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Filed: February 8, 2001

PIEDMONT PLAZA INVESTORS,

Appellant,

v.

DEPARTMENT OF REVENUE,
State of Oregon,

Respondent.

_________________________________________________________________

SPENCER HOUSE ASSOCIATES,

Appellant,

v.

DEPARTMENT OF REVENUE,
State of Oregon,

Respondent,

and

WASHINGTON COUNTY,

Intervenor below.

(Consolidated for Review and Decision)

On appeal from the Oregon Tax Court.*

Carl N. Byers, Judge.

Argued and submitted September 12, 2000.

Christopher K. Robinson, Lake Oswego, argued the cause for appellants. With him on the briefs was W. Scott Phinney.

Marilyn J. Harbur, Assistant Attorney General, Salem, argued the cause for respondent. With her on the brief was Hardy Myers, Attorney General.

Before Carson, Chief Justice, and Gillette, Van Hoomissen, Durham, Leeson, and Riggs Justices.**

LEESON, J.

The decision of the Tax Court is reversed.

*14 OTR 440 (1998)

**Van Hoomissen, J., retired on December 31, 2000, and did not participate in the decision of this case. Kulongoski and

DeMuniz, JJ., did not participate in the consideration or decision of this case.

LEESON, J.

In these consolidated tax cases, taxpayers challenge tax assessments of two low-income apartment complexes, Piedmont Plaza and Spencer House, for the tax years 1994-95 and 1995-96. The Tax Court determined that the real market value of the two properties for those tax years is the amount of money that taxpayers received through federally controlled sales of the properties, commonly known as preservation transfer sales. Piedmont Plaza Investors v. Dept. of Rev., 14 OTR 440 (1998). On de novo review, ORS 305.445 (1995), (1) we reverse the decision of the Tax Court.

A brief discussion of section 236 of the National Housing Act (section 236 program), 12 USC