature 	added 	a 	statement 	before
63 	Or 	Laws 	1993, 	ch 	353, 	§ 	l 	(amending 	ORS 	307.030). 	1n 	addition 	to 	the 	central 	assessment 	statutes, 	the
amendment 	also excepted 	the 	statutes 	governing 	a 	gross receipts 	tax 	on 	certain 	rural 	telephone 	exchanges.
64 	HB 	2062 	(1997).
65 	HB 	2050 	(1999) 	(vetoed).
66 	0r 	Laws 	2009, 	ch 	128, 	§ 	1.
67 	Or 	Laws 	2015, 	ch 	23, 	§ 	3 	(codified 	as 	ORS 	307.674).
68 	Or 	Laws 	2021, 	ch 	421, 	§ 	1.
69 	The 	full 	text 	of the 	law 	as 	amended 	in 	1939 	was:
"To 	make 	an 	annual 	assessment, 	upon 	an 	assessment 	roll 	to 	be 	prepared 	by 	said
commission, 	of the 	property 	having 	a 	situs 	in 	this 	state, 	as 	hereinafier 	defined, 	of all 	railroad
companies, 	sleeping 	car 	companies, 	union 	station 	and 	depot 	companies, 	electric 	and 	street 	railway
companies, 	express 	companies, 	telegraph 	companies, 	telephone 	companies, 	refrigerator 	car
companies, 	tank 	line 	companies, 	private 	car 	companies, pipe 	line 	companies, 	toll 	bridge
companies, 	heating 	companies, 	water, 	gas 	and 	electric 	companies, 	people's 	utility 	districts 	and
aircrafi 	companies 	engaged 	in 	air 	transport 	of passengers, 	freight, 	express 	or 	mail."
Or 	Laws 	1939, 	ch 	343, 	§ 	1.
7O 	The 	fiill 	text 	of the 	law 	as 	amended 	in 	1949 	was:
"To 	make 	an 	annual 	assessment, 	upon 	an 	assessment 	roll 	to 	be 	prepared 	by 	said
commission, 	of the 	property 	having 	a 	situs in 	this 	state, 	as 	hereinafter 	defined, 	of all 	railroad
companies, 	sleeping 	car 	companies, 	union 	station 	and 	depot 	companies, 	electric 	and 	street 	railway
companies, 	express 	companies, 	telegraph 	companies, 	telephone 	companies, 	refrigerator 	car
ORDER 	0N 	CROSS-MOTIONS 	FOR 	PARTIAL
SUMMARY 	JUDGMENT 	Tc 	5409 	(CONTROL) 	Page 	52 	of 57
portion 	of the 	real 	market 	value 	of
a 	centrally 	assessed 	property 	that
exceeds 	130% 	of cost 	of real 	and
tangible 	personal 	property"
2021 	2021 	act 	excludes 	television 	and
radio 	stations 	that 	primarily 	use
earth-based 	transmitters 	to
broadcast 	programming 	from 	the
definition 	of "communication" 	for
central 	assessment 	purposes"

the 	list 	that 	the 	tax 	applied 	to 	the 	property 	used 	in 	those 	businesses 	"Whether 	in 	domestic 	or
interstate 	commerce 	or 	both." 	Or 	Laws 	1951, 	ch 	586, 	§ 	2. 	The 	revisions 	also 	rearranged 	the 	list
and 	added 	an 	exception 	for 	property 	of businesses 	that 	are 	centrally 	assessed, 	but 	that 	is 	not 	used
in 	one 	of the 	activities 	that 	triggered 	central 	assessment." 	Id. 	1n 	1953, 	the 	central 	assessment
provisions 	were 	codified 	in 	ORS 	chapter 	308, 	and 	the 	list 	of centrally 	assessed 	companies
became 	codified 	in 	ORS 	308.515. 	1n 	1955, 	the 	legislature 	reorganized 	the statute 	slightly." 	Or
Laws 	1955, 	ch 	735, 	§ 	l.
companies, 	tank 	line 	companies, 	private 	car 	companies, pipe 	line 	companies, 	toll 	bridge
companies, 	heating 	companies, 	water, 	gas 	and 	electric 	companies, 	people's 	utility 	districts, 	aircraft
companies 	engaged 	in 	air 	transport 	of passengers, 	freight, 	express 	or 	mail 	and 	water 	transportation
companies 	engaged 	in 	the 	business 	of transporting 	freight 	or 	passengers 	for 	hire 	upon 	the 	rivers 	in
or 	adjoining 	the 	state 	of Oregon."
Or 	Laws 	1949, 	ch 	414, 	§ 	1.
71 	The 	fiill 	text 	of the 	law 	as 	amended 	in 	1951 	was:
"To 	make 	an 	annual 	assessment, 	upon 	an 	assessment 	roll 	to 	be 	prepared 	by 	said
commission, 	of the 	property 	having 	a 	situs in 	this 	state, 	as 	hereinafier 	defined, 	of all 	companies
engaged 	in performing 	or 	maintaining 	any 	of the 	following 	businesses 	or 	services, 	whether 	in
domestic 	or 	interstate 	commerce 	or 	both, 	and 	whether 	mutually, 	or 	for 	hire, 	sale or 	consumption
by 	other 	persons: 	Railroad 	transportation; 	railroad 	switching 	and 	terminal; 	electric 	rail 	and
trackless 	trolley 	transportation; 	sleeping 	car; 	refrigerator 	car; 	private 	car; 	tank 	car; 	air
transportation 	on 	certificated 	flight 	or 	by 	letter 	of registration; 	water 	transportation 	upon 	inland
waters 	of the 	State 	of Oregon 	including 	interstate 	rivers 	and 	standing 	waters, 	and 	tide 	waters
extending 	to 	the 	ocean 	bar, 	but 	not 	when 	incidental 	to 	transportation 	upon 	the 	high 	seas; 	express;
telegraph 	communication; 	telephone 	communication 	including 	cooperative 	telephone 	districts;
heating; 	water, 	gas 	and 	electric 	companies 	including 	people's 	utility 	districts; 	pipe 	line; 	toll 	bridge;
and 	all 	companies 	to 	the 	extent 	that 	they 	own, 	operate 	or 	maintain 	refrigeration, 	tank 	or 	private
cars 	for 	their 	own 	use. 	Any 	corporation 	included 	within 	the 	foregoing 	provisions, 	to 	the 	extent 	that
it 	actively 	engages 	in 	any 	business 	or 	service 	not 	described 	therein 	or 	not 	incidental 	to 	any
business 	or 	service 	described 	therein, 	shall 	not 	to 	that 	extent 	be 	deemed 	a 	corporation 	whose
properties 	are 	assessed 	under 	the 	provisions 	of this 	Act."
Or 	Laws 	1951, 	ch 	586, 	§ 	2.
72 	The 	fiill 	text 	of the 	law 	as 	amended 	in 	1955 	was:
"(1) 	The 	State 	Tax 	Commission 	shall 	make 	an 	annual 	assessment, 	upon 	an 	assessment
roll 	to 	be 	prepared 	by 	the 	commission, 	of the 	following 	property 	having 	a 	situs 	in 	this 	state:
"(a) 	The 	property 	of all 	companies 	engaged 	in 	performing 	or 	maintaining 	any 	of the
following 	businesses 	or 	services, 	whether 	in 	domestic 	or 	interstate 	commerce 	or 	both, 	and 	whether
mutually, 	or 	for 	hire, 	sale 	or 	consumption 	by 	other 	persons: 	Railroad 	transportation; 	railroad
switching 	and 	terminal; 	electric 	rail 	and 	trackless 	trolley 	transportation; 	sleeping 	car; 	refrigerator
car; 	private 	car; 	tank 	car; 	air 	transportation 	on 	certificated 	flight 	or 	by 	letter 	of registration; 	water
transportation 	upon 	inland 	waters 	of the 	State 	of Oregon, 	except 	as 	provided 	in 	subsection 	(2);
ORDER 	0N 	CROSS-MOTIONS 	FOR 	PARTIAL
SUMMARY 	JUDGMENT 	Tc 	5409 	(CONTROL) 	Page 	53 	of 57

In 	1957, 	the 	legislature 	added 	"air 	or 	railway 	express" 	to 	the 	list 	of centrally 	assessed
companies. 	Or 	Laws 	1957, 	ch 	711, 	§ 	3. 	The 	legislature 	also 	reorganized 	subsection 	(2), 	dealing
with 	water 	transportation, 	and 	added 	subsections 	(5), 	about 	gas 	in 	containers, 	and 	(6), 	about
entities 	not 	yet 	engaged 	in 	a 	centrally 	assessed 	business." 	Id. 	The 	legislature 	made 	additional
express; 	telegraph 	communication; 	telephone 	communication 	including 	cooperative 	telephone
districts; 	heating; water, 	gas 	and 	electric 	companies 	including 	people's 	utility 	districts; 	pipe 	line;
toll 	bridge.
"(b) 	Refrigeration, 	tank 	and 	private 	cars 	of all 	companies 	not 	included 	in 	subsection 	(a)
hereof, 	where 	such 	cars 	are 	rented, 	leased 	or 	used 	in 	railroad 	transportation 	for 	hire.
"(2) 	Water 	transportation 	companies 	whose 	watercraft 	ply exclusively 	(a) 	on 	the 	high
seas, 	or 	(b) 	between 	the 	high 	seas 	and 	inland 	water 	ports 	or 	termini, 	or 	(c) 	a 	combination 	of (a) 	and
(b), 	shall 	not 	be 	assessed 	under 	subsection 	(1).
"(3) 	For 	the 	purposes 	of this 	section, 	ORS 	308.255 	and 	308.550, 	'inland 	water' 	or 	'inland
waters' 	shall 	mean 	all 	water 	or 	waters 	within 	the 	State 	of Oregon, 	all 	interstate 	rivers touching
Oregon 	and 	all 	tidewaters 	extending 	to 	the 	ocean 	bars.
"(4) 	Any 	corporation 	included 	within 	subsection 	(1) 	of this 	section, 	to 	the 	extent 	that 	it
actively 	engages 	in 	any 	business 	or 	service 	not 	described 	therein 	or 	not 	incidental 	to 	any 	business
or 	service 	described 	therein, 	shall 	not 	to 	that 	extent 	be 	deemed 	a 	corporation 	whose 	properties 	are
assessed 	under 	ORS 	308.505 	to 	308.660."
Or 	Laws 	1955, 	ch 	735, 	§1.
73 	The 	fiill 	text 	of the 	law 	as 	amended 	in 	1957 	was:
"(1) 	The 	State 	Tax 	Commission 	shall 	make 	an 	annual 	assessment, 	upon 	an 	assessment
roll 	to 	be 	prepared 	by 	the 	commission, 	of the 	following 	property 	having 	a 	situs 	in 	this 	state:
"(a) 	Except 	as 	provided 	in 	subsection 	(2) 	of this 	section, any 	property 	held 	for 	or 	used 	by
any 	company 	in 	performing 	or 	maintaining 	any 	of the 	following 	businesses 	or 	services 	or 	in
selling 	any 	of the 	following 	commodities, 	whether 	in 	domestic 	or 	interstate 	commerce 	or 	both, 	and
whether 	mutually, 	or 	for 	hire, 	sale 	or 	consumption 	by 	other 	persons: 	Railroad 	transportation;
railroad 	switching 	and 	terminal; 	electric 	rail 	and 	trackless 	trolley 	transportation; 	sleeping 	car;
refrigerator 	car; 	private 	car; 	tank 	car; 	air 	transportation 	on 	certificated 	flight 	or 	by 	letter 	of
registration; 	water 	transportation 	upon 	inland 	waters 	of the 	State 	of Oregon; 	air 	or 	railway 	express;
telegraph 	communication; 	telephone 	communication: 	heating; 	water; 	gas; 	electricity; 	pipe 	line; 	toll
bridge.
"(b) 	Refrigeration, 	tank 	and 	private 	cars 	of all 	companies 	not 	included 	in 	paragraph 	(a) 	of
this 	subsection, 	where 	such 	cars 	are 	rented, 	leased or 	used 	in 	railroad 	transportation 	for 	hire.
"(2) 	There 	shall 	not 	be 	assessed 	under 	subsection 	(l) 	of this 	section:
"(a) 	Any 	property 	used 	by 	or 	for water 	transportation 	companies 	whose 	watercraft 	ply
exclusively 	(A) 	on 	the 	high 	seas, 	or 	(B) 	between 	the 	high 	seas and 	inland 	water 	ports 	or 	termini, 	or
(C) 	a 	combination 	of (A) 	and 	(B), 	or 	(D) 	as 	ferries 	operating 	directly 	across 	interstate 	rivers; 	or
"(b) 	Any 	property 	used 	by 	or 	for 	water 	transportation 	companies 	exclusively 	for 	booming
ORDER 	0N 	CROSS-MOTIONS 	FOR 	PARTIAL
SUMMARY 	JUDGMENT 	Tc 	5409 	(CONTROL) 	Page 	54 	of 57

changes 	in 	1959 	and 	1965. 	Or 	Laws 	1959, 	ch 	109, 	§ 	l 	(adding 	"for 	hire 	by 	other 	persons" 	and
"or 	guide 	service" 	to 	ORS 	308.515(2)(b) 	(1959), 	adding 	"whether 	or 	not 	through 	pipe 	in 	a
gaseous 	form" 	and 	replacing 	"industrial 	or 	liquified 	gas" 	with 	"undiluted 	liquefied 	or 	industrial
gas" 	in 	ORS 	308.515(5) 	(1959)); 	Or 	Laws 	1965, 	ch 	175, 	§ 	1 	(replacing 	"on 	certificated 	flight 	or
by 	letter 	of registration" 	with 	"certificated 	by 	the 	Civil 	Aeronautics 	Board 	for 	scheduled 	air
service"). 	Two 	1973 	bills 	impacted 	the 	central 	assessment 	statutes. 	The 	first 	defined
"communication" 	in 	ORS 	308.505 	(1973) 	as 	"inc1ude[ing] 	telephone 	communication, 	telegraph
communication 	and 	data 	transmission 	services 	by 	whatever 	means 	provided" 	and 	replaced
"telegraph 	communication; 	telephone 	communication" 	with 	"communication" 	in 	ORS 	308.515
(1973). 	Or 	Laws 	1973, 	ch 	102, 	§§ 	1-2. 	The 	other added 	"division 	of the 	department 	charged 	with
property 	taxation 	administration" 	to 	ORS 	308.5 	15(1) 	(1973) 	and 	replaced 	"held 	for 	or 	used" 	with
"used 	or 	held 	for 	its 	own 	future 	use" 	in 	ORS 	308.5 	15(1)(a) 	(1973). 	Or 	Laws 	1973, 	ch 	402, 	§ 	8.
Another 	minor 	change 	was 	made 	in 	1981. 	Or 	Laws 	1981, 	ch 623, 	§ 	4 	(replacing 	"certificated 	by
the 	Civil 	Aeronautics 	Board" 	with 	"using 	aircraft 	in 	excess 	of 75,000 	pounds 	gross 	taxi 	weight."
1n 	1983, 	the 	legislature 	added 	an 	exemption 	for 	Amtrak 	property. 	Or 	Laws 	1983, 	ch 	600,
§ 	1 	(adding 	ORS 	308.515(2)(d) 	(1983): 	"Any 	property 	of the 	National 	Railroad 	Passenger
Corporation 	so 	long 	as 	federal 	law 	prohibits 	such 	company 	from 	paying 	ad 	valorem 	taxes. 	All
unpaid 	ad 	valorem 	taxes 	levied 	prior 	to 	the 	effective 	date 	of this 	1983 	Act 	are 	void 	and 	the 	taxes
shall 	be 	removed from 	the 	assessment 	and 	tax 	rolls."). 	ln 	1987, 	another 	exemption was 	added,
this 	time 	for 	certain 	aircraft. 	Or 	Laws 	1987, 	ch 	601, 	§ 	1 	(adding 	ORS 	308.515(2)(e) 	(1987):
"Any 	aircraft 	that 	is 	required 	to 	be 	registered 	under 	ORS 	493.080 	for 	all 	or 	any 	part 	of the
and 	rafting; 	dredging; 	log 	or 	marine 	salvage; 	ship 	berthing, 	maintenance, 	sludge 	removal, 	cleaning
or 	repair; 	or 	marine 	or 	water-based 	construction.
"(c) 	Any 	property 	used 	by 	or 	for 	interstate 	ferries.
"(3) 	For 	the 	purposes 	of this 	section, 	ORS 	308.255 	and 	308.550, 	'inland 	water' 	or 	'inland
waters' 	shall 	mean 	all 	water 	or 	waters 	within 	the 	State 	of Oregon, 	all 	interstate 	rivers touching
Oregon 	and 	all 	tidewaters 	extending 	to 	the 	ocean 	bars.
"(4) 	Any 	corporation 	included 	within 	subsection 	(1) 	of this 	section, 	to 	the 	extent 	that 	it
actively 	engages 	in 	any 	business 	or 	service 	not 	described 	therein 	or 	not 	incidental 	to 	any 	business
or 	service 	or 	sale 	of a 	commodity 	described 	therein, 	shall 	not 	to 	that 	extent 	be 	deemed 	a
corporation 	whose 	properties 	are 	assessed 	under 	ORS 	308.505 	to 	308.660.
"(5) 	Any 	company, 	to 	the 	extent 	that 	it 	furnishes 	industrial or 	liquefied 	gas 	in 	bottles 	or
similar 	containers, 	is 	not 	a 	gas 	company 	under 	subsection 	(1) 	of this 	section. 	Any 	company, 	to 	the
extent 	that 	it 	fumishes 	water 	for 	commercial irrigation, 	is 	not 	a 	water 	company 	under 	subsection
(1) 	of this 	section. 	Any 	company 	which 	generates 	electricity 	primarily 	for 	its 	own 	use, 	but 	which
makes 	incidental 	sales 	of its 	surplus 	electricity, 	is not 	an 	electric 	company 	under 	subsection 	(l) 	of
this 	section.
"(6) 	The 	provisions 	of ORS 	308.505 	to 	308.660 	shall 	be 	construed 	to 	subject 	to
assessment 	by 	the 	commission 	the 	property 	owned, 	leased 	or 	occupied 	by 	a 	legal 	entity 	not 	yet
engaged 	in 	a 	business, 	service 	or 	sale 	of commodity 	enumerated 	in 	ORS 	308.515, 	which 	is
intended 	for 	operation 	or 	use 	in 	such 	a 	business, 	service 	or sale 	of commodity."
Or 	Laws 	1957, 	ch 	711, 	§ 	3.
ORDER 	ON 	CROSS-MOTIONS 	FOR 	PARTIAL
SUMMARY 	JUDGMENT 	TC 	5409 	(CONTROL) 	Page 	55 	0f 57

calendar 	year, 	and 	which 	is 	not 	used 	to 	provide 	scheduled passenger 	service"). 	Some 	deletions
were 	made 	in 	1995 	and 	1997. 	Or 	Laws 	1995, 	ch 	256, 	§ 	1 	(deleting 	"[a]ny 	company, 	to 	the 	extent
that 	it 	furnishes 	water 	for 	commercial 	irrigation, 	is 	not 	a 	water 	company 	under subsection 	(1) 	of
this 	section" 	from 	ORS 	308.515(5) 	(1995)); 	Or 	Laws 	1997, 	ch 	154, 	§ 	33 	(deleting 	references 	to
ORS 	308.705 	and 	ORS 	308.730 	(repealed)). 	Also 	in 	1997, 	the 	definition 	of what 	is 	not 	an
electric 	company 	was 	revised. 	Or 	Laws 	1997, 	ch 	656, 	§ 	2 	(revising 	definition 	of what 	does 	not
constitute 	an 	electric 	company 	and 	adding 	reference 	to 	definition 	of "electric 	utility" 	in 	ORS
758.505). 	ln 	1999, 	revisions 	were 	made 	in 	308.515(1). 	Or 	Laws 	1999, 	ch 	223, 	§ 	1 	(replacing
"sleeping 	car; 	refrigerator 	car; 	private 	car; 	tank 	car" 	with 	"private railcar 	transportation" 	in 	ORS
308.515(l)(a) 	(1999) 	and 	replacing 	"[r]efrigeration, 	tank 	and 	private 	cars" 	with 	"[p]rivate
railcars" 	in 	ORS 	308.515(1)(b) 	(1999)).
A 	2005 	technical 	corrections 	bill 	made 	nonsubstantive 	changes 	to 	the 	list 	of centrally
assessed 	businesses. 	Or 	Laws 	2005, 	ch 	94, 	§ 	53. 	Apart 	from 	two 	minor 	changes, 	the 	text 	of the
statute 	has 	remained 	the 	same 	since 	2006.74 	Or 	Laws 	2009, 	ch 	128, 	§ 	5 	(replacing 	"both" with
74 	The 	text 	of the 	2017 	version 	of 308.515 	is:
"(1) 	The 	Department 	of Revenue 	shall 	make 	an 	annual 	assessment 	of any 	property 	that 	has 	a 	situs
in 	this 	state 	and 	that, 	except 	as 	provided 	in 	subsection 	(3) 	of this 	section, 	is 	used 	or 	held 	for 	future 	use 	by
any 	company 	in 	performing 	or 	maintaining 	any 	of the 	following 	businesses 	or 	services 	or 	in 	selling 	any 	of
the 	following 	commodities, 	whether 	in 	domestic 	or 	interstate 	commerce 	or 	in 	any 	combination 	of domestic
and 	interstate 	commerce, 	and 	whether 	mutually 	or 	for 	hire, 	sale 	or 	consumption 	by 	other 	persons:
(a) 	Railroad 	transportation;
(b) 	Railroad 	switching 	and 	terminal;
(c) 	Electric 	rail 	transportation;
(d) 	Private 	railcar 	transportation;
(e) 	Air 	transportation;
(f) 	Water 	transportation 	upon 	inland 	water 	of the 	State 	of Oregon;
(g) 	Air 	or 	railway 	express;
(h) 	Communication;
(i) 	Heating;
(j) 	Gas;
(k) 	Electricity;
(L) 	Pipeline;
(m) 	Toll 	bridge; 	or
(n) 	Private 	railcars 	of all 	companies 	not 	otherwise 	listed 	in this 	subsection, 	if the 	private 	railcars
are 	rented, 	leased or 	used 	in 	railroad 	transportation 	for 	hire.
(2) 	The 	assessment 	described 	in 	subsection 	(1) 	of this 	section 	shall 	be 	made 	on 	an 	assessment 	roll
ORDER 	0N 	CROSS-MOTIONS 	FOR 	PARTIAL
SUMMARY 	JUDGMENT 	Tc 	5409 	(CONTROL) 	Page 	56 	of 57

"in 	any 	combination 	of domestic 	and 	interstate 	commerce" 	in 	ORS 	308.515(1) 	(2009) 	and
deleting 	ORS 	308.515(4) 	(2007)); 	Or 	Laws 	2012, 	ch 	103, 	§1 	(moving 	definition 	of what 	is 	not
considered 	a 	gas 	bottle 	company 	and 	an 	electric 	company 	to 	ORS 	308.516).
that 	is 	prepared 	by 	the 	division 	of the 	department 	charged 	with 	property 	tax 	administration.
(3) 	There 	may 	not 	be 	assessed 	under 	subsection 	(1) 	of this 	section:
(a) 	Any 	property 	used 	by 	or 	for 	water 	transportation 	companies 	whose 	watercraft 	ply exclusively
on 	the 	high 	seas, 	0r 	between 	the 	high 	seas 	and 	inland 	water 	ports or 	terminals, 	or 	any 	combination 	thereof.
(b) 	Any 	property 	used 	by 	or 	for 	water transportation 	companies 	exclusively 	for 	hire 	by 	other
persons 	for 	booming 	and 	rafting, 	dredging, 	log 	or 	marine 	salvage, 	ship 	berthing, 	maintenance, 	sludge
removal, 	cleaning 	or 	repair, marine 	or 	water-based 	construction, 	or 	guide 	service.
(c) 	Any 	property 	used 	by 	or 	for 	interstate 	ferries 	or 	by 	or 	for 	water 	transportation 	companies 	as
ferries 	operating 	directly 	across 	interstate 	rivers.
(d) 	Any 	property 	of the 	National 	Railroad 	Passenger 	Corporation.
(e) 	Any 	aircraft 	that 	is 	required 	to 	be 	registered 	under 	ORS 	837.040 	for 	all 	or 	any 	part 	of the
calendar 	year 	and 	that 	is 	not 	used 	to 	provide 	scheduled 	passenger 	service.
(4) 	Any 	corporation 	included 	within 	subsection 	(l) 	of this 	section, 	to 	the 	extent 	that 	it 	actively
engages 	in 	any 	business 	or 	service 	not 	described 	therein 	or 	not 	incidental 	to 	any 	business 	or 	service 	or 	sale
of a 	commodity 	described 	therein, 	may 	not 	to 	that 	extent 	be 	deemed 	a 	corporation 	whose 	properties 	are
assessed 	under 	ORS 	308.505 	to 	308.681.
(5) 	The 	department 	shall 	assess 	property 	owned, 	leased or 	occupied 	by 	a 	legal 	entity 	not 	yet
engaged 	in 	a 	business, 	service 	or 	sale 	of a 	commodity 	that 	is 	described 	in 	subsection 	(1) 	of this 	section 	if
the 	property 	is 	intended 	for 	operation 	or use 	in 	the 	business, 	service 0r 	sale 	of the 	commodity.
ORS 	308.515.
ORDER 	ON 	CROSS-MOTIONS 	FOR 	PARTIAL
SUMMARY 	JUDGMENT 	TC 	5409 	(CONTROL) 	Page 	57 	0f 57