Chapter 3.101 Property Tax Exemption for Low Income Housing Held by Charitable Non-Profit Organizations


- Note

 (Chapter added by Ordinance No. 157768, effective August 29, 1985.)


3.101.010 Definitions.

(Amended by Ordinance Nos. 167356, 182671 and 185043, effective December 7, 2011.)  As used in this Chapter:

 

A.  “Low income” means income at or below 60 percent of the area median income as determined by the State Housing Council based on information from the United States Department of Housing and Urban Development.

 

B.  “Eligible property” means land and improvements thereon:

 

1.  Which are either single or multi‑family residential units intended for the exclusive occupancy by low-income persons during the tax year for which approval of the application has been granted or properties which are not residential units but which will become residential units through rehabilitation improvements or new construction to be occupied by low-income persons;

 

2.  Which are owned, being purchased, or held under leasehold interest in the property which meet the standards of Subsections 3.101.030 B. 1.-2. by a charitable organization and non‑profit corporation for the purpose of occupancy by low‑income persons as described in 26 U.S.C. Section 501 (c) (3) or (4) as amended before December 1, 1984, pursuant to ORS 307.540 to 307.548; and

 

3.  Which the owner or leaseholder has met all eligibility requirements and made all required agreements described in this Chapter.


3.101.020 Eligible Organizations.

(Amended by Ordinance No. 185043, effective December 7, 2011.)  “Eligible organizations” means only charitable non‑profit corporations certified by the Internal Revenue Service of the federal government as a 501 (c) (3) or (4) organization which also provides housing for occupancy by low‑income persons as defined by Section 3.101.010 in this Chapter.  No other types of non‑profit or for‑profit organizations are eligible.


3.101.030 Eligible Property.

(Amended by Ordinance Nos. 167356 and 185043, effective December 7, 2011.)  As used in this Chapter:

 

A.  “Eligible property” as defined in Subsections 3.101.010 B. 1.-3. which meets all of the following criteria, pursuant to ORS 307.541, and other conditions of this Chapter shall be exempt from taxation:

 

1.  The property is owned or being purchased by a corporation that is exempt from income taxes under 26 U.S.C. Section 501 (c) (3) or (4) as amended before December 1, 1984, pursuant to ORS 307.541(a);

 

2.  Upon liquidation, the assets of the corporation are required to be applied first in payment of all outstanding obligations, and the balance remaining, in cash and in kind, to be distributed to corporations exempt from taxation and operated exclusively for religious, charitable, scientific, literary, or educational purposes or to the State of Oregon;

 

3.  The property is occupied by low‑income persons as defined by ORS 307.540(2) or held for future development for low income housing pursuant to ORS 307.541(1)(c)(B).

 

4.  The property or portion of the property receiving the exemption is actually and exclusively used for the purposes described in 26 U.S.C. Section 501 (c) (3) or (4) as amended before December 1, 1984.

 

5.  The exemption has been approved as provided in Section 3.101.040 and 3.101.050 of this Chapter.

 

B.  For the purposes of this Chapter, pursuant to ORS 307.541(2), a corporation that has only a leasehold interest in property is deemed to be a purchaser of that property if:

 

1.  The corporation is obligated under the terms of the lease to pay the ad valorem taxes on the real and personal property used in this activity on that property; or

 

2.  The rent payable by the corporation has been established to reflect the savings resulting from the exemption from taxation.

 

C.  Pursuant to ORS 307.541(3), a partnership shall be treated the same as a corporation if the corporation is a general partner of the partnership and responsible for the day-to-day operation of the property that is the subject of the exemption.


3.101.040 Application Procedure.

(Amended by Ordinance Nos. 167356, 182671 and 185043, effective December 7, 2011.)

 

A.  To qualify for the exemption the corporation shall file an application for exemption with the Portland Housing Bureau acting on behalf of the City of Portland for each assessment the year the corporation wants the exemption.  The application shall be filed on or before April 1 of the assessment year for which the exemption is applied for, except that when the property designated is acquired after April 1 and before July 1, the claim for that year shall be filed within 30 days after the date of acquisition.  The application shall include the following information:

 

1.  The applicant’s name, address, and telephone number;

 

2.  The assessor’s property account number for each site;

 

3.  The number of units and the exempted amount of each property being applied for under this Chapter;

 

4.  A description of the property for which the exemption is requested;

 

5.  A description of the charitable purpose of the project and whether all or a portion of the property is being used for that purpose;

 

6.  A description of how the tax exemption will benefit project residents; and

 

7.  A description of how the benefits in the case of leasehold interest in the eligible property accrue to the non‑profit and its resident tenants;

 

8.  A certification of income levels of low‑income occupants;

 

9.  A declaration that the corporation has been granted an exemption from income taxes under 26 U.S.C. Section 501 (c) (3) or (4) as amended before December 1, 1984;

 

10.  A description of the development of the property if the property is being held for future low income housing development; and

 

11.  Any other information required by state law or local law or otherwise which is reasonably necessary to effectuate the purposes of this Chapter at the time the application is submitted.

 

B.  The application shall include the following statements:

 

1.  That the applicant is aware of all requirements for property tax exemption imposed by this Chapter;

 

2.  That the applicant’s property qualified or, upon completion of the rehabilitation improvements and subsequent occupancy by low income, will qualify for exemption at the time of application approval or within 30 days of the April 1 application deadline;

 

3.  That the applicant acknowledges responsibility for compliance with the Code of the City of Portland regardless of whether the applicant obtains the exemption provided by this Chapter.

 

4.  The applicant shall furnish other information which is reasonably necessary to fulfill the objectives of this Chapter.

 

C.  The applicant shall verify the information in the application, in accordance with Subsections 3.101.040 B. 1. through 3. above, by oath or affirmation.

 

D.  Applicants for an exemption under this Chapter shall pay fees for an initial application and any renewals as set by the Portland Housing Bureau.  The Portland Housing Bureau shall pay the County Assessor any reasonable cost incurred to process the exemption onto the tax rolls.  In addition to paying the basic fee, the applicant may be required to pay other reasonable costs, which are incurred by the Portland Housing Bureau or the County Assessor in processing the application.  The Portland Housing Bureau shall collect the additional payment, if any, and pay itself, the County Assessor, or any other City bureau an amount equal to the additional costs incurred.  If the applicant is denied, the City shall retain that portion of the application fee attributable to its own administrative costs and shall refund the balance to the applicant.


3.101.050 Review of Application.

(Amended by Ordinance Nos. 167356, 182671 and 185043, effective December 7, 2011.)

 

A.  Within 30 days after the April 1 deadline for the application and payment of the application fee, the Portland Housing Bureau shall approve or deny the application.  The application shall be approved if the Portland Housing Bureau finds that the property is “eligible property” within the meaning of the paragraphs 1. through 3. of Subsection B. of Section 3.101.010 of this Chapter, and that the applicant has submitted the application and paid the fees pursuant to Section 3.101.040 of this Chapter. 

 

B.  If the application is approved, the Portland Housing Bureau shall send written notice of approval to the applicant.

 

C.  If the application is denied, the Portland Housing Bureau shall state in writing the reasons for denial and send the notice to the applicant at his or her last known address within 10 days after the denial.  The Portland Housing Bureau shall retain that portion of the application fee which is attributable to its own administrative costs and shall refund the balance to the applicant.

 

D.  Upon denial by the Portland Housing Bureau, an applicant may appeal the denial to the City Council within 30 days after receipt of the notice of denial.  Appeal from the decision of the City Council may be taken as provided by law.

 

E.  The application shall be assigned an application and receipt number.


3.101.060 Annual Application Renewal.

(Amended by Ordinance Nos. 167356, 178286 and 185043, effective December 7, 2011.)

 

A.  Applicants for property tax exemption must apply each year no later than April 1 in order to be qualified for property tax exemption for the upcoming tax year.

 

B.  The annual application renewal fee shall be set by the Portland Housing Bureau.


3.101.070 Assessment Exemption.

(Amended by Ordinance Nos. 167356, 178286 and 185043, effective December 7, 2011.)

 

A.  Property for which an application for a property tax exemption has been approved under the provisions of this Chapter shall be exempt from ad valorem taxation for 1 year beginning July 1 of the tax year immediately following approval of the exemption, or when, pursuant to ORS 307.330, the property would have gone on the tax rolls in the absence of the exemption provided for in this Chapter.  The exemption provided in this Section shall be in addition to any other exemption provided by law.

 

B.  Applications for property tax exemption under this Chapter shall apply to and may be approved for assessment years beginning on or after January 1, 1985, but no later than January 1, 2027.

 

C.  The exemption as provided by this Chapter shall apply to the tax levy of all taxing districts in the City of Portland in which property certified for exemption is located as long as the City of Portland has achieved the approval from such taxing districts whose governing boards agree to the policy of exemption, equal to 51 percent or more of the total combined rate of taxation on the property certified for exemption.


3.101.080 Termination.

(Amended by Ordinance Nos. 167356, 182671 and 185043, effective December 7, 2011.)

 

A.  If, after a certificate of qualification approving the exemption has been filed with the County Assessor, the Portland Housing Bureau finds that non‑compliance has occurred or that any provision of this Chapter is not being complied with, the Portland Housing Bureau shall give notice in writing to the owner, mailed to the owner’s last‑known address and to every known lender, by mailing the notice to the last-known address of every known lender, of the proposed termination of the exemption.  The notice shall state the reasons for the proposed termination of the exemption and require the owner to appear before City Council to show cause at a specified time, not less than 20 days after mailing of the notice, why the exemption should not be terminated.

 

B.  If the owner does not appear or if he or she appears and fails to show cause why the exemption should not be terminated, the Portland Housing Bureau shall notify every known lender and shall allow any lender not less than 30 days after the date the notice of the failure to appear and show cause is mailed to cure any noncompliance or to provide adequate assurance that all noncompliance shall be remedied.

 

C.  If the owner fails to appear and show cause why the exemption should not be terminated and the lender fails to cure or give adequate assurance of the cure of any noncompliance, City Council shall adopt an ordinance or resolution stating its findings that terminate the exemption.  A copy of the ordinance or resolution shall be filed with the County Assessor and a copy sent to the owner at the owner’s last‑known address and to the lender at the last-known address of the lender, within 10 days after its adoption.

 

D.  Upon final adjudication, the county officials having possession of the assessment and tax rolls shall correct the rolls in the manner provided for omitted property under ORS 311.216 to 311.232, to provide for the assessment and taxation of any value not included in the valuation of the property during the period of exemption prior to termination by City Council or by a court, in accordance with the findings of City Council or the court as the assessment year in which the exemption is to terminate.  The County Assessor shall make the valuation of the property necessary to permit correction of the rolls, and the owner may appeal the valuation in the manner provided under ORS 311.216 to 311.232.  Where there has been a failure to comply, as provided in Subsection A of this Section, the property shall be revalued beginning July 1 of the calendar year in which the non‑compliance first occurred.  Any additional taxes becoming due shall be payable without interest if paid in the period prior to the 16th day of the months next following the month of correction.  If not paid within such period, the additional taxes shall thereafter be considered delinquent on the date they would normally have become delinquent if the time extended on the roll or rolls in the year or years for which the correction was made.


3.101.090 Implementation.

(Amended by Ordinance Nos. 167356, 182671 and 185043, effective December 7, 2011.)  The Portland Housing Bureau shall establish procedures and prepare forms for immediate implementation and administration of this Chapter in order to accept applications prior to the April 1 filing deadline imposed by ORS 307.545.