(1) If tax-deferred homestead property is acquired by the Department of Transportation through condemnation, the taxpayer may elect to continue to defer the payment of taxes and interest and the cost of insurance purchased pursuant to ORS § 311.670 (4)(b) by:

(a) Filing a written notice of intent to continue deferral with the Department of Revenue on or before 30 days after the date the Department of Transportation has acquired title to the condemned homestead; and

(b) Filing a claim for deferral with respect to a new homestead within one year after the Department of Transportation has acquired title to the condemned homestead.

(2) Upon receipt of a notice of intent to continue deferral of taxes attributable to a condemned homestead under subsection (1) of this section, the Department of Revenue shall prepare an estimate of the amount of taxes and interest, the cost of insurance purchased pursuant to ORS § 311.670 (4)(b) and fees that have been and, if approved under subsections (3) and (5) of this section, will continue to be deferred upon the release and satisfaction of the lien on the condemned homestead and the recordation of the lien on the new homestead.

(3) After preparing the estimate described in subsection (2) of this section, the Department of Revenue shall grant a temporary deferral of taxes with respect to the condemned homestead not to exceed the length of time described in subsection (1)(b) of this section if:

(a) The Department of Transportation has acquired title to the condemned homestead; and

(b) The taxpayer has a legally enforceable escrow agreement with a title company that:

(A) Provides for an interest-bearing escrow account in which moneys are deposited that are sufficient to pay in full the amount of deferred taxes and interest, the cost of insurance purchased pursuant to ORS § 311.670 (4)(b) and fees on the condemned homestead property as estimated under subsection (2) of this section;

(B) Establishes the Department of Revenue as the beneficiary of the escrow agreement;

(C) Provides that the moneys of the escrow account are to be released to the taxpayer upon the Department of Revenue’s approval of continued deferral under subsection (5) of this section and the recordation of the lien described in subsection (6) of this section with the county clerk; and

(D) Provides that the full amount of the estimated deferred taxes and interest, the cost of insurance purchased pursuant to ORS § 311.670 (4)(b) and fees related to the condemned homestead are to be released to the Department of Revenue if the continued deferral described in subsection (5) of this section is not granted by the Department of Revenue.

(4) The Department of Revenue shall provide a release or satisfaction of the lien on the condemned homestead when an escrow account has been established as provided under subsection (3) of this section.

(5) Upon receipt of a claim for the deferral of taxes for a new homestead that also seeks to continue the deferral of taxes attributable to a condemned homestead for which a temporary deferral has been granted under subsection (3) of this section, the Department of Revenue shall approve the continued deferral of the taxes temporarily deferred under subsection (3) of this section if:

(a) The taxpayer’s equity interest in the new homestead equals or exceeds in value the total of the amount of deferred taxes and interest, the cost of insurance purchased pursuant to ORS § 311.670 (4)(b) and fees on the condemned homestead as estimated under subsection (2) of this section, plus $10,000;

(b) The taxpayer is entitled to tax deferral under ORS § 311.666 to 311.701 with respect to the new homestead; and

(c) The taxpayer consents to the continued deferral of taxes and to the lien on the new homestead property as provided in subsection (6) of this section.

(6) Upon granting the continued deferral under subsection (5) of this section, the Department of Revenue shall have a lien on the new homestead in the amount of the estimate prepared under subsection (2) of this section plus interest and any fees incurred in connection with the recording of the lien. The lien described in this subsection shall be in addition to any other lien under ORS § 311.673 that the Department of Revenue shall have with respect to the new homestead. The provisions of ORS § 311.679 relating to liens shall apply to the lien described in this subsection. At the time the lien described in this subsection is recorded, the escrow account described in subsection (3) of this section shall be closed and the moneys in the account released to the taxpayer.

(7) The Department of Revenue may prescribe such rules as are needed to implement the provisions of this section. [1997 c.169 § 4; 1999 c.21 § 31; 2015 c.309 § 7]