(2) Notwithstanding subsection (1) of this section, if the property of a district is located within the corporate limits of a city, such property shall, upon dissolution of the district, vest in the city in which located and the property of the district lying outside the corporate limits of any city shall vest in the county until the formation of a city embracing such territory, at which time it shall vest in the city.
(3) In each year that the county receives surplus funds to the credit of the district under subsection (1) of this section, any funds in the account of the district on June 30, in excess of $6,000 retained by the county for administration, shall be certified to the county assessor and shall be disposed of as provided under one of the following paragraphs, as selected by the county assessor:
(a) Notwithstanding ORS 310.105, the funds may be offset against that portion of the levies of taxing units levied against the property values of property within the dissolved district. The method of offset shall be further defined by rule of the Department of Revenue. If the funds are offset as provided under this paragraph, the funds shall be distributed to each taxing unit in the amount of that taxing unit’s offset.
(b) The amount may be credited to each property appearing on the tax roll for the year for which the credit applies within the dissolved district on the basis of current assessed value. If the surplus funds are distributed under this paragraph, the surplus funds shall be deposited in the unsegregated tax collections account established under ORS 311.385 and distributed in the same manner as other funds in that account. The method to be used to credit the amount of the surplus shall be further defined by rule of the Department of Revenue. [1971 c.727 §56; 1989 c.883 §1; 1991 c.459 §343]