Crawford v. Dept. of Rev.

OREGON TAX COURT

Bruce W. CRAWFORD

v.

DEPARTMENT OF REVENUE

and

ASSESSOR OF JOSEPHINE COUNTY, OREGON

(TC 4358)

Plaintiff appealed from a property tax assessment for the 1997-98 tax year on the ground that mineral rights conveyed by a United States patent are exempt from property taxation. The court found that the rights, privileges, and immunities conferred by the United States government through a patent are those that are actually a part of the land itself.

Property taxation-Exemption-Property of the United States

1. Property of the United States government, though usually exempt, is subject to state taxation when held under a contract of sale or lease or other interest less than fee simple.

Property taxation-Exemption-Mining claims

2. Once a mining claim patent issues, so that title rests solely in the grantee rather than the United States government, the property is no longer exempt.

Submitted on Plaintiff's motion for summary judgment and Defendant's Cross Motion for Summary Judgment.

Bruce W. Crawford (taxpayer) appeared pro se.

Rochelle Nedeau, Assistant Attorney General, Department of Justice, Salem, represented Defendant.

Marc Kardell, Assistant County Counsel, Josephine County Legal Counsel, Grants Pass, intervened and filed a response to Plaintiff's motion for summary judgment on behalf of Intervenor (county).

Decision for Defendant rendered May 4, 1999.

CARL N. BYERS, Judge

Plaintiff (taxpayer) appeals from a property tax assessment for the 1997-98 tax year on the ground that mineral rights conveyed by a United States patent are exempt from property taxation. There is no dispute of fact, and the matter is before the court on cross motions for summary judgment. Josephine County (county) intervened and participated in the written arguments.

FACTS

In May 1995, taxpayer was granted a patent by the United States government for 32.46 acres of land in Oregon. The patent grants taxpayer the "mining premises, together with all the rights, privileges, immunities, and appurtenances of whatsoever nature thereunto belonging." (Def's Ex A at 1.) Excluded from the grant are two easements and any "veins or lodes of quartz or other rock in place bearing gold, silver, cinnabar, lead, tin, copper, or other valuable deposits" that may have been on the premises and known as of December 24, 1990. Id. at 2.

ISSUE

Are mining premises granted by a United States patent subject to property taxation?

COURT'S ANALYSIS

1. As a general rule, all real property is subject to taxation "except as otherwise provided by law." ORS 307.030(1).(1) Property of the United States government is exempt from property taxation. ORS 307.040. However, where property of the United States is held under a contract of sale (ORS 307.050) or under a lease or other interest less than fee simple (ORS 307.060), the Oregon legislature makes the interest held subject to taxation.

2. ORS 307.080 exempts from taxation mining claims "prior to obtaining a patent therefor from the United States." That statute inferentially acknowledges, as taxpayer here claims, that a patent grants all the title the federal government has to the patent grantee. Therefore, once a mining claim patent issues, the mining premises are fully vested in the grantee. The United States government no longer has any interest in such property right, and the property is no longer exempt.

Taxpayer points out that the patent expressly conveys to him all the "rights, privileges, immunities, and appurtenances" belonging to the property in the hands of the government. Therefore, taxpayer contends that the government has conveyed its exemption from property taxation to him. Taxpayer errs on two grounds. First, the United States government cannot confer its privileges and immunities upon patent grantees. Second, the rights, privileges, and immunities recited in the patent are those appended to or attached to the land, not those inherent in the federal government. Now, therefore,

IT IS ORDERED that Plaintiff's motion for summary judgment is denied, and

IT IS FURTHER ORDERED that Defendant's Cross Motion for Summary Judgment is granted. Costs to neither party.

1. All references to the Oregon Revised Statutes are to 1997.