Chapter 3.35
NONPROFIT CORPORATION LOW-INCOME HOUSING TAX EXEMPTIONS
Sections:
3.35.020 Nonprofit corporation low-income housing exemption – Criteria.
3.35.030 Application for exemption.
3.35.040 Determination of eligibility for exemption, notice to county assessor.
3.35.050 Termination of exemption.
3.35.060 Delegation of administrative authority.
3.35.010 Definitions.
(A) “Governing body” means the Cornelius city council.
(B) “Low income” means income 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. 2015-05 § 1 (Exh. A), 2015; Ord. 2021-02 § 1 (Exh. A), 2021; Ord. 2023-03 § 1 (Exh. A), 2023.]
3.35.015 Moratorium.
There is a moratorium on the city’s nonprofit corporation low-income housing exemption program in this chapter through December 31, 2029, or until staff determines that the out-year general fund projection is positive and sustained positive relative to expenses, whichever occurs first. The city shall not accept new applications for exemptions after December 6, 2023, except that corporations with properties that were approved for the exemption prior to December 6, 2023, may file subsequent applications for each assessment year as described in CMC 3.35.020(A)(5). [Ord. 2023-03 § 1 (Exh. A), 2023.]
3.35.020 Nonprofit corporation low-income housing exemption – Criteria.
(A) Property that meets all of the following criteria shall be exempt from taxation as provided in this section:
(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 future development as low-income housing, for a period not exceeding five years.
(4) The property or portion of the property receiving the exemption, if occupied, is actually and exclusively used for the purposes described in Section 501(c)(3) or (4) of the Internal Revenue Code.
(5) The exemption was approved as provided in CMC 3.35.040 prior to December 6, 2023. Corporations with properties that have been exempt from taxation under this chapter on or before December 6, 2023, may file subsequent annual applications for each assessment year pursuant to CMC 3.35.030.
(B) For the purposes of subsection (A) of this section, 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) 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. 2015-05 § 1 (Exh. A), 2015; Ord. 2021-02 § 1 (Exh. A), 2021; Ord. 2023-03 § 1 (Exh. A), 2023.]
3.35.030 Application for exemption.
(A) To qualify for the exemption provided by CMC 3.35.020, the corporation shall file an application for exemption with the city for each assessment year the corporation wants the exemption. The application shall be filed on or before March 1st of the assessment year for which the exemption is sought, except that when the property designated is acquired after March 1st and before July 1st, the application for that year shall be filed within 30 days after the date of acquisition. 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; and
(6) A declaration that the corporation has been granted an 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.
(B) The applicant shall verify the information in the application by oath or affirmation. [Ord. 2015-05 § 1 (Exh. A), 2015; Ord. 2021-02 § 1 (Exh. A), 2021; Ord. 2023-03 § 1 (Exh. A), 2023.]
3.35.040 Determination of eligibility for exemption, notice to county assessor.
(A) Within 30 days of the filing of an application under CMC 3.35.030, the city shall determine whether the applicant qualifies for the exemption under CMC 3.35.020. If the governing body determines that the applicant qualifies, the city shall certify to the Washington County assessor that all or a portion of the property is exempt from taxation under the levy of the city.
(B) Upon receipt of certification sent pursuant to subsection (A) of this section, the Washington County assessor shall exempt the property from taxation to the extent certified by the city. [Ord. 2015-05 § 1 (Exh. A), 2015; Ord. 2021-02 § 1 (Exh. A), 2021; Ord. 2023-03 § 1 (Exh. A), 2023.]
3.35.050 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 in connection with the exempt property and finds that the property is being used for any purpose 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 required under this subsection shall state the reasons for the proposed termination and shall 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 governing body 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 assurance adequate to the city council that all noncompliance will 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, the city council shall adopt an ordinance or resolution stating its findings that terminate the exemption. A copy of the ordinance or resolution required under this subsection shall be filed within 10 days after its adoption with the Washington 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 after its adoption.
(D) Upon the Washington County assessor’s receipt of the city’s termination findings:
(1) The exemption granted the housing unit or portion under this chapter terminates immediately, without right of notice or appeal;
(2) The property shall be assessed and taxed as other property similarly situated is assessed and taxed; and
(3) Notwithstanding ORS 311.235, there shall be added to the general property tax roll 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.
(E) Notwithstanding subsection (D) of this section, if at the time of presentation or discovery the property is no longer exempt, additional taxes may be collected as provided in subsection (D) of this section, except that the number of years for which the additional taxes shall be collected shall be reduced by one year for each year that has elapsed since the year the property was last granted exemption, beginning with the oldest year for which additional taxes are due.
(F) The assessment and tax rolls shall show potential additional tax liability for each property granted exemption under this chapter because the property is being held for future development of low-income housing.
(G) Additional taxes collected under this section shall be deemed to have been imposed in the year to which the additional taxes relate. [Ord. 2015-05 § 1 (Exh. A), 2015; Ord. 2021-02 § 1 (Exh. A), 2021; Ord. 2023-03 § 1 (Exh. A), 2023.]
3.35.060 Delegation of administrative authority.
The city council hereby delegates to the mayor or his/her designee all authority necessary to make all determinations and otherwise administer the provisions of this chapter, excepting determinations and actions required to be taken by the city council pursuant to CMC 3.35.050. [Ord. 2015-05 § 1 (Exh. A), 2015; Ord. 2021-02 § 1 (Exh. A), 2021; Ord. 2023-03 § 1 (Exh. A), 2023.]