71st OREGON LEGISLATIVE ASSEMBLY--2001 Regular Session
 
HA to HB 2204
 
LC 1228/HB 2204-3
 
                       HOUSE AMENDMENTS TO
                         HOUSE BILL 2204
 
     By COMMITTEE ON SCHOOL FUNDING AND TAX FAIRNESS/REVENUE
 
                              May 9
 
  On page 1 of the printed bill, line 2, after 'taxation ' insert
a period and delete the rest of the line and line 3.
  Delete lines 5 through 30 and delete pages 2 and 3 and insert:
  '  { +  SECTION 1. + }  { + Sections 2 to 9 of this 2001 Act
are added to and made a part of ORS chapter 308. + }
  '  { +  SECTION 2. + }  { + As used in sections 2 to 9 of this
2001 Act:
  ' (1) 'Government restriction on use' means a restriction that
limits the use of multiunit rental housing to qualified income
rental housing in order to receive a government incentive,
including but not limited to the following government incentives:
  ' (a) A low income housing tax credit under section 42 of the
Internal Revenue Code;
  ' (b) Financing derived from exempt facility bonds for
qualified residential rental projects under section 142 of the
Internal Revenue Code;
  ' (c) A low interest loan under section 235 or 236 of the
National Housing Act (12 U.S.C. 1715z or 1715z-1) or under 42
U.S.C. 1485;
  ' (d) A government rent subsidy; and
  ' (e) A government guaranteed loan.
  ' (2) 'Multiunit rental housing' means residential property
consisting of four or more dwelling units and the common areas
and land associated with the dwelling units. + }
  '  { +  SECTION 3. + }  { + An owner of multiunit rental
housing that is subject to a government restriction on use may
choose, at the discretion of the owner, to have the multiunit
rental housing assessed under the special assessment provided in
section 4 of this 2001 Act or may choose to have the multiunit
rental housing assessed under the ordinary methods of assessing
property in this state. Multiunit rental housing that is subject
to a government restriction on use is not required to be assessed
under the special assessment provided in section 4 of this 2001
Act. + }
  '  { +  SECTION 4. + }  { + (1) The specially assessed value,
maximum assessed value and assessed value of multiunit rental
housing shall be determined under this section if:
  ' (a) The property is subject to a government restriction on
use; and
  ' (b) The owner of the property has filed an application for
special assessment under section 5 of this 2001 Act and that
application has been approved.
  ' (2) The specially assessed value of property assessed under
this section shall be determined in the manner elected by the
property owner under section 6 of this 2001 Act.
  ' (3)(a) For the first tax year for which property is assessed
under this section, the maximum assessed value of property
subject to special assessment under this section shall equal the
product of the specially assessed value of the property under
subsection (2) of this section multiplied by the ratio, not
greater than 1.00, of the average maximum assessed value to the
average real market value of property in the same area and
property class as the specially assessed property.
  ' (b) For each tax year after the first tax year in which the
property is assessed under this section and prior to any
disqualification from special assessment, the maximum assessed
value of property assessed under this section shall equal 103
percent of the property's assessed value from the prior year or
100 percent of the property's maximum assessed value from the
prior year, whichever is greater.
  ' (c) If omitted property is added to the property assessed
under this section or a lot line adjustment is made to property
assessed under this section, the maximum assessed value of
property subject to special assessment under this section shall
be determined as prescribed in ORS 308.149 to 308.166,
substituting the specially assessed value under subsection (2) of
this section for real market value.
  ' (4) The assessed value of property subject to special
assessment under this section shall equal the lesser of:
  ' (a) The specially assessed value of the property determined
under subsection (2) of this section; or
  ' (b) The maximum assessed value of the property determined
under subsection (3) of this section.
  ' (5) For each tax year following the first tax year in which
property is subject to special assessment under this section, the
owner of the multiunit rental housing must comply with any
requirements prescribed by the Department of Revenue by rule for
the continued special assessment of the property under this
section.
  ' (6) The definitions in ORS 308.149 apply to this section. + }
  '  { +  SECTION 5. + }  { + (1) An owner of multiunit rental
housing seeking to have the property assessed under section 4 of
this 2001 Act must file a written application under this section.
  ' (2) Except as provided in subsection (3) of this section, an
application, and an election form as described in section 6 of
this 2001 Act, must be filed with the county assessor on or
before April 1 preceding the first tax year for which special
assessment under section 4 of this 2001 Act is sought.
  ' (3) An application and election form may be filed after April
1 and on or before December 31 of the first tax year for which
special assessment under section 4 of this 2001 Act is sought, if
the application and election form are accompanied by a late
filing fee equal to the greater of $200 or one-tenth of one
percent of the real market value of the property to which the
application relates, as of the assessment date for that tax year.
  ' (4) The application must be in the form and contain the
information prescribed by the Department of Revenue, including:
  ' (a) The name and address of the property owner;
  ' (b) The address and tax lot or account number of the
multiunit rental housing;
  ' (c) A description and documentation of the government
restriction on use to which the multiunit rental housing is
subject, including but not limited to a deed declaration,
restrictive covenant, contractual agreement or other legally
binding government restriction on use; and
  ' (d) The anticipated duration of the government restriction on
use.
  ' (5) A completed election form under section 6 of this 2001
Act, and an accompanying income and expense statement (if
available), must be submitted simultaneously with an application
filed under this section and is considered to be a part of the
application. The election shall apply to each tax year for which
the property is subject to special assessment under section 4 of
this 2001 Act, unless the owner changes the election as described
in section 6 (2) of this 2001 Act.
 
  ' (6) The county assessor shall review the application. If the
assessor determines that the property consists of multiunit
rental housing that is subject to a government restriction on
use, the assessor shall approve the application. Approval of the
application shall result in the property to which the application
relates being qualified to be assessed under section 4 of this
2001 Act.
  ' (7) The county assessor shall notify the applicant in writing
of the assessor's determination within 120 days following the
date the application was filed with the assessor.
  ' (8) An applicant may appeal the determination of the county
assessor as provided in ORS 305.275. + }
  '  { +  SECTION 6. + }  { + (1) The owner of multiunit rental
housing that is subject to a government restriction on use and
that is to be assessed under section 4 of this 2001 Act must
elect the method by which the specially assessed value of the
property is to be determined. The property owner must elect one
of the following methods to determine the specially assessed
value of the property:
  ' (a) Through an annual special assessment net operating income
approach to value that uses actual income and operating expenses
that are based on the actual history of the property (if
available), excluding income and expenses of a nonrecurring
nature, and a capitalization rate. The income, expenses and
capitalization rate used must be consistent with the Uniform
Standards of Professional Appraisal Practice and may be further
defined by rules adopted by the Department of Revenue. Factors to
be considered in setting a capitalization rate include the risks
associated with multiunit rental housing subject to a government
restriction on use, including but not limited to diminished
ownership control, income generating potential and liquidity. The
capitalization rate that is set pursuant to this paragraph must
be equal to or greater than the capitalization rate used for
valuing multiunit rental housing that is not subject to a
government restriction on use;
  ' (b) By adjusting the real market value of the property being
specially assessed, computed without regard to any government
restriction on use applicable to the property, by the ratio of
the average annual rent of those dwelling units of the property
that are subject to a government restriction on use to the
average annual rent of comparable multiunit rental housing that
is not subject to a government restriction on use; or
  ' (c) Through an alternate method for determining the specially
assessed value of multiunit rental housing that is subject to a
government restriction on use that is adopted by the department
by rule.
  ' (2)(a) An election under this section must be made at the
time an application for special assessment is filed under section
5 of this 2001 Act, and is considered to be a part of the
application.
  ' (b) A property owner may change the election the owner
previously made. Except as provided in subsection (3) of this
section, a new election under this section must be made on or
before April 1 preceding the tax year for which the new election
applies. The election shall be made in writing to the county
assessor of the county in which the property is located, in the
form prescribed by the department.
  ' (c) The election form must be accompanied by a written
statement of the actual income and operating expenses of the
property, as described in subsection (1)(a) of this section.
  ' (3) A change in election may be made after April 1 and on or
before December 31 of the tax year, if the election form is
accompanied by a late filing fee equal to the greater of $200 or
one-tenth of one percent of the real market value of the property
to which the election relates, as of the assessment date for that
tax year. + }
  '  { +  SECTION 7. + }  { + (1) An owner of property assessed
under section 4 of this 2001 Act must notify the county assessor
if:
  ' (a) The property is no longer multiunit rental housing that
is subject to a government restriction on use;
  ' (b) New property is constructed at the location of the
multiunit rental housing, or new improvements are made to the
multiunit rental housing;
  ' (c) An event described in ORS 308.146 (3)(b) or (c) occurs
with respect to the multiunit rental housing; or
  ' (d) The owner chooses not to have the property assessed under
section 4 of this 2001 Act.
  ' (2) The notification must be made within 60 days following
the date on which the circumstance described in subsection (1) of
this section occurred.
  ' (3) The notification must be made in writing and must
indicate the date on which the circumstance described in
subsection (1) of this section occurred.
  ' (4) The Department of Revenue may by rule prescribe penalties
to be imposed on a property owner if notification is not made as
required by subsections (1) to (3) of this section.
  ' (5)(a) Property shall be disqualified from special assessment
under section 4 of this 2001 Act as of the tax year immediately
following any change, event or choice described in subsection
(1)(a), (c) or (d) of this section.
  ' (b) Following disqualification for any change or event
described in subsection (1)(a) or (c) of this section, a property
owner may apply for special assessment pursuant to section 5 of
this 2001 Act.
  ' (c) Following disqualification for a choice described in
subsection (1)(d) of this section, a property owner may reapply
only once for special assessment pursuant to section 5 of this
2001 Act within the 10-year period following the year in which
the property was first qualified for special assessment. An owner
may not reapply for special assessment pursuant to section 5 of
this 2001 Act after the end of that 10-year period.
  ' (6) New property constructed at the location of the multiunit
rental housing or new improvements made to the multiunit rental
housing may qualify for special assessment under section 4 of
this 2001 Act only if the property owner files an application
under section 5 of this 2001 Act in the time and manner
prescribed by section 5 of this 2001 Act. Notwithstanding section
6 of this 2001 Act, the new property or new improvements, if
otherwise qualified for special assessment, must be specially
assessed using the method elected by the property owner for the
existing multiunit rental housing.
  ' (7) As used in this section, 'new property or new
improvements' has the meaning given that term in ORS 308.149. + }
  '  { +  SECTION 8. + }  { + ORS 306.353 to 306.359 do not apply
to sections 2 to 9 of this 2001 Act. + }
  '  { +  SECTION 9. + }  { + The Department of Revenue shall
prescribe rules implementing the provisions of section 6 (1)(a)
of this 2001 Act.  The department may prescribe any other rules
necessary to administer the provisions of sections 2 to 9 of this
2001 Act, including rules establishing one or more alternative
methods for determining the specially assessed value of multiunit
rental housing under section 6 (1)(c) of this 2001 Act. + }
  '  { +  SECTION 10. + }  { + Sections 2 to 9 of this 2001 Act
apply to property tax years beginning on or after July 1,
2002. + } ' .
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