1. This Chapter establishes a Construction Excise Tax on commercial and residential improvements to provide funding for affordable housing in the City.  Chapter 6.08 of the City Code is known as the Construction Excise Tax.

1. As used in this Chapter, unless the context requires otherwise:
2. A.  Commercial means any structure designed or intended to be used, or actually used, for occupancy for other than residential purposes.
3. B.  Construct or construction means erecting, constructing, enlarging, altering, repairing, improving, or converting any building or structure for which the issuance of a building permit is required pursuant to the provisions of Oregon law.
4. C.   Improvement means any improvements to real property resulting in a new structure, additional square footage added to an existing structure, or the addition of living space to an existing structure.
5. D.  Mass shelters means a structure that contains one or more open sleeping areas, or is divided only by non-permanent partitions, furnished with cots, floor mats, or bunks. Individual sleeping rooms are not provided. The shelter may or may not have food preparation or shower facilities. The shelter is managed by a public or non-profit agency to provide shelter. For mass shelters, affordable means that shelter is provided on a daily basis without a fee. The number of beds is determined by the maximum number of people who can be given overnight accommodations at one time on the site.
6. E.  Median family income means median family income by household size for the Portland Metropolitan Statistical Area as defined by the United States Department of Housing and Urban Development as adjusted for inflation and published periodically.
7. F.  Net revenue means revenues remaining after the administrative fees described in Section 6.08.130 are deducted from the total Construction Excise tax collected.
8. G.  Residential means structure designed or intended to be used, or actually used, for occupancy for residential purposes including any residential structure, dwelling, or dwelling unit.
9. H.  Value of improvement means the total value of the improvement as determined by the construction permit or building permit for the Improvement. The Bureau will calculate the total value by determining the value per square foot based on building type using the International Code Council Building Valuation Data Tables and multiplying that value by the area of the new structure or additional square footage from the exterior surface of the outside wall.

The City Administrator is responsible for the administration of this Chapter.  In exercising the responsibilities of this Section, the City Administrator may act through designated representatives.

The City Administrator, as authorized by Charter, may adopt procedures, forms and written policies for administering the Construction Excise Tax and Chapter 6.08 of this Code.  

1. A.  Each person who applies to construct a commercial improvement in the City must pay a commercial construction excise tax in the amount of 1 percent of the value of the improvement.
2. B.  Each person who applies to construct a residential improvement in the City must pay a residential construction excise tax in the amount of 1 percent of the value of the improvement.
3. C.  The construction excise tax will be due and payable prior to the issuance of any building permit by the City Administrator.

1. A.  No tax imposed under this Chapter will be imposed upon the following improvements:
   1. 1.  Improvements when the value of improvement is less than or equal to $100,000;
   2. 2.  Residential housing units 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 a period of at least 60 years following the date of construction of the residential housing;
   3. 3.  Owner occupied residential properties qualifying under the property tax exemption program under Portland City Code Chapter 3.102.
   4. 4.  Private school improvements;
   5. 5.  Public improvements as defined in ORS 279A.010; 
   6. 6.  Public or private hospital improvements;
   7. 7.  Improvements to religious facilities primarily used for worship or education associated with worship;
   8. 8.  Agricultural buildings, as defined in ORS 455.315 (2)(a);
   9. 9.  Facilities operated by a not-for-profit corporation and that are:
      1. a.  Long-term care facilities, as defined in ORS 442.015;
      2. b.  Residential care facilities, as defined in ORS 443.400; 
      3. c.  Continuing care retirement communities, as defined in ORS 101.020; or
   10. 10.  Mass shelters.
2. B.  Until June 30, 2018, no tax will be imposed under this Chapter 6.08 on accessory dwelling units as defined by Section 33.910 of this Code.
3. C.  The Portland Housing Bureau may require any person seeking an exemption to demonstrate that the person is eligible for an exemption and to establish all necessary facts to support the exemption.

1. The City Administrator will not issue a building permit to any person who has failed to pay the tax required by Section 6.08.050.

1. It is a violation of this Chapter 6.08 for any person to fail to state or to misstate the full value of the improvement.

1. A.  Interest.  If the Director of the Portland Housing Bureau determines that a person has failed to pay to the City all or any part of the construction excise tax due under this Chapter 6.08, interest will be due on the entire unpaid amount, assessed at the rate of .833 percent simple interest per month or fraction thereof (10 percent per annum), computed from the original due date of the fee to the 15th day of the month following the date of the underpayment.  Interest amounts properly assessed in accordance with this Section may not be waived or reduced by the Director.
2. B.  Penalties.  In addition to assessing interest, the City Administrator may assess a penalty of five percent of the otherwise applicable tax liability upon:
   1. 1.  Any person that initially qualifies for an exemption under Subsections 6.08.060 A.2., 6.08.060 A.3. and 6.08.060 A.10. and the housing units subsequently fail to qualify for the exemption;
   2. 2.  Any person who intentionally fails to state the full value of an improvement.
3. C.  Penalties and interest merged with tax.  Any accrued interest and imposed penalties under the provisions of this Section will be merged with and become a part of the construction excise tax required to be paid under this Chapter 6.08.  If delinquency continues, requiring additional penalty and interest calculations, previously assessed penalty and interest are added to the tax due.  This amount becomes the new base for calculating new interest amounts.

1. The construction excise tax, and any assessed interest and penalties, due and owing under this Chapter 6.08 constitutes a debt owing to the City by the person liable for the tax as set forth in Section 6.08.050.

1. A.  The Portland Housing Bureau will issue a refund to any person who has paid a construction excise tax the amount of the tax actually paid:
   1. 1.  If the person establishes that the tax was paid for improvements that were otherwise eligible for an exemption under Section 6.08.060.
   2. 2.  If the person establishes that construction of the improvements was not commenced and the associated building permit has been cancelled by the  City Administrator;
   3. 3.  Upon a determination by either the City Administrator or the Code Hearings Officer that the amount of any construction excise tax, penalty, or interest has been erroneously collected or paid to the City under this Chapter 6.08.
2. B.  The Portland Housing Bureau will either refund all amounts due under this Section within 30 days of a complete application for the refund or give written notice of the reasons why the application has been denied. Claims for refunds must be made upon forms provided by the Portland Housing Bureau. The request for the refund must be submitted within three years from the date of payment of the construction excise tax.
3. C.  Denial of an application for refund may be appealed as provided for in Section 6.08.120.

1. A.  Administrative Review.  Any written determination issued by either the City Administrator or the Portland Housing Bureau applying the provisions of this Chapter 6.08 believed to be in error may be reviewed by the City Administrator if requested in writing by the recipient.  The request for administrative review must be received within 10 days of the determination, and must include all documentation supporting the request.  The City Administrator’s determination in the administrative review will be served by regular mail.
2. B.  Appeals. Any written determination from the City Administrator applying the provisions of this Chapter 6.08 regarding liability for payment of construction excise taxes, the valuation of may appeal such determination of the City Administrator to the Code Hearings Officer of the City as provided in Chapter 22.10 of this Code.
3. C.  The filing of any notice of appeal will not stay the effectiveness of the written determination unless the Code Hearings Officer so directs.

1. A.  Portland Permitting & Development may retain up to four percent of the taxes collected for payment towards the Bureau’s administrative expenses related to collection and distribution of the tax.
2. B.  For the tax imposed on residential improvements, the net revenues will be distributed as follows:
   1. 1.  15 percent of net revenue will be remitted to the Oregon Department of Housing and Community Services to fund home ownership programs.
   2. 2.  50 percent of net revenue will be transferred to the Portland Housing Bureau Inclusionary Housing Fund to fund finance-based incentives for programs that require affordable housing.
   3. 3.  35 percent of net revenue will be transferred to the Housing Bureau Inclusionary Housing Fund to support the production and preservation of affordable housing units at and below 60 percent median family income. 
3. C.  For the tax imposed on commercial improvements, 100 percent of net revenue will be distributed to the Housing Bureau Inclusionary Housing Fund to support the production and preservation of affordable housing units at and below 60 percent median family income.