(a) Is entitled to a deed from the state, conveying and granting such lands not exceeding 160 acres without cost; and
(b) Has a preferential right to purchase from the State of Oregon 160 acres of additional lands, chiefly valuable for agricultural purposes.
(2) Any person who did not reside on any lands described in subsection (1) of this section for five years immediately prior to January 1, 1921, but who purchased the improvement or possessory rights or claims of a prior occupant, and whose residence and possession when tacked to that of such prior occupant extended for a period of not less than five years immediately prior to such date, shall have a preferential right to purchase such lands, not exceeding 160 acres, the price of which shall be fixed without reference to the value of the improvements thereon. [Amended by 1967 c.421 §136]