IN THE CIRCUIT COURT OF THE STATE OF OREGON FOR THE COUNTY OF MARION. Case No.

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1 IN THE CIRCUIT COURT OF THE STATE OF OREGON FOR THE COUNTY OF MARION CITY OF DAMASCUS, a municipal corporation, v. Plaintiff, JOHN KlTZHABER, in his official capacity as Governor of Oregon; STATE OF OREGON; METRO, a metropolitan service district of the State of Oregon; CLACKAMAS COUNTY, a political subdivision of the State of Oregon; HENRY N. BROWN, JR.; VALERIE E. BROWN; JEFFRY KENT OLSON; ARDITH ELANE OLSON; GDI NEW HORIZONS, LLC, an Oregon limited liability company; LOWELL E. PATTON; OREGON LUMBER EXPORT COMPANY PENSION TRUST; DEBORAH L. FRANCIS; JOHN HARTSOCK; PATRICIA HARTSOCK; and JOHN AND JANE DOES 1-100, Defendants. Case No. COMPLAINT (Declaratory Relief and Permanent Injunction) NOT SUBJECT TO MANDATORY ARBITRATION AMOUNT CLAIMED: NI A 19 Plaintiff City of Damascus ("Damascus") alleges: 20 FIRST CLAIM FOR RELIEF 21 (Declaratory Relief) At all material times herein, Damascus was and is a municipal corporation located in 24 Clackamas County, Oregon. 25 IIII Page 1 - COMPLAINT _ 4.DOCX\RMW4/23/20 14

2 At all material times herein, defendant John Kitzhaber is the Governor of the state of 3 Oregon. In his official capacity, the Governor is the chief executive officer of the state of 4 Oregon and it is his responsibility to ensure that the state's laws are enforced At all material times, defendant Metro was and is a metropolitan service district formed 7 under the provisions of ORS et. seq At all material times, defendant Clackamas County was and is a political subdivision of 10 the state of Oregon Defendants Henry N. Brown Jr. and Valerie E. Brown are, upon information and belief, 13 owners of real property located at SE Cottingham Lane, Damascus, Oregon. Defendants 14 Hemy N. Brown Jr. and Valerie E. Brown have applied to withdraw their property from the City 15 of Damascus pursuant to HB 4029, identified below Defendants Jeffry Kent and Ardith Elane Olson are, upon information and belief, owners 18 of real property located at SE Vogel, Damascus, Oregon. Defendants Jeffry Kent and 19 Ardith Elane Olson have applied to withdraw their property from the City of Damascus pursuant 20 to HB 4029, identified below Defendant GDI New Horizons, LLC is, upon information and belief, owner of real 23 properties located at SE Armstrong Circle, Damascus, Oregon, SE Armstrong 24 Circle, Damascus, Oregon, and other unaddressed properties within the City of Damascus more 25 particularly described as T2S, R3E, Section 7AD, Tax Lots 600, 700, 800, 801, and 802. Page 2 - COMPLAINT JORDAN RAM IS PC _4.DOCX\RMH/4/

3 1 Defendant GDI New Horizons, LLC has applied to withdraw its properties from the City of 2 Damascus pursuant to HB 4029, identified below Defendant Lowell E. Patton is, upon information and belief, the owner of real property 5 located in the City of Damascus more particularly described as unaddressed parcels North and 6 East of Highway 224, South of SE Eckert Road, and West of SE Tong Road plus area West of 7 SE Highway 224 adjacent to the Clackamas River, more particularly described as T2S, R2E, 8 Section 13A, Tax Lots 700,1500,1600 and 1690; Section l3aa, Tax Lot 2800; T2S, R3E, 9 Section 18, Tax Lots 101, 102, 103,201,300 and 500; Section 18A, Tax Lots 3000, 3001, and 3091; Damascus, Clackamas County, Oregon. Defendant Lowell E. Patton has applied to 11 withdraw its properties from the City of Damascus pursuant to HB 4029, identified below Defendant Oregon Lumber Export Company Pension Trust is, upon information and 14 belief, the owner of real property located in the City of Damascus more particularly described as 15 unaddressed parcels North and East of Highway 224, South ofse Eckert Road, and West of SE 16 Tong Road plus area West ofse Highway 224 adjacent to the Clackamas River, more 17 particularly described as T22, R3E, Section 18, Tax Lots 100 and 200, Damascus, Clackamas 18 County, Oregon. Defendant Oregon Lumber Export Company Pension Trust has applied to 19 withdraw its properties from the City of Damascus pursuant to HB 4029, identified below Defendant Deborah L. Francis is, upon information and belief, the owner of real property 22 located in the City of Damascus more particularly described as unaddressed parcel North and 23 East of Highway 224, South of SE Eckert Road, and West of SE Tong Road plus area West of 24 SE Highway 224 adjacent to the Clackamas River, more particularly described as T2S, R3E, 25 Section 18C, Tax Lot 700, Damascus, Clackamas County, Oregon. Defendant Deborah L. Page 3 - COMPLAINT _ 4.DOCXIRMHl4/23/20 14

4 1 Francis has applied to withdraw its properties from the City of Damascus pursuant to HB 4029, 2 identified below Defendants John Hartsock and Patricia Hartsock are, upon information and belief, the 5 owners of real property located at SE Vogel Way, Damascus, Oregon. Defendants John 6 Hartsock and Patricia Hartsock have applied to withdraw their property from the City of 7 Damascus pursuant to HB 4029, identified below Defendants John and Jane Does are, upon information and belief, persons who 10 may apply to withdraw their property form the City of Damascuspursuant to HB 4029, identified II below On or about March 4, 2014, the Oregon Legislature passed House Bill 4029 ("HB 4029") 14 which purports to authorize the withdrawal of certain real property from any Oregon city that is 15 (a) within Metro; (b) incorporated between January 1,2000, and January 1,2005; and (c) a city 16 that did not acknowledge a comprehensive plan and land use regulations within four (4) years 17 after incorporation. A true copy of HB 4029 is attached hereto as Exhibit I, and by this 18 reference incorporated herein. 19 1~ 20 HB 4029 provides that, in the event the city refuses or otherwise fails to adopt an order or 21 resolution allowing the withdrawal of real property after certain procedural requirements have 22 been met, defendant Metro shall then report the change in the city's boundaries to the applicable 23 county clerk, the applicable county assessor, and the Oregon Department of Revenue. 24 IIIII 25 IIIII Page 4 - COMPLAINT l _ 4.DOCXIRMH/4/23/20 l4

5 By its terms, as actually applied, defendant Clackamas County stands to benefit from HB by virtue of the addition of real property that is within its boundaries, and is subject to one 4 or more taxes, including property taxes On or about March 19,2014, Governor John Kitzhaber signed HB 4029 into law Section 5 of HB 4029 provided that HB 4029 was to take effect upon its passage By its terms, HB 4029, upon information and belief, was intended to apply only to 11 Damascus, and in fact applies to Damascus, and to no other city in the state of Oregon HB 4029 is unconstitutional based on one or more of the following grounds: 14 (a) HB 4029 delegates nonexistent legislative authority in that it allows the 15 amendment of Damascus's charter by authorizing the change in Damascus's boundaries 16 (whether directly or indirectly) in violation of Article XI, Section 2 of the Oregon Constitution. 17 (b) HB 4029 grants to some citizens within Damascus the right to withdraw their real 18 property from Damascus boundaries that it does not grant to other citizens within Damascus in 19 violation of Article I, Section 20 of the Oregon Constitution; 20 (c) HB 4029 deprives Damascus of its power to alter its own boundaries by its own 21 procedures in violation of Article I, Section 21 of the Oregon Constitution. n w. 23 Upon information and belief, the state of Oregon may contend that HB 4029 is 24 constitutional. 25 IIIII Page 5 - COMPLAINT _ 4.DOCXIRMHl4123/20 14

6 Damascus is entitled to a declaration that HB 4029 is unconstitutional. 3 SECOND CLAIM FOR RELIEF 4 (Permanent Injunction) Plaintiff incorporates paragraphs 1 through 20 above, as though fully set forth herein Damascus is entitled to injunctive relief enjoining defendants from enforcing HB WHEREFORE, plaintiff prays for a judgment in its favor and against defendmlts as 10 follows: Declm'ing HB 4029 in violation of the Oregon Constitution. 2. Enjoining defendants and any other IMdowner who files pursuant to HB 4029, from enforcing HB For its costs and disbursements incurred herein; Md 4. Other just Md equitable relief deemed by the Court. Dated this 23rd day of April, Attorneys for Plaintiff City of Damascus Trial Attorney: Christopher L. Reive, OSB # Page 6 - COMPLAINT _ 4.DOCXlRMHl4123/20 14

7 77th OREGON LEGISLATIVE ASSEMBLY Regular Session House Bill 4029 Sponsored by Representative KENNEMER, Senator ROBLAN; Representative FAGAN, Senators OLSEN, THOMSEN (Presession filed,) SUMMARY The following summary is not prepared by the sponsors of the measure and is not a part of the body thereof subject to consideration by the Legislative Assembly. It is an editor's brief statement of the essential features of the measure as introduced. Authorizes withdrawal of tract from city located within Metro and incorporated between January 1, 2000, and January 1, 2005, if city did not,acknowledge comprehensive plan and land use regulations within four years after incorporation and any portion of tract is on boundary of city. Requires owner seeking withdrawal of tract to file certain substantiating documents with city, Metro and Department of Land Conservation and Development. Requires hearing on withdrawal and decision by city to withdraw tract during or immediately after close of hearing. Provides for withdrawal without action by city if city fails or refuses to act. Prohibits city from annexing tract within 10 years following withdrawal. Authorizes any person who testified at hearing to seek judicial review of withdrawal by filing petition in Court of Appeals. Sunsets January 2, Declares emergency, effective on passage. 1 A BILL FOR AN ACT 2 Relating to the withdrawal of property from a city; and declaring an emergency. 3 Be It Enacted by the People of the State of Oregon: 4 SECTION 1. (1) As used in sections 1 and 2 of this 2014 Act, "tract" means one or more 5 contiguous lots or parcels of land under the srune ownership and includes any portion of the 6 contiguous lots or parcels of land under the srune ownership less than the whole. 7 (2) Notwithstanding ORS , the owner of a tract within the boundaries of a city 8 may withdraw the tract from the city if: 9 (a) The city is located within Metro and was incorporated after January 1, 2000, and bela fore January 1, 2005; 11 (b) The comprehensive plan and land use regulations of the city were not acknowledged 12 within four years after incorporation, as required under ORS , and remain unac- 13 knowledged at the time the owner Inakes the filing for withdrawal required under subsection 14 (3) of this section; and 15 (c) Any portion of the tract is located on the boundary of the city. 16 (3)(a) To withdraw a tract froin the city under this section, the owner must: 17 (A) Obtain a letter froin the Department of Land Conservation and Development conls firming that the city's comprehensive plan and land use regulations were not acknowledged 19 in the four-year period following incorporation. The department shall provide the letter 20 within 30 days after the department receives a written request from the owner of the tract. 21 (B) File a written statement with the city in person or by registered mail, return receipt 22 requested, and a copy of the written statement with Metro and the department. 23 (b) The written statement must include: 24 (A) The name of the city from which the tract is to be withdrawn; 25 (B) A declaration by the owner of the owner's intention to withdraw the tract from the NOTE: Matter in boldfaced type in an amended section is new; matter [italic and bracketed] is existing law to be omitted. New sections are in boldfaced type. LC 199 I EXHIBIT.,----..~ PAGELOF~

8 HE city; (C) A copy of a deed, preliminary title report, tax record or similar document showing ownership of the tract; (D) A legal description of the tract to be withdrawn; (E) A copy of the cadastral map maintained by the county assessor that shows the 10M cation of the tract; and (F) A copy of the letter from the department obtained pursuant to paragraph (a)(a) of this subsection. (4) An enforcement order under ORS to is not a prerequisite for the prom vision of the letter by the department as required under subsection (3)(a)(A) of this section or to the withdrawal of the tract under this section. SECTION 2. (1) Notwithstanding any other notice requirements in the city code, within 10 days after receipt of the written statement required under section 1 (3) of this 2014 Act, the legislative body of the city shall cause notice of a public hearing on the question of the withdrawal of the tract to be held within 30 days after receipt of the written statement. (2) For two successive weeks before the date of the public hearing, the notice shall be published once each week in a newspaper of general circulation in the city and posted in four public places in the city. (3) At the public hearing, residents of the city may appear and be heard on the question. (4) After receiving testimony at the public hearing, the legislative body of the city shall withdraw the tract from the city by an order or resolution adopted during a work session at, or immediately after, the close of the public' hearing. (5) Within two business days after the legislative body of the city adopts the order or resolution, the city shall report the change in its boundaries to Metro and the Department of Land Conservation and Development. (6) If the city refuses or fails to adopt the order or resolution within the 30-day period described in subsection (1) of this section: (a) The withdrawal of the tract is deemed complete. (b) Metro shall report the change in the boundaries of the city to the county clerk and county assessor of the county in which the city is located and the Department of Revenue, as required under ORS and , respectively. (7) On and after the effective date of the order or resolution, or completed withdrawal: (a) ORS (10) applies to the withdrawn tract. (b) The withdrawn tract is freed from any urban planning agreement or other local governmental agreement, document or policy that could prevent the tract from being annexed by another jurisdiction. (8) The withdrawal of territory under this section: (a) Is not a land use decision or a limited land use decision subject to the exclusive jurisdiction of the Land Use Board of Appeals under ORS to (b) If completed by order or resolution, is not subject to referral to the electors. (c) Is not subject to ORS (9) A city from which a tract has been withdrawn under this section may not annex the tract for a period of 10 years following the withdrawal unless the owner of the tract submits a petition to the legislative body of the city seeking annexation of the tract. SECTION 3. (1) Aoy person who testified at a public hearing under section 2 (3) of this I [2] EXHIBIT_----,::_ PAGE 7- OF -.2..

9 HE Act may seek judicial review of a withdrawal order or resolution adopted, or a with~ 2 drawal completed without order or resolution, under section 2 (4) or (6) of this 2014 Act, re- 3 spectively, by filing a petition in the Court of Appeals. 4 (2)(a) Except as provided in paragraph (b) of this subsection, ORS , and apply to judicial review under this section. 6 (b) Notwithstanding ORS (9), the court may reverse or remand the action of the 7 city only if the court finds that: 8 (A) The withdrawal was clearly in error; 9 (E) There is a basis to vacate the withdrawal for the reasons for which an arbitration 10 award may be vacated, modified or corrected under ORS (l)(a) to (d) or ; or 11 (C) The withdrawal was unconstitutional. 12 SECTION 4. Sections 1 to 3 of this 2014 Act are repealed on January 2, SECTION 5. This 2014 Act being necessary for the immediate preservation of the public 14 peace, health and safety, an emergency is declared to exist, and this 2014 Act takes effect 15 on its passage. 16 [3] EXH/B/T;:::;--/-..".._ PAGE.3...0F.3...