Chapter 829
AN ACT
SB 1036
Relating to local government construction excise taxes; and prescribing
an effective date.
Be It Enacted by the People of
the State of
SECTION 1. (1) A local government or local service
district, as defined in ORS 174.116, or a special government body, as defined
in ORS 174.117, may not impose a tax on the privilege of constructing
improvements to real property except as provided in sections 2 to 8 of this
2007 Act.
(2) Subsection (1) of
this section does not apply to:
(a) A tax that is in
effect as of May 1, 2007, or to the extension or continuation of such a tax,
provided that the rate of tax does not increase from the rate in effect as of
May 1, 2007;
(b) A tax on which a
public hearing was held before May 1, 2007; or
(c) The amendment or
increase of a tax adopted by a county for transportation purposes prior to May
1, 2007, provided that the proceeds of such a tax continue to be used for those
purposes.
(3) For purposes of this
section and sections 2 to 8 of this 2007 Act, construction taxes are limited to
privilege taxes imposed under sections 2 to 8 of this 2007 Act and do not
include any other financial obligations such as building permit fees, financial
obligations that qualify as system development charges under ORS 223.297 to
223.314 or financial obligations imposed on the basis
of factors such as income.
SECTION 2. (1) Construction taxes may be imposed by a
school district, as defined in ORS 330.005, in accordance with sections 2 to 8
of this 2007 Act.
(2) Notwithstanding
subsection (1) of this section, construction taxes imposed by a school district
may be collected by another local government, local service district or special
government body pursuant to a written agreement with a school district.
SECTION 3. Construction taxes may not be imposed on the
following:
(1) Private school
improvements.
(2) Public improvements
as defined in ORS 279A.010.
(3) Residential housing
that is guaranteed to be affordable, under guidelines established by the United
States Department of Housing and Urban Development, to households that earn no
more than 80 percent of the median household income for the area in which the
construction tax is imposed, for a period of at least 60 years following the date
of construction of the residential housing.
(4) Public or private
hospital improvements.
(5) Improvements to
religious facilities primarily used for worship or education associated with
worship.
(6) Agricultural
buildings, as defined in ORS 455.315 (2)(a).
SECTION 4. (1) Construction taxes imposed under
sections 2 to 8 of this 2007 Act may be imposed only on improvements to real
property that result in a new structure or additional square footage in an
existing structure and may not exceed:
(a) $1 per square foot
on structures or portions of structures intended for residential use, including
but not limited to single-unit or multiple-unit housing; and
(b) $0.50 per square
foot on structures or portions of structures intended for nonresidential use, not
including multiple-unit housing of any kind.
(2) In addition to the
limitations under subsection (1) of this section, a construction tax imposed on
structures intended for nonresidential use may not exceed $25,000 per building
permit or $25,000 per structure, whichever is less.
(3)(a) For years
beginning on or after June 30, 2009, the limitations under subsections (1) and
(2) of this section shall be adjusted for changes in construction costs by
multiplying the limitations set forth in subsections (1) and (2) of this
section by the ratio of the averaged monthly construction cost index for the
12-month period ending June 30 of the preceding calendar year over the averaged
monthly construction cost index for the 12-month period ending June 30, 2008.
(b) The Department of
Revenue shall determine the adjusted limitations under this section and shall
report those limitations to entities imposing construction taxes. The
department shall round the adjusted limitation under subsection (2) of this
section to the nearest multiple of $100.
(c) As used in this
subsection, “construction cost index” means the Engineering News-Record
Construction Cost Index, or a similar nationally recognized index of
construction costs as identified by the department by rule.
SECTION 5. (1) A school district imposing a
construction tax shall impose the tax by a resolution adopted by the district
board of the school district. The resolution shall state the rates of tax,
subject to section 4 of this 2007 Act.
(2) Prior to adopting a
resolution under subsection (1) of this section, a school district shall enter
into an intergovernmental agreement with each local government, local service
district or special government body collecting the tax that establishes:
(a) Collection duties and
responsibilities;
(b) The specific school
district accounts into which construction tax revenues are to be deposited and
the frequency of such deposits; and
(c) The amount of the
administrative fee that the entity collecting the tax may retain to recoup its
expenses in collecting the tax, not to exceed one percent of tax revenues.
SECTION 6. (1) After deducting the costs of
administering a construction tax and payment of refunds of such taxes, a school
district shall use net revenues only for capital improvements.
(2) A construction tax
may not be imposed under sections 2 to 8 of this 2007 Act unless the school
district imposing the tax develops a long-term facilities plan for making
capital improvements. The plan shall be adopted by resolution of the district
board of the school district.
(3) As used in this
section, “capital improvements”:
(a) Means:
(A) The acquisition of
land;
(B) The construction,
reconstruction or improvement of school facilities;
(C) The acquisition or
installation of equipment, furnishings or other tangible property;
(D) The expenditure of
funds for architectural, engineering, legal or similar costs related to capital
improvements and any other expenditures for assets that have a useful life of
more than one year; or
(E) The payment of
obligations and related costs of issuance that are issued to finance or
refinance capital improvements.
(b) Does not include
operating costs or costs of routine maintenance.
SECTION 7. A school district may pledge construction
taxes to the payment of obligations issued to finance or refinance capital
improvements as defined in section 6 of this 2007 Act.
SECTION 8. Construction taxes shall be paid by the
person undertaking the construction at the time that a permit authorizing the
construction is issued.
SECTION 9. Section 1 of this 2007 Act is repealed on
January 2, 2018.
SECTION 10. This 2007 Act takes effect on the 91st day
after the date on which the regular session of the Seventy-fourth Legislative
Assembly adjourns sine die.
Approved by the Governor July 17, 2007
Filed in the office of Secretary of State July 19, 2007
Effective date September 27, 2007
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