This chapter establishes a construction excise tax ("CET") on commercial and residential improvements to provide funding for affordable housing in the City of Tigard.
(Ord. 19-16 §1)
As used in this chapter, unless the context requires otherwise:
means a second or third dwelling unit on the same lot as a primary dwelling unit, either attached to or detached from the primary unit, and with separate facilities for sleeping, cooking, and sanitation in accordance with the building code adopted pursuant to TMC 14.04.
means the building official for the City of Tigard, or designee.
means the City of Tigard, Oregon.
means the city manager for the City of Tigard, or designee.
means any structure designed or intended to be used, or actually used, for occupancy for other than residential purposes and includes structures otherwise categorized or described as industrial.
means erecting, constructing, enlarging, altering, repairing, improving, or converting any building or structure for which the issuance of a building permit is required pursuant to the provisions of Oregon law.
means any improvements to real property resulting in a new structure, additional square footage added to an existing structure, or additional living space to an existing structure.
means median family income by household size as defined annually by the Housing and Urban Development (HUD) for the Portland-Vancouver Metropolitan Statistical Area (MSA).
means revenues remaining after refunds and the administrative fees described in Section 3.90.080.A are deducted from the total construction excise tax collected.
means any structure designed or intended to be used, or actually used, for occupancy for residential purposes including any residential structure, dwelling, or dwelling unit.
means the total value of the improvement as determined by the construction permit(s) or building permit(s) for the improvement, regardless of the number of separate permits issued. The city building official will calculate the total value in accordance with OAR 918-050-0100, Statewide Fee Methodologies for Residential and Commercial Permits, or as otherwise provided by law.
(Ord. 19-16 §1; Ord. 23-05 §2)
A.
Each person who obtains a permit to construct a commercial improvement in the city must pay a commercial CET in the amount of one percent of the value of the improvement.
B.
Each person who obtains a permit to construct a residential improvement in the city must pay a residential CET in the amount of one percent of the value of the improvement.
C.
The CET is due and must be paid at the time of issuance of a building permit. The CET amount is assessed at the time of submittal of a building permit application.
(Ord. 19-16 §1)
The city manager is responsible for the implementation, administration, and enforcement of this chapter. The city manager may adopt such policies and procedures as are necessary to efficiently and effectively carry out that responsibility, consistent with the provisions of this chapter.
(Ord. 19-16 §1)
A.
Notwithstanding TMC 3.90.030, the following are exempt from payment of the CET:
1.
Residential housing units, including detached housing, that are subject to a deed restriction or other mechanism acceptable to the city ensuring that the unit(s) are affordable under guidelines established by the United States Department of Housing and Urban Development, to households that earn no more than 80% of the median household income for a period of at least 20 years following the date of issuance of the building permit on which the improvement value is based and that remain affordable. For purposes of the initial determination of eligibility for this exemption, the city will use the median family income for the year prior to the date of issuance of the permit on which the improvement value is based. Continuing affordability will be determined based on the median family income for the prior calendar year.
2.
Accessory dwelling units of 1,000 square feet or less. This exemption is repealed automatically on July 31, 2027, after which date the full CET value will be assessed.
3.
Construction or improvements having a total improvement value of less than $50,000.00.
4.
Construction or improvements to a residential structure that was partially or completely destroyed by unintentional means, such as fire or act of nature, where such construction or improvement results in a net increase of living area of 10% or less over the living area of the destroyed structure.
5.
Cottage clusters, courtyard units, and quads, as defined by Chapters 18.30 and 18.200 of the Tigard Community Development Code, from 75% of the CET. The remaining 25% is due and payable as provided in Section 3.90.030.C. This exemption is repealed automatically on July 31, 2027, after which date the full CET value will be assessed.
6.
Public and private school improvements.
8.
Public or private hospital improvements.
9.
Improvements to religious facilities primarily used for worship or education associated with worship.
11.
Residential care facilities, as defined in ORS 443.400, operated by a not-for-profit corporation.
12.
Continuing care retirement communities, as defined in ORS 101.020, operated by a not-for-profit corporation.
13.
Any improvements required to be exempted from this CET by state law.
B.
The city may require any person seeking an exemption to demonstrate that the improvement is eligible for an exemption and to establish all necessary facts to support the exemption.
(Ord. 19-16 §1; Ord. 23-05 §2)
The city may not issue a building permit to any person required to pay the CET unless the person has paid the full amount of CET alleged by the city to be due.
(Ord. 19-16 §1)
The exemption for affordable units provided in Section 3.90.050.A.1. automatically terminates if the unit ceases to qualify as affordable at any time during the 20-year period of affordability. For purposes of this section, affordability is calculated using the median family income determination for the preceding calendar year. At any time, if the exemption terminates, the CET will immediately be due and payable as of the date the unit no longer qualifies as affordable, together with interest and penalties as provided in Section 3.90.100. The amount of the CET will be calculated using the CET in effect at the time the unit ceases to qualify. The owner of record of the unit at the time the unit ceases to qualify will be obligated to pay. The seller and buyer, jointly and severally, will be obligated to pay if the unit ceases to qualify as the result of a sale, including a sale to a person occupying or intending to occupy the unit whose income exceeds the median family income determination for the prior year.
(Ord. 19-16 §1)
A.
The city may retain up to four percent of the tax collected for payment toward administrative expenses related to collection and distribution of the tax.
B.
After deducting the administrative fee authorized by subsection A, the net revenue from the tax on residential improvements will be allocated by the city as follows:
1.
15% of net revenue will be remitted to the Oregon Department of Housing and Community Services to fund home ownership programs.
2.
50% of net revenue will fund incentives for the development and construction of affordable housing authorized by the city as provided by state law.
3.
35% of net revenue will fund programs and activities related to affordable housing.
(Ord. 19-16 §1)
A.
It is a violation of this chapter for any person to fail to state or to misstate the full value of any improvement.
B.
Additional CET will be due on any increase in the value of the improvement arising from the value having been understated or arising from construction changes that result in increased building permit fees.
(Ord. 19-16 §1)
A.
Interest. Interest will be due on the entire amount that the city manager determines has not been paid and assessed at the rate of 10% per annum from the due date. Interest will be assessed to the 15th day of the month following the due date. Interest amounts properly assessed in accordance with this section may not be waived or reduced by the city manager.
B.
Penalties. In addition to assessing interest, a penalty of five percent of the otherwise applicable CET liability will be imposed upon:
1.
Any person who removes one or more units from the affordability exemption in Section 3.90.050.A.1.
2.
Any person who intentionally fails to state the full value of an improvement.
3.
Any person who fails to pay the full amount of the tax, interest, and any penalty within 30 days of notice from the city that the tax is due.
C.
Penalties and Interest Merged with Tax. Any accrued interest and imposed penalties under this section will be merged with and become a part of the CET required to be paid under this chapter. This amount becomes the new base for calculating new interest amounts.
(Ord. 19-16 §1)
The CET, and any assessed interest and penalties, due and owing under this chapter constitutes a debt owing to the city by the person liable for the tax as set forth in Section 3.90.040. The city has all remedies available at law and equity.
(Ord. 19-16 §1)
A.
The city will issue a refund to any person who has paid a CET if:
1.
The person establishes that the tax was paid for improvements that were otherwise eligible for an exemption under Section 3.90.050 at the time of permit issuance;
2.
The person establishes that construction of the improvements had not begun and the associated building permit was cancelled by the city; or
3.
The city manager determines that the amount of any CET, penalty, or interest was erroneously collected or paid to the city.
B.
The city will either refund all amounts due within 30 days of a complete request for the refund or give written notice of the reasons why the request has been denied. Claims for refunds must be made upon forms provided by the city. The request for the refund must be submitted within three years from the date of payment of the CET.
(Ord. 19-16 §1)
A.
A person who objects to a determination issued by the city applying the provisions of this chapter may file for review of the determination by the city's finance director. The request for administrative review must be in writing, received within 10 days of the determination, and must include documentation supporting the request. The finance director's determination in the administrative review will be sent by regular mail.
B.
The administrative review determination of the finance director may be appealed to the city manager by filing a notice of appeal with the city manager within 10 days of issuance of the finance director's determination. The notice must describe the basis for the appeal and the relief sought.
C.
The filing of any notice of appeal does not stay the effectiveness of the written determination unless the city manager so directs.
(Ord. 19-16 §1)