69th OREGON LEGISLATIVE ASSEMBLY--1997 Regular Session
Enrolled
House Bill 3543
Sponsored by Representative BRIAN
CHAPTER ................
AN ACT
Relating to corporate taxes; creating new provisions; and
amending ORS 317.097.
Be It Enacted by the People of the State of Oregon:
SECTION 1. ORS 317.097 is amended to read:
317.097. (1) A credit against taxes otherwise due under this
chapter for the taxable year shall be allowed to a lending
institution in an amount equal to the difference between:
(a) The amount of finance charge charged by the lending
institution during the taxable year at an annual rate less than
the market rate for a loan that is made on or after January 1,
1990, and before January 1, 2000, that complies with the
requirements of this section; and
(b) The amount of finance charge that would have been charged
during the taxable year by the lending institution for the loan
for housing construction, development or rehabilitation measured
at the annual rate charged by the lending institution for
nonsubsidized loans made under like terms and conditions at the
time the loan for housing construction, development or
rehabilitation is made.
(2) The maximum difference between the amounts described in
subsection (1)(a) and (b) of this section shall not exceed four
percent of the average unpaid balance of the loan during the tax
year for which the credit is claimed.
(3) Any tax credit otherwise allowable under this section that
is not used by the taxpayer in a particular year may be carried
forward and offset against the taxpayer's tax liability for the
next succeeding tax year. Any credit remaining unused in such
next succeeding tax year may be carried forward and used in the
second succeeding tax year, and likewise, any credit not used in
that second succeeding tax year may be carried forward and used
in the third succeeding tax year, and any credit not used in that
third succeeding tax year may be carried forward and used in the
fourth succeeding tax year, and any credit not used in that
fourth succeeding tax year may be carried forward and used in the
fifth succeeding tax year, but may not be carried forward for any
tax year thereafter.
(4) In order to be eligible for the tax credit allowed under
subsection (1) of this section, the loan shall be:
(a)(A) Made to a qualified borrower;
(B) Used to finance construction, rehabilitation or development
of housing; and
Enrolled House Bill 3543 (HB 3543-INTRO) Page 1
(C) Accompanied by a written certification by the Housing and
Community Services Department that the:
(i) Housing created by the loan is or will be occupied by
households earning less than 80 percent of the area median
income; and
(ii) Full amount of savings from the reduced interest rate
provided by the lending institution is or will be passed on to
the tenants in the form of reduced housing payments, regardless
of other subsidies provided to the housing project; or
(b) Made to an individual or individuals who own the dwelling,
participate in an owner occupied community rehabilitation program
and are certified by the local government or its designated agent
as having an income level at the time the loan is made of less
than 80 percent of the area median income; or
(c) Made to refinance a loan that meets the criteria stated in
paragraph (a) or (b) of this subsection.
(5) In order to be eligible for the tax credit allowed under
subsection (1) of this section, the loan also shall be
accompanied by a written certification by the Housing and
Community Services Department that:
(a) Specifies the period, as determined by the department,
during which the loan is eligible for the tax credit under
subsection (1) of this section; and
(b) States that the loan is within the limitation imposed by
subsection (6) of this section.
(6)(a) The Housing and Community Services Department may
certify loans that are eligible under subsection (4) of this
section if the total credits attributable to all loans eligible
for credits under subsection (1) of this section and then
outstanding do not exceed { - $3 - } { + $4 + } million for
any { - tax - } year. In making loan certifications, the
department shall attempt to distribute the tax credits statewide,
but shall concentrate the tax credits in those areas of the state
that are determined by the State Housing Council to have the
greatest need for affordable housing.
(b) The certification under subsection (5) of this section
shall state the period for which the credit will be allowed,
which shall not exceed 20 years.
(7) The credit allowed in this section shall not be affected by
the applicant's receipt of a credit under section 42 of the
Internal Revenue Code (low-income housing tax credit program).
(8) A loan meeting the requirements of subsections (4) and (5)
of this section may be sold to a qualified assignee with or
without the lending institution's retaining servicing of the loan
so long as a designated lending institution maintains records
annually verified by a loan servicer that establish the amount of
tax credit earned by the taxpayer throughout each year of
eligibility.
(9) As used in this section, the following definitions shall
apply:
(a) 'Annual rate' means the yearly interest rate specified on
the note, and not the annual percentage rate, if any, disclosed
to the applicant to comply with the federal Truth in Lending Act.
(b) 'Finance charge' means the total of all interests, loan
fees and other charges related to the cost of obtaining credit
and includes any interest on any loan fees financed by the
lending institution.
(c) 'Lending institution' means any bank, mortgage banking
company, federal savings bank, savings bank, stock savings bank,
savings and loan association, national bank or federal savings
Enrolled House Bill 3543 (HB 3543-INTRO) Page 2
and loan association maintaining an office in this state.
'Lending institution' also includes any community development
corporation, as defined in ORS 708.444 (4), that is organized
under the Oregon Nonprofit Corporation Law, and that meets the
conditions described in ORS 708.444 (2)(a) and (e).
(d) 'Qualified assignee' means any investor participating in
the secondary market for real estate loans.
(e) 'Qualified borrower' means any borrower that is a
sponsoring entity that has a controlling interest in the real
property that is financed by the loan described in subsection (4)
of this section. Such a controlling interest includes, but is not
limited to, a controlling interest in the general partner of a
limited partnership that owns the real property.
(f) 'Sponsoring entity' means a nonprofit corporation, state
governmental entity, local unit of government as defined in ORS
466.706, housing authority or any person as defined in ORS
174.100, including, but not limited to, an employer making
housing available to low-income employees and other low-income
persons, provided that the person has agreed to restrictive
covenants imposed by a nonprofit corporation, state governmental
entity, local unit of government or housing authority.
(10) Notwithstanding any other provision of law, a lending
institution that is a community development corporation as
defined in ORS 708.444 (4), that is organized under the Oregon
Nonprofit Corporation Law, and that meets the conditions
described in ORS 708.444 (2)(a) and (e), may transfer any part or
all of any tax credit arising under subsection (1) of this
section to one or more other lending institutions that are
stockholders or members of the community development corporation
or that otherwise participate through the community development
corporation in the making of one or more loans that generate the
tax credit under subsection (1) of this section.
(11) The lending institution shall file an annual statement
with the Housing and Community Services Department, specifying
that it has conformed with all requirements imposed by law to
qualify for this tax credit.
(12) The Housing and Community Services Department and the
Department of Revenue may adopt rules to carry out the provisions
of this section.
SECTION 2. { + The amendments to ORS 317.097 by section 1 of
this Act apply to loan certifications occurring on or after
January 1, 1998. + }
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Enrolled House Bill 3543 (HB 3543-INTRO) Page 3
Passed by House May 9, 1997
...........................................................
Chief Clerk of House
...........................................................
Speaker of House
Passed by Senate June 3, 1997
...........................................................
President of Senate
Enrolled House Bill 3543 (HB 3543-INTRO) Page 4
Received by Governor:
......M.,............., 1997
Approved:
......M.,............., 1997
...........................................................
Governor
Filed in Office of Secretary of State:
......M.,............., 1997
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Secretary of State
Enrolled House Bill 3543 (HB 3543-INTRO) Page 5