Note: Section 1, chapter 637, Oregon Laws 2015, provides:

Sec. 1. (1) As soon as practicable after the operative date determined under section 2, chapter 637, Oregon Laws 2015 [May 17, 2016], and until the 60th day following the operative date, the City of Damascus shall post notices in at least two public locations in the city and on the website of the city stating that:

(a) Under subsection (2) of this section, the city is required to satisfy all current and pending debts and obligations for which the city is liable; and

(b) Persons believing themselves to be creditors of the city should present claims to the city as soon as possible to ensure that all valid debts and obligations for which the city is liable will be timely paid.

(2) Notwithstanding ORS 221.650, during the period that begins on the 30th day following the operative date determined under section 2, chapter 637, Oregon Laws 2015, and ends on the 60th day following the operative date:

(a) The City of Damascus shall expend moneys in the funds of the city to satisfy:

(A) Current and pending debts and obligations for which the city is liable, including, but not limited to, debt service payments, lease obligations, financing arrangements and similar obligations;

(B) Outstanding obligations relating to employment of city employees, including pension and other employee benefit obligations; and

(C) Other debts, obligations, liabilities and expenses requiring financial satisfaction by a disincorporating city.

(b) As soon as practicable after making the expenditures required under paragraph (a) of this subsection, the city shall transfer:

(A) All moneys in the city road fund to Clackamas County for deposit in a separate account in the county road fund created for purposes of this subparagraph. Moneys in the separate account shall be expended by the county for the purposes for which moneys in the county road fund may be expended, solely in the territory within the corporate boundaries of the City of Damascus as they existed on the operative date determined under section 2, chapter 637, Oregon Laws 2015.

(B) An amount not to exceed $3 million to Clackamas County for deposit in a separate account in the county general fund created for purposes of this subparagraph. Moneys in the separate account shall be expended by the county for expenses related to the employment of employees of the City of Damascus by Clackamas County pursuant to ORS 236.605 to 236.640, contracted law enforcement services within the territory of the disincorporated city and other current service expenses in the budget of the City of Damascus on the operative date determined under section 2, chapter 637, Oregon Laws 2015, and the administration by the county of this subparagraph, including but not limited to the processing of expenditures under this subparagraph.

(c) The City of Damascus shall transfer all moneys in the funds of the city in excess of the moneys required to be expended under paragraph (a) of this subsection and transferred under paragraph (b) of this subsection to Clackamas County for deposit in a separate account in the county general fund created for purposes of this paragraph. Excess moneys in the separate account shall be distributed by the county as provided in subsection (3) of this section.

(3)(a) Excess moneys transferred to Clackamas County under subsection (2)(c) of this section shall be distributed by the county on or as soon as practicable after January 1, 2018, to each person that owned taxable property as of June 30, 2016, for which property taxes were paid in full to the City of Damascus for the property tax year beginning on July 1, 2015, in an amount determined by multiplying the amount of all excess moneys to be distributed under this subsection by the ratio of the cumulative amount of ad valorem property taxes certified by the city and paid with respect to the property owned by the person for the property tax years beginning on July 1, 2013, and ending on June 30, 2016, to the cumulative amount of ad valorem property taxes certified by the city and paid with respect to property owned by all persons eligible for the distribution under this subsection for the property tax years beginning on July 1, 2013, and ending on June 30, 2016.

(b) Notwithstanding paragraph (a) of this subsection, amounts that would otherwise be distributed under paragraph (a) of this subsection to a taxpayer with respect to a homestead granted deferral under ORS 311.666 to 311.701 shall be paid to the credit of the account maintained for the deferred property by the Department of Revenue pursuant to ORS 311.676. The county shall notify the taxpayer upon making a payment to the department under this paragraph.

(c) A distribution is not required under this subsection if the amount of the distribution would be $10 or less.

(d) Before making the distributions described in this subsection, the county may retain an amount of the excess moneys equal to the actual costs of the county in making the distributions.

(e) Excess moneys to be distributed under this subsection that remain unclaimed on January 1, 2019, shall be transferred to the general fund of Clackamas County and may be expended by the county in the same manner as other moneys in the general fund.

(4)(a) Notwithstanding any other provision of law, in order to compensate Clackamas County for the distribution of excess moneys under subsection (3) of this section, for the period that begins on the 61st day following the operative date determined under section 2, chapter 637, Oregon Laws 2015, and ending 10 years later:

(A) Funds that would otherwise have been distributed to the City of Damascus under ORS 323.455, 403.240 and 471.810 shall be distributed to Clackamas County for deposit in a separate account in the general fund of the county created for purposes of this subparagraph.

(B) Funds that would otherwise have been distributed to the City of Damascus under ORS 366.785 to 366.820 shall be distributed to Clackamas County for deposit in a separate account in the general fund of the county created for purposes of this subparagraph.

(b)(A) Moneys described in paragraph (a)(A) of this subsection shall be expended by the county on costs, including the actual costs of the county in administering this subsection, related to public safety and law enforcement, urban comprehensive planning, code enforcement and waste water and surface water management that are incurred solely in the territory within the corporate boundaries of the City of Damascus as they existed on the operative date determined under section 2, chapter 637, Oregon Laws 2015.

(B) Moneys described in paragraph (a)(B) of this subsection shall be expended by the county for uses permitted under Article IX, section 3a, of the Oregon Constitution, solely in the territory within the corporate boundaries of the City of Damascus as they existed on the operative date determined under section 2, chapter 637, Oregon Laws 2015.

(c) Territory that is removed from the Metro urban growth boundary or that is annexed to another city during the period described in paragraph (a) of this subsection shall, from the effective date of the removal or annexation, be considered outside the corporate boundaries of the City of Damascus for purposes of this subsection. [2015 c.637 §1; 2017 c.750 §132]

Note: Pursuant to section 2, chapter 637, Oregon Laws 2015, section 1, chapter 637, Oregon Laws 2015, became operative on May 17, 2016, the date on which a majority of the voters of the City of Damascus approved chapter 603, Oregon Laws 2015, pursuant to section 2, chapter 603, Oregon Laws 2015.

Note: Sections 1 to 4, chapter 545, Oregon Laws 2019, provide:

Sec. 1. (1) Notwithstanding ORS 221.610, 221.621 and 221.650, a city shall be deemed to be disincorporated and shall cease to exist in accordance with subsection (2) of this section, upon a determination by the Secretary of State that:

(a) An election was held in the city on or after January 1, 2016, and before July 1, 2016, which included the question of whether to disincorporate the city;

(b) A majority of voters voting on the question in the election voted in favor of disincorporation;

(c) Following the election, the city charter was surrendered to the county in which the city is situated; and

(d) The Department of Revenue approved a boundary change map or maps under ORS 308.225 that eliminated the city boundaries.

(2) For all purposes whatsoever, the date on which a city was disincorporated and ceased to exist under subsection (1) of this section shall be the date on which the city charter was surrendered to the county. [2019 c.545 §1]

Sec. 2. (1) Notwithstanding ORS 221.610, 221.621 and 221.650:

(a) The Legislative Assembly may refer an Act to the people of a city on the question of whether to disincorporate the city.

(b) If the Legislative Assembly refers an Act under this section:

(A) The election on the measure shall be held on the date of the next primary election held throughout this state that occurs after the enactment of the referred Act; and

(B) The measure shall be approved if a majority of the voters voting on the question in the election votes in favor of disincorporation.

(c) An Act referred by the Legislative Assembly under this section may include any other provision applicable to the disincorporation of a city that does not absolve the city from satisfying outstanding debts or other obligations.

(2) Any other departure or deviation from the election procedures provided under ORS 221.610, 221.621 or 221.650, or from any other law whatsoever, appearing in an Act referred by the Legislative Assembly as described in subsection (1) of this section, and any conflict between the election procedures or any other law whatsoever and the referred Act, shall be resolved in favor of the referred Act so that the consequent election shall be considered valid and without defect.

(3) Notwithstanding any other provision of law, any Act enacted by the Legislative Assembly that requires action as a consequence of the approval of a measure referred as described in subsection (1) of this section becomes operative on the date on which the voters of the city approve the measure. [2019 c.545 §2]

Sec. 3. Section 2 of this 2019 Act applies to Acts enacted or referred, and elections held, before the effective date of this 2019 Act [July 15, 2019]. [2019 c.545 §3]

Sec. 4. (1) It is the intent of the Legislative Assembly by enacting sections 1 to 3 of this 2019 Act to cure any defect in the procedures, and to ratify the results, of any vote on the question of the disincorporation of a city in which the disincorporation was approved by a majority of the voters of the city voting on the question at an election held on the date of a primary election held throughout this state before the effective date of this 2019 Act [July 15, 2019].

(2) Original jurisdiction to determine the validity of sections 1 to 3 of this 2019 Act is conferred on the Supreme Court.

(3)(a) Any person interested in or affected or aggrieved by sections 1 to 3 of this 2019 Act may petition for judicial review under this section. A petition for review must be filed within 30 days after the effective date of this 2019 Act.

(b) The petition must state facts showing how the petitioner is interested, affected or aggrieved and the grounds upon which the petition is based.

(4) Judicial review under this section shall be limited to:

(a) The question of whether sections 1 to 3 of this 2019 Act are valid under the laws of this state and the United States and Oregon Constitutions; and

(b) Legislative history and any supporting documents related to the question described in paragraph (a) of this subsection.

(5) Judicial review under this section shall proceed as follows:

(a)(A) First, the court shall determine whether section 1 of this 2019 Act is valid.

(B) If the court determines that section 1 of this 2019 Act is valid, the Secretary of State shall make the determination described in section 1 (1) of this 2019 Act.

(b)(A) Second, only if the court determines that section 1 of this 2019 Act is invalid under paragraph (a) of this subsection, the court shall determine whether sections 2 and 3 of this 2019 Act are valid.

(B) If the court determines that sections 2 and 3 of this 2019 Act are valid, the court shall issue an order so stating.

(6)(a) Any party interested in or affected by section 1 of this 2019 Act may request the Secretary of State to make the determination described in section 1 (1) of this 2019 Act:

(A) If no petition is filed under subsection (3) of this section within the time allowed for filing; or

(B) In any other circumstances requiring such action in order to have the determination made.

(b) The request must be accompanied by all information and documents necessary for the Secretary of State to make the determination. The request may be amended as necessary to include any additional information or documents the Secretary of State may reasonably require.

(c) The Secretary of State shall make the determination as soon as practicable following receipt of a complete request under this subsection.

(7) In the event the Supreme Court determines that there are factual issues in a petition filed under this section, the Supreme Court may appoint a special master to hear evidence and to prepare recommended findings of fact.

(8) Proceedings for review under this section shall be given priority over all other matters before the Supreme Court.

(9) If the Supreme Court determines that sections 1 to 3 of this 2019 Act are invalid, sections 1 to 3 of this 2019 Act are repealed on the date on which the court issues a decision holding sections 2 and 3 of this 2019 Act to be invalid. [2019 c.545 §4]

Note: The May 17, 2016, election at which the voters of the City of Damascus approved chapter 603, Oregon Laws 2015, was invalidated by the Court of Appeals. De Young v. Brown, 297 Or. App. 355 (2019). Sections 1 and 2, chapter 545, Oregon Laws 2019, ratify the results of, and cure the defects in, that election. However, section 4, chapter 545, Oregon Laws 2019, provides for expedited review of sections 1 and 2, chapter 545, Oregon Laws 2019, to the Supreme Court. A petition has been filed pursuant to section 4, chapter 545, Oregon Laws 2019. Thus, the validity of sections 1 and 2, chapter 545, Oregon Laws 2019, and the consequent validity of chapter 603, Oregon Laws 2015, and operability of section 1, chapter 637, Oregon Laws 2015, remain uncertain, pending the decision of the court.