74th OREGON LEGISLATIVE ASSEMBLY--2007 Regular Session
NOTE: Matter within { + braces and plus signs + } in an
amended section is new. Matter within { - braces and minus
signs - } is existing law to be omitted. New sections are within
{ + braces and plus signs + } .
LC 3242
A-Engrossed
Senate Bill 984
Ordered by the Senate April 16
Including Senate Amendments dated April 16
Sponsored by Senator AVAKIAN; Representatives D EDWARDS,
SCHAUFLER
SUMMARY
The following summary is not prepared by the sponsors of the
measure and is not a part of the body thereof subject to
consideration by the Legislative Assembly. It is an editor's
brief statement of the essential features of the measure.
Adds loans made to finance construction, development or
acquisition of manufactured dwelling parks to loans eligible for
affordable housing tax credit. Adds loans made to finance
acquisition of affordable housing to loans eligible for
affordable housing tax credit. { + Adds loans made to finance
acquisition, or acquisition and rehabilitation, of housing
consisting of preservation project to loans eligible for
affordable housing tax credit. Defines 'preservation
project.' + } Increases monetary cap on allowable tax credit
certifications. Applies to tax credit certifications issued on or
after effective date of Act.
Takes effect on 91st day following adjournment sine die.
A BILL FOR AN ACT
Relating to tax credits for affordable housing; creating new
provisions; amending ORS 317.097; and prescribing an effective
date.
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 before January 1, 2020,
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 { + , acquisition + } 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 { + , acquisition + } or rehabilitation is made.
(2) The maximum amount of credit for the difference between the
amounts described in subsection (1)(a) and (b) of this section
may 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 the 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) 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 - }
(b)(A) Made to a qualified borrower;
(B) Used to finance construction, { + development, acquisition
or + } rehabilitation { - or development - } of housing; and
(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 { - . - }
{ + ; + }
{ + (c)(A) Made to a qualified borrower;
(B) Used to finance construction, development, acquisition, or
acquisition and rehabilitation of housing consisting of a
manufactured dwelling park; and
(C) Accompanied by a written certification by the Housing and
Community Services Department that the housing will continue to
be operated as a manufactured dwelling park during the period for
which the tax credit is allowed; or
(d)(A) Made to a qualified borrower;
(B) Used to finance acquisition, or acquisition and
rehabilitation, of housing consisting of a preservation project;
and
(C) Accompanied by a written certification by the Housing and
Community Services Department that the housing preserved by the
loan:
(i) Is or will be occupied by households earning less than 80
percent of the area median income; and
(ii) Has a rent assistance contract with the United States
Department of Housing and Urban Development or the United States
Department of Agriculture that will be maintained by the
qualified borrower. + }
(5) A loan made to refinance a loan that meets the criteria
stated in subsection (4) of this section shall be treated the
same as a loan that meets the criteria stated in subsection (4)
of this section.
(6) 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 Housing and
Community Services 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 (7) of this section.
(7)(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 { - $11 - } { + $13 + } million for
any { + fiscal + } year { + beginning before July 1, 2010, or
$15 million for any fiscal year beginning on or after July 1,
2010 + }. In making loan certifications, the Housing and
Community Services 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 (6) of this section
shall state the period for which the credit will be allowed,
which may not exceed 20 years.
(8) The applicant's receipt of a credit under section 42 of the
Internal Revenue Code does not affect the credit allowed under
this section.
(9) A loan meeting the requirements of subsections (4) and (6)
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.
(10) As used in this section:
(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 interest, loan
fees, interest on any loan fees financed by the lending
institution, and other charges related to the cost of obtaining
credit.
(c) 'Lending institution' means any insured institution, as
that term is defined in ORS 706.008, any mortgage banking company
that maintains an office in this state or any community
development corporation that is organized under the Oregon
Nonprofit Corporation Law.
{ + (d) 'Manufactured dwelling park' has the meaning given
that term in ORS 446.003.
(e) 'Nonprofit corporation' means a corporation that is exempt
from income taxes under section 501(c)(3) or (4) of the Internal
Revenue Code as amended and in effect on December 31, 2006.
(f) 'Preservation project' means housing that was previously
developed as affordable housing with a contract for rent
assistance from the United States Department of Housing and Urban
Development or the United States Department of Agriculture and
that is being acquired by a sponsoring entity. + }
{ - (d) - } { + (g) + } 'Qualified assignee' means any
investor participating in the secondary market for real estate
loans.
{ - (e) - } { + (h) + } '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) - } { + (i) + } 'Sponsoring entity' means a
nonprofit corporation, { + nonprofit cooperative, + } state
governmental entity, local unit of government as defined in ORS
466.706, housing authority or any other person, provided that the
person has agreed to restrictive covenants imposed by a nonprofit
corporation, { + nonprofit cooperative, + } state governmental
entity, local unit of government or housing authority.
(11) Notwithstanding any other provision of law, a lending
institution that is a community development corporation organized
under the Oregon Nonprofit Corporation Law 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.
(12) 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.
(13) 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 2007 Act apply to tax credit certifications issued on or
after the effective date of this 2007 Act. + }
SECTION 3. { + 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. + }
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