(1) As used in this section, ‘withdrawal date’ means the effective date of an ordinance approving withdrawal of an affected area under ORS § 267.250 to 267.263.

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(2) An ordinance approving the withdrawal of an affected area under ORS § 267.250 to 267.263 shall take effect on the first day of January next following the date which is 30 days after the adoption of the ordinance.

(3) Commencing immediately upon the withdrawal date and notwithstanding any other provision of law, the rate of each tax imposed by the district shall automatically be increased to a rate equal to the rate determined by dividing the rate at which such tax was levied immediately prior to the withdrawal date by a fraction, not more than one, which is equal to the total revenue derived from such tax by the district for the calendar year preceding the year in which the withdrawal ordinance is adopted attributable to the area of the district other than the withdrawn affected area divided by the total revenue derived from such tax by the district for the same period.

(4) If the tax rates required under subsection (3) of this section do not produce tax revenues sufficient to enable the district to make the annual or semiannual payments, when due, and otherwise satisfy the requirements of the bonded or other indebtedness of the district incurred prior to the withdrawal, the district may increase the rate of each tax to a rate that produces revenues sufficient to enable the district to make the annual or semiannual payments, when due, and otherwise satisfy the requirements of such indebtedness.

(5) The district board shall determine rates in accordance with the formula prescribed by subsection (3) of this section and adopt the rates as part of the ordinance approving the withdrawal of the affected area. Any such determination and adoption shall be final and conclusive unless it is shown to be arbitrary and capricious.

(6) If a district adopts an ordinance that increases the rate of an excise tax described in ORS § 267.385, the increase shall be adjusted as prescribed in subsection (3) of this section to take into account the withdrawal of an affected area that occurred or occurs at any time after the date the district first imposed any taxes pursuant to ORS § 267.385. [1987 c.799 § 6; 2003 c.739 § 10]