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 3768
B-Engrossed
Senate Bill 1036
Ordered by the House June 13
Including Senate Amendments dated May 8 and House Amendments
dated
June 13
Sponsored by Senator DECKERT; Senators BATES, BROWN, BURDICK,
DEVLIN, JOHNSON, METSGER, MONNES ANDERSON, MONROE, MORSE,
PROZANSKI, STARR, WALKER, WESTLUND, WINTERS, Representatives
BERGER, BEYER, BONAMICI, BOONE, BRUUN, BUCKLEY, BURLEY, CANNON,
CLEM, DALLUM, DINGFELDER, FLORES, GALIZIO, GILLIAM, GREENLICK,
HANNA, HOLVEY, HUNT, KOMP, KRUMMEL, MACPHERSON, MERKLEY, NOLAN,
READ, RILEY, ROBLAN, SCHAUFLER, SCOTT, SHIELDS, G SMITH, P
SMITH
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.
Restricts local government power to impose construction excise
taxes. Authorizes school districts to impose construction taxes.
Dedicates revenues from such taxes to capital construction.
{ + Authorizes school district to pledge construction taxes to
payment of obligations issued to finance or refinance capital
improvements.
Declares emergency, effective on passage. + }
A BILL FOR AN ACT
Relating to local government construction excise taxes; and
declaring an emergency.
Be It Enacted by the People of the State of Oregon:
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).
(7) Public or private improvements on brownfields, as defined
in ORS 285A.185, that:
(a) Are located in cities that serve as county seats and have a
population of more than 20,000 but fewer than 26,000 inhabitants,
according to the latest federal decennial census; and
(b) Have known or potential contamination from hazardous
substances as shown in the Environmental Cleanup Site Information
(ECSI) Database of the Department of Environmental Quality. + }
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 being necessary for the
immediate preservation of the peace, health and safety, an
emergency is declared to exist, and this 2007 Act takes effect on
its passage. + }
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