Bill Text: OR SB900 | 2011 | Regular Session | Introduced
Bill Title: Relating to tax credits for affordable housing lenders; prescribing an effective date.
Sponsorship: Bipartisan Bill
Status: (Failed) 2011-06-30 - In committee upon adjournment. [SB900 Detail]
Download: Oregon-2011-SB900-Introduced.html
76th OREGON LEGISLATIVE ASSEMBLY--2011 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 3301
Senate Bill 900
Sponsored by Senators STARR, JOHNSON
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 as
introduced.
Extends sunset for tax credit for affordable housing lenders.
Takes effect on 91st day following adjournment sine die.
A BILL FOR AN ACT
Relating to tax credits for affordable housing lenders; amending
ORS 317.097 and section 30, chapter 913, Oregon Laws 2009; and
prescribing an effective date.
Be It Enacted by the People of the State of Oregon:
SECTION 1. Section 30, chapter 913, Oregon Laws 2009, is
amended to read:
{ + Sec. 30. + } The Housing and Community Services
Department may not issue a certificate under ORS 317.097 on or
after January 1,
{ - 2014 - } { + 2020 + }.
SECTION 2. ORS 317.097, as amended by section 30, chapter 82,
Oregon Laws 2010, is amended to read:
317.097. (1) As used in this section:
(a) 'Annual rate' means the yearly interest rate specified on
the note, and not the annual percentage rate, if any, disclosed
to the applicant to comply with the federal Truth in Lending Act.
(b) 'Finance charge' means the total of all interest, loan
fees, interest on any loan fees financed by the lending
institution, and other charges related to the cost of obtaining
credit.
(c) 'Lending institution' means any insured institution, as
that term is defined in ORS 706.008, any mortgage banking company
that maintains an office in this state or any community
development corporation that is organized under the Oregon
Nonprofit Corporation Law.
(d) 'Manufactured dwelling park' has the meaning given that
term in ORS 446.003.
(e) 'Nonprofit corporation' means a corporation that is exempt
from income taxes under section 501(c)(3) or (4) of the Internal
Revenue Code as amended and in effect on December 31, 2009.
(f) 'Preservation project' means housing that was previously
developed as affordable housing with a contract for rent
assistance from the United States Department of Housing and Urban
Development or the United States Department of Agriculture and
that is being acquired by a sponsoring entity.
(g) 'Qualified assignee' means any investor participating in
the secondary market for real estate loans.
(h) 'Qualified borrower' means any borrower that is a
sponsoring entity that has a controlling interest in the real
property that is financed by a qualified loan. A controlling
interest includes, but is not limited to, a controlling interest
in the general partner of a limited partnership that owns the
real property.
(i) 'Qualified loan' means:
(A) A loan that meets the criteria stated in subsection (5) of
this section or that is made to refinance a loan that meets the
criteria described in subsection (5) of this section; or
(B) The purchase by a lending institution of bonds, as defined
in ORS 286A.001, issued on behalf of the Housing and Community
Services Department, the proceeds of which are used to finance or
refinance a loan that meets the criteria described in subsection
(5) of this section.
(j) 'Sponsoring entity' means a nonprofit corporation,
nonprofit cooperative, state governmental entity, local unit of
government as defined in ORS 466.706, housing authority or any
other person, provided that the person has agreed to restrictive
covenants imposed by a nonprofit corporation, nonprofit
cooperative, state governmental entity, local unit of government
or housing authority.
(2) The Department of Revenue shall allow a credit against
taxes otherwise due under this chapter for the taxable year to a
lending institution that makes a qualified loan certified by the
Housing and Community Services Department as provided in
subsection (7) of this section. The amount of the credit is equal
to the difference between:
(a) The amount of finance charge charged by the lending
institution during the taxable year at an annual rate less than
the market rate for a qualified loan that is made before January
1, { - 2014 - } { + 2020 + }, that complies with the
requirements of this section; and
(b) The amount of finance charge that would have been charged
during the taxable year by the lending institution for the
qualified loan for housing construction, development, acquisition
or rehabilitation measured at the annual rate charged by the
lending institution for nonsubsidized loans made under like terms
and conditions at the time the qualified loan for housing
construction, development, acquisition or rehabilitation is made.
(3) The maximum amount of credit for the difference between the
amounts described in subsection (2)(a) and (b) of this section
may not exceed four percent of the average unpaid balance of the
qualified loan during the tax year for which the credit is
claimed.
(4) Any tax credit allowed under this section that is not used
by the taxpayer in a particular year may be carried forward and
offset against the taxpayer's tax liability for the next
succeeding tax year. Any credit remaining unused in the next
succeeding tax year may be carried forward and used in the second
succeeding tax year, and likewise, any credit not used in that
second succeeding tax year may be carried forward and used in the
third succeeding tax year, and any credit not used in that third
succeeding tax year may be carried forward and used in the fourth
succeeding tax year, and any credit not used in that fourth
succeeding tax year may be carried forward and used in the fifth
succeeding tax year, but may not be carried forward for any tax
year thereafter.
(5) To be eligible for the tax credit allowable under this
section, a lending institution must make a qualified loan by
either purchasing bonds, as defined in ORS 286A.001, issued on
behalf of the Housing and Community Services Department, the
proceeds of which are used to finance or refinance a loan that
meets the criteria stated in this subsection, or by making a loan
directly to:
(a) An individual or individuals who own a dwelling,
participate in an owner-occupied community rehabilitation program
and are certified by the local government or its designated agent
as having an income level when the loan is made of less than 80
percent of the area median income;
(b) A qualified borrower who:
(A) Uses the loan proceeds to finance construction,
development, acquisition or rehabilitation of housing; and
(B) Provides a written certification executed by the Housing
and Community Services Department that the:
(i) Housing created by the loan is or will be occupied by
households earning less than 80 percent of the area median
income; and
(ii) Full amount of savings from the reduced interest rate
provided by the lending institution is or will be passed on to
the tenants in the form of reduced housing payments, regardless
of other subsidies provided to the housing project;
(c) Subject to subsection (14) of this section, a qualified
borrower who:
(A) Uses the loan proceeds to finance construction,
development, acquisition or rehabilitation of housing consisting
of a manufactured dwelling park; and
(B) Provides a written certification executed by the Housing
and Community Services Department that the housing will continue
to be operated as a manufactured dwelling park during the period
for which the tax credit is allowed; or
(d) A qualified borrower who:
(A) Uses the loan proceeds to finance acquisition or
rehabilitation of housing consisting of a preservation project;
and
(B) Provides a written certification executed by the Housing
and Community Services Department that the housing preserved by
the loan:
(i) Is or will be occupied by households earning less than 80
percent of the area median income; and
(ii) Is the subject of a rent assistance contract with the
United States Department of Housing and Urban Development or the
United States Department of Agriculture that will be maintained
by the qualified borrower.
(6) A loan made to refinance a loan that meets the criteria
stated in subsection (5) of this section must be treated the same
as a loan that meets the criteria stated in subsection (5) of
this section.
(7) For a qualified loan to be eligible for the tax credit
allowable under this section, the Housing and Community Services
Department must execute a written certification for the qualified
loan that:
(a) Specifies the period, not to exceed 20 years, as determined
by the Housing and Community Services Department, during which
the tax credit is allowed for the qualified loan; and
(b) States that the qualified loan is within the limitation
imposed by subsection (8) of this section.
(8) The Housing and Community Services Department may certify
qualified loans that are eligible under subsection (5) of this
section if the total credits attributable to all qualified loans
eligible for credits under this section and then outstanding do
not exceed $17 million for any fiscal year. In making loan
certifications under subsection (7) of this section, the Housing
and Community Services Department shall attempt to distribute the
tax credits statewide, but shall concentrate the tax credits in
those areas of the state that are determined by the State Housing
Council to have the greatest need for affordable housing.
(9) The tax credit provided for in this section may be taken
whether or not:
(a) The financial institution is eligible to take a federal
income tax credit under section 42 of the Internal Revenue Code
with respect to the project financed by the qualified loan; or
(b) The project receives financing from bonds, the interest on
which is exempt from federal taxation under section 103 of the
Internal Revenue Code.
(10) For a qualified loan defined in subsection (1)(i)(B) of
this section financed through the purchase of bonds, the interest
of which is exempt from federal taxation under section 103 of the
Internal Revenue Code, the amount of finance charge that would
have been charged under subsection (2)(b) of this section is
determined by reference to the finance charge that would have
been charged if the federally tax exempt bonds had been issued
and the tax credit under this section did not apply.
(11) A lending institution may sell a qualified loan for which
a certification has been executed to a qualified assignee whether
or not the lending institution retains servicing of the qualified
loan so long as a designated lending institution maintains
records, annually verified by a loan servicer, that establish the
amount of tax credit earned by the taxpayer throughout each year
of eligibility.
(12) Notwithstanding any other provision of law, a lending
institution that is a community development corporation organized
under the Oregon Nonprofit Corporation Law may transfer all or
part of a tax credit allowed under this section to one or more
other lending institutions that are stockholders or members of
the community development corporation or that otherwise
participate through the community development corporation in the
making of one or more qualified loans for which the tax credit
under this section is allowed.
(13) The lending institution shall file an annual statement
with the Housing and Community Services Department, specifying
that it has conformed with all requirements imposed by law to
qualify for a tax credit under this section.
(14) Notwithstanding subsection (1)(h) and (j) of this section,
a qualified borrower on a loan to finance the construction,
development, acquisition or rehabilitation of a manufactured
dwelling park under subsection (5)(c) of this section must be a
nonprofit corporation, manufactured dwelling park nonprofit
cooperative, state governmental entity, local unit of government
as defined in ORS 466.706 or housing authority.
(15) The Housing and Community Services Department and the
Department of Revenue may adopt rules to carry out the provisions
of this section.
SECTION 3. { + This 2011 Act takes effect on the 91st day
after the date on which the 2011 session of the Seventy-sixth
Legislative Assembly adjourns sine die. + }
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