SB 1036: Construction Excise Tax Fact Sheet
July 10, 2008 01:16 PM
What is the Construction Excise Tax (CET)?
In 2007, Oregon legislators passed a law (Senate Bill 1036) that will help Oregon school districts pay for a portion of the cost of new or expanded school facilities. The bill allows school boards, in cooperation with cities and counties, to tax new residential and non-residential development. The tax will be assessed at $1 per square foot on residential construction and $0.50 per square foot for non-residential construction, not to exceed $25,000 per building permit or $25,000 per structure, whichever is less.
What is the Process for Implementation of this New Tax?
SB 1036 requires that Districts interested in implementing the new tax first draft and adopt a long-term facilities plan. The Corvallis School District's Long Range Facilities Master Plan can be viewed on line here. (Long Range Facilities Master Plan ) The second step is for the District to enter into intergovernmental agreements with the local governments for the collection of these funds. These agreements are currently under negotiation, and public input in regards to the tax is being sought.(http://www.csd509j.net/news/1679.html). Lastly, the School Board must enact the adoption of the intergovernmental agreements by board resolution.
What does this tax pay for?
The tax pays for capital improvements including: land acquisition; construction, reconstruction or improvement of facilities; acquisition or installation of equipment, furnishings or other tangible property; architectural, engineering, legal or similar costs associated related to capital improvements; or the payment of obligations and related costs of issuance that are issued to finance or refinance capital improvements.
Why is this tax needed?
Oregon’s fastest growing school districts are overcrowded and many older schools throughout the state are in need of repair. This tax will require developers to share the cost of growth with school districts. In Corvallis, this tax will help to bridge the gap between funding provided through the recent facilities improvement bond and additional funding necessary for immediate/critical capital improvements.
Who has to pay this tax? Am I exempt from paying the tax?
The tax applies to construction permits on property located within Corvallis School District’s jurisdiction. Exemptions required by SB 1036 include: private school improvements; public improvements as defined in ORS 279A.010; certain residential housing that is guaranteed to be affordable under guidelines established by the U.S. Department of Housing and Urban Development; public or private hospital improvements; improvements to certain religious facilities; and agricultural buildings as defined in ORS 455.315 (2)(a).
Who can I contact for more information?
If you have additional questions, you may contact Greg Lecuyer, Corvallis School District 509J Facilities Manager, at 541.757.5789 or Greg.Lecuyer@corvallis.k12.or.us.
