This chapter establishes a construction excise tax (CET) on
commercial, industrial and residential improvements to provide funding
for affordable housing in the City of Milwaukie.
(Ord. 2154 § 1, 2017)
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 for the city
as defined by the United States Department of Housing and Urban Development
as adjusted and published periodically.
means revenues remaining after refunds and the administrative
fees described in Section 3.60.130.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 shall 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. 2154 § 1, 2017)
The City Manager or designee 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. 2154 § 1, 2017)
A.
Each
person who obtains a permit to construct a commercial improvement
in the City of Milwaukie shall pay a commercial construction excise
tax (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 of Milwaukie shall pay a residential construction excise
tax (CET) in the amount of one percent of the value of the improvement.
C.
The
construction excise tax (CET) shall be due and paid at the time of
issuance of a building permit.
(Ord. 2154 § 1, 2017)
A.
Notwithstanding Section 3.60.040, the construction excise tax (CET) shall not be imposed on the following:
1.
Residential
housing units, including detached housing and market rate multifamily
housing projects, that are subject to a deed restriction or other
mechanism acceptable to the City ensuring that the unit(s),or a portion
of the units in the case of a multifamily housing project, 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 30 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 shall 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 shall be determined based on the median family income
for the prior calendar year. Multifamily housing project must demonstrate
to the satisfaction of the City Manager or designee the financial
impact to the developer of the deed restricted units exceeds the CET
that would have been otherwise imposed on the project by at least
twice the amount being exempted.
2.
Accessory
Dwelling Units
This exemption expires automatically on the date that is the
fifth anniversary of the effective date of the ordinance codified
in this chapter. The construction excise tax (CET) shall apply to
all building permits for accessory dwelling units issued after that
date.
3.
Improvements
having a total improvement value of less than $100,000.
4.
Public
school improvements.
5.
Public
improvements as defined in ORS 279A.010.
6.
Public
or private hospital improvements.
7.
Improvements
to religious facilities primarily used for worship or education associated
with worship.
8.
Long-term
care facilities, as defined in ORS 442.015, operated by a not-for-profit
corporation.
9.
Residential
care facilities, as defined in ORS 443.400, operated by a not-for-profit
corporation.
10.
Continuing care retirement communities, as defined in ORS 101.020,
operated by a not-for-profit corporation.
11.
Any improvements required to be exempted from this construction excise
tax (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. 2154 § 1, 2017; Ord. 2190 § 1, 2020)
The City shall not issue a building permit to any person who
has failed to pay the construction excise tax (CET) unless the person
has paid the full amount alleged by the City to be due.
(Ord. 2154 § 1, 2017)
The exemption for affordable unit(s) provided in Section 3.60.050.A.1. automatically terminates if the unit(s) ceases to qualify as affordable at any time during the 30 year period of affordability. For purposes of this section, affordability shall be calculated using the median family income determination for the preceding calendar year. The construction excise tax (CET) immediately shall be due and payable to City as of the date the unit no longer qualifies as affordable, together with interest and penalties as provided in Section 3.60.090. The amount of the construction excise tax (CET) shall be calculated using the construction excise tax (CET) in effect at the time the unit(s) ceases to qualify. The person obligated to pay shall be the owner of record of the unit(s) at the time the unit(s) ceases to qualify. The seller and buyer, jointly and severally, shall be obligated to pay if the unit(s) 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. 2154 § 1, 2017)
A.
It is
a violation of this chapter for any person to fail to state or to
misstate the full value of the improvement.
B.
The
construction excise tax (CET) shall 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. 2154 § 1, 2017)
A.
Interest.
Interest shall be due on the entire amount that the City Manager or
designee determines has not been paid, assessed at the rate of 10%
per annum from the due date. Interest shall 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 5% of the otherwise
applicable construction excise tax (CET) liability shall be imposed
upon:
1.
Any
person who removes a unit from the affordability exemption provided
in Section 3.60.050.A.1 shall pay a penalty of 5% for each unit that
no longer is exempt.
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 shall be merged with and become a part of the construction
excise tax (CET) required to be paid under this chapter. This amount
becomes the new base for calculating new interest amounts.
(Ord. 2154 § 1, 2017)
The construction excise tax (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 3.60.040. The City has all remedies available at law and equity.
(Ord. 2154 § 1, 2017)
A.
The
City shall issue a refund to any person who has paid a construction
excise tax (CET) if:
1.
The person establishes that the tax was paid for improvements that were otherwise eligible for an exemption under Section 3.60.050 at the time of permit issuance;
2.
The
person establishes that construction of the improvements was not commenced
and the associated building permit has been cancelled by the City;
or
3.
The
City Manager or designee determines that the amount of any construction
excise tax (CET), penalty, or interest was erroneously collected or
paid to the City.
B.
The
City shall 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 shall 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 construction excise
tax (CET).
(Ord. 2154 § 1, 2017)
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
Community Development Director. The request for administrative review
must be in writing and received within 10 days of the determination,
and must include documentation supporting the request.
The Community Development Director's determination in the administrative
review shall be sent by regular mail.
B.
The
administrative review determination of the Community Development 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 Community Development
Director's determination. The notice shall describe the basis for
the appeal and the relief sought.
C.
The
filing of any notice of appeal shall not stay the effectiveness of
the written determination unless the City Manager so directs.
D.
Notwithstanding Section 3.60.060 the City may issue a building permit while an appeal is pending provided that the applicant posts with the City the full amount alleged by the City to be due. No interest shall accrue to the applicant on the deposit.
E.
The
City Manager shall provide a written decision by regular mail to the
person who filed the appeal. The City Manager's decision on appeal
shall be the City's final decision, subject to judicial review only
as provided in ORS 34.010 et seq.
(Ord. 2154 § 1, 2017)
A.
The
City may retain up to 4% of the tax collected for payment toward administrative
expenses related to collection and distribution of the tax.
B.
The
net revenue from the tax on residential improvements will be allocated
by the City as follows:
1.
Fifteen
percent of net revenue will be remitted to the Oregon Department of
Housing and Community Services to fund home ownership programs.
2.
Fifty
percent of net revenue to fund incentives for the development and
construction of affordable housing authorized by the City as provided
by state law.
3.
Thirty-five
percent of net revenue to fund programs and activities related to
affordable housing.
C.
The
net revenue from the tax on commercial improvements will be distributed
as follows:
1.
Fifty
percent to fund incentives for the development and construction of
housing that is affordable at up to 120% of median family income;
and
2.
Fifty
percent for economic development programs with an emphasis on areas
of the City that are subject to plans designated as eligible by the
City. The eligible plans as of the effective date of the ordinance
codified in this chapter are: Central Milwaukie Land Use and Transportation
Plan, Downtown and Riverfront Land Use Framework Plan, Milwaukie Urban
Renewal Plan, Economic Development Strategic Plan, and the North Milwaukie
Industrial Area Plan. Additional eligible plans may be designated
by the City Council.
(Ord. 2154 § 1, 2017)
