Chapter 3.18
NONPROFIT CORPORATION LOW-INCOME HOUSING TAX EXEMPTION
Sections:
3.18.020 Nonprofit corporation low-income housing exemption – Criteria.
3.18.030 Application for exemption.
3.18.040 Determination of eligibility for exemption – Notice to county assessor.
3.18.050 Termination of exemption.
3.18.060 Delegation of administrative authority.
3.18.005 Definitions.
“Debarment” means action taken by a debarring official under federal or state law to exclude a contractor from government contracting and government-approved subcontracting for a reasonable, specified period.
“Governing body” means the city of Lincoln City city council.
Low Income. For housing units on property that is awarded tax credits through the federal Low-Income Housing Tax Credit program and is a qualified low-income housing project meeting the requirements of 26 U.S.C. 42(g)(1)(C), income at or below 80 percent of the area median income as determined by the Oregon Housing Stability Council based on information from the United States Department of Housing and Urban Development, provided the average area median income of all housing units on the property is at or below 60 percent of the area median income as determined by the Oregon Housing Stability Council based on information from the United States Department of Housing and Urban Development. (Ord. 2022-27 § 1)
3.18.010 Adoption.
The Lincoln City city council hereby ratifies the adoption of Resolution 94-29 and hereby readopts ORS 307.540 through 307.548 (2021 Act). Applications for exemption shall be accepted in accordance with the provisions of the Act and determination shall be made by the city governing body under the provisions of the Act whether or not the applicant qualifies for the exemption. (Ord. 2022-27 § 1)
3.18.020 Nonprofit corporation low-income housing exemption – Criteria.
A. The governing body shall use the following criteria to determine whether property is exempt from ad valorem property taxation as provided in this section. The corporation must meet all of the criteria below to be granted a tax exemption:
1. The property is owned or being purchased by a corporation described in Section 501(c)(3) or (4) of the Internal Revenue Code that is exempt from income taxation under Section 501(a) of the Internal Revenue Code.
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:
a. Occupied by low-income persons; or
b. Held for the purpose of developing low-income housing for a reasonable period of time, not to exceed the duration of any affordability covenant burdening the property and subject to the authorization limitations of the statute, as it may be amended.
4. The property or portion of the property receiving the exemption is actually and exclusively used for the purposes described in Section 501(c)(3) or (4) of the Internal Revenue Code.
5. The corporation:
a. Is not presently debarred, suspended, proposed for debarment, or declared ineligible by any federal or state agency;
b. Has not, within the three-year period preceding the application, been convicted of or had a civil judgment rendered against it for commission of fraud or a criminal offense in connection with obtaining, attempting to obtain, or performing a public transaction or contract under a public transaction; or been convicted of any federal or state statutes of embezzlement theft, forgery, bribery, falsification, destruction of records, making false statements, receiving stolen property, or any other offense indicating a lack of business integrity or business honesty; and
c. Is not presently indicted for or otherwise criminally or civilly charged by a federal, state, or local government entity with commission of any of the offenses enumerated in subsection (A)(5)(b) of this section.
B. In applying the criteria identified in subsection (A) of this section to determine whether the property qualifies for exemption, the governing body may consider any information provided by the corporation regardless of whether that information was included in the application or was otherwise provided by the corporation. If the corporation does not complete the application as provided under LCMC 3.18.030, however, then the governing body may reject the application.
C. For purposes of subsection (A) of this section, a corporation that only has 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.
D. A partnership shall be treated the same as a corporation to which this section applies if the corporation is:
1. A general partner of the partnership; and
2. Responsible for the day-to-day operation of the property that is the subject of the exemption. (Ord. 2022-27 § 1)
3.18.030 Application for exemption.
A. To seek the exemption provided by LCMC 3.18.020, the corporation shall file an application for exemption with the city for each assessment year the corporation wants the exemption.
B. The application shall be filed on or before March 1st of the assessment year for which the exemption is applied for, unless the property designated is acquired after March 1st and before July 1st. If the property designated is acquired after March 1st and before July 1st, the claim for that year shall be filed within 30 days after the date of acquisition.
C. The application shall include the following information as applicable:
1. A description of the property for which the exemption is requested;
2. A description of the charitable purpose of the project and whether all or a portion of the property is being used for that purpose;
3. A certification of income levels of low-income occupants;
4. A description of how the tax exemption will benefit project residents;
5. A description of the development of the property if the property is being held for future low-income housing development;
6. A declaration certifying that the corporation has been granted exemption from income taxation under Section 501(a) of the Internal Revenue Code as an organization described in Section 501(c)(3) or (4) of the Internal Revenue Code; and
7. A certification that the corporation meets the criteria provided for in LCMC 3.18.020(A)(5).
D. The applicant shall verify the information in the application by oath or affirmation. (Ord. 2022-27 § 1)
3.18.040 Determination of eligibility for exemption – Notice to county assessor.
A. Except as otherwise provided in subsection (B) of this section, within 30 days of the filing of an application under LCMC 3.18.030, the governing body shall determine whether the applicant qualifies for the exemption granted under LCMC 3.18.020. If the governing body determines the applicant qualifies, then the governing body shall certify to the county assessor that all or a portion of the property shall be exempt from taxation under the levy of the certifying governing body.
B. If the governing body has previously determined that the applicant qualified for the exemption granted under this chapter, then the governing body shall use the criteria that were in place when the applicant was first granted the exemption for the property, including, if desired, the definition of low-income housing, each year the applicant reapplies for the exemption.
C. Upon receipt of certification under subsection (A) of this section, the county assessor shall exempt the property from taxation to the extent certified by the governing body. (Ord. 2022-27 § 1)
3.18.050 Termination of exemption.
A. If the city determines that property that has received an exemption under this chapter in anticipation of future development of low-income housing is being used for any purposes other than the provision of low-income housing, or that any provision of this chapter is not being complied with, the city shall give notice of the proposed termination of the exemption to the owner by mailing the notice to the last known address of the owner, and to every known lender by mailing the notice to the last known address of every known lender. The notice shall state the reasons for the proposed termination and require the owner to appear at a specified time, not less than 20 days after mailing the notice, to show cause, if any, why the exemption should not be terminated.
B. If the owner fails to appear and show cause why the exemption should not be terminated, the city shall notify every known lender, and shall allow any lender not less than 30 days after the date the notice of failure to appear and show cause is mailed to cure any noncompliance or to provide adequate assurance to the governing body 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 noncompliance, the governing body shall adopt a resolution stating its findings that terminate the exemption. A copy of the resolution shall be filed within 10 days after its adoption with the county assessor, and a copy shall be 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 of its adoption.
D. Upon the county assessor’s receipt of the governing body’s termination findings:
1. The exemption granted to the housing unit or portion under this chapter shall terminate immediately, without right of notice or appeal;
2. The property shall be assessed and taxed as other property similarly situated is assessed and taxed;
3. Notwithstanding ORS 311.235, there shall be added to the general property tax roll, for the property in question, for the tax year next following the presentation or discovery, to be collected and distributed in the same manner as other real property tax, an amount equal to the difference between the taxes assessed against the property and the taxes that would have been assessed against the property had it not been exempt under this chapter for each of the years, not to exceed the last 10 years, during which the property was exempt from taxation under this chapter;
4. The assessment and tax rolls shall show potential additional tax liability for each property granted an exemption under this chapter because the property is being held for future development of low-income housing;
5. Additional taxes collected under this section shall be deemed to have been imposed in the year to which the additional taxes relate. (Ord. 2022-27 § 1)
3.18.060 Delegation of administrative authority.
The governing body hereby delegates to the city manager, or designee, all authority necessary to make all determinations and otherwise administer the provisions of this chapter, excepting determinations and actions required to be made or taken by the governing body pursuant to LCMC 3.18.050. (Ord. 2022-27 § 1)