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Home My WebLink About6482 ORDINANCE NO. 6 4 8 2 AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF AUBURN, WASHINGTON, AMENDING SECTIONS 3.60 036, 3 94.040 AND 3 94 060 OF THE AUBURN CITY CODE RELATING TO TAX EXEMPTIONS WHEREAS, The City Council has enacted legislation granting sales and property tax exemptions designed to promote economic development in certain areas of the City; and, WHEREAS, upon further review and the recommendations of the Mayor and City Staff, the City Council wishes to adjust the criteria for these exemptions in order to further incentivize construction in certain areas of the City. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF AUBURN, WASHINGTON, DO ORDAIN as follows. Section 1. Amendment to City Code. That section 3 60 060 of the Auburn City Code be and the same hereby is amended to read as follows. 3.60.036 Construction sales tax exemption. A.1. The following purchasers in the eligible target business class who have paid the tax imposed by this chapter on construction materials, fixed equipment, or machinery installation, or on sales of or charges made for labor and services rendered in respect to such construction or installation of such machinery or equipment, are eligible for an exemption as provided for in this section: for property zoned downtown urban center (DUC), C-3 (heavy commercial district), and C-4 (mixed-use commercial), purchases directly related to the construction of new commercial buildings or redevelopment of existing vacant buildings 25,000 square feet or greater or expansion of existing commercial buildings that creates new or expanded building floor area that generates sales tax revenue. 2. For property zoned downtown urban center (DUC), purchases directly related to the construction of new commercial buildings less than 25,000 square feet, or redevelopment of existing buildings less than 25,000 square feet, where the cost of the improvement is at least 25 ------------ - --- Ordinance No 6482 October 1, 2013 Page 1 of 6 percent of the current assessed value of the improvements on the property pursuant to the assessment records of King or Pierce County, as applicable 3 For property zoned M-1 (light industrial district), M-2 (heavy industrial district) and EP (environmental park district), purchases directly related to the construction of new commercial buildings, redevelopment of existing buildings that result in a change of occupancy from warehouse use to manufacturing use, or redevelopment of existing buildings where the cost of the improvement is at least 25 percent of the current assessed value of the improvements on the property pursuant to the assessment records of King or Pierce County, as applicable. B Beginning on the effective date of the ordinance codified in this section through a date four years after the effective date, a purchaser is eligible for an exemption specified under this section from the local sales and use tax paid under this chapter, as authorized under RCW 82.14 030(2), up to a maximum of 20 percent of taxes imposed and paid to the city of Auburn not to exceed $100,000. The purchaser is eligible for an exemption under this section in the form of a refund C. For purposes of this section, the following definitions apply- 1. "Change of occupancy" means a change of the purpose for which a building is used or intended to be used The term shall also include the building or portion thereof in which such change of occupancy is made Change of occupancy is not intended to include change of tenants or proprietors. 2. "Commercial building" means a structure that has, as its primary purpose, a commercial use as that term is defined in ACC 18 04.240 3. "Expansion" means to add to the floor area of a building. 4. "Purchaser" means a person or entity that is the recipient of a good or service. D Eligible Target Business Classes. 1 The construction sales tax exemption specified in subsection (A)(1) of this section shall only apply to those businesses engaged in normal business activities under the following classifications of businesses occurring within the specified zoning designations: a. General Merchandise, Warehouse Club, SuperCenter — Sales Tax Classification Code 45291; b. Building Materials and Garden Home Center — Sales Tax Classification Code 44411, C. Electronics and Appliances — Sales Tax Classification Code 44311; d. Full Service Restaurants — Sales Tax Classification Code 722110; -------- - - - ----- Ordinance No. 6482 October 1, 2013 Page 2 of 6 e. New and Used Automobile and Light Utility Truck Dealers — Sales Tax Classification Code 44110; f. Bowling Centers — Sales Tax Classification Code 713950; g. Motion Picture Theaters (excluding drive-in theaters) — Sales Tax Classification Code 512131; and h. Hotels — Sales Tax Classification Code 72110 i. Residential buildings and dwellings within the DUC only — North American Industry Classification System Code 531110. 2. The construction sales tax exemptions specified in subsections (A)(2) and (3) of this section shall apply to all businesses located in the DUC, EP, M-1, and M-2 zoning districts as set forth in those subsections. (Ord. 6442 § 1, 2012; Ord. 6376 § 2, 2011 ) Section 2. That section 3.94.040 of the Auburn City Code be and the same hereby is amended to read as follows: 3.94.040 Tax exemption — Duration — Valuation — Exceptions. A. Exemption, Duration of. The value of new housing construction, conversion, and rehabilitation improvements for market rate property qualifying under this chapter is exempt from ad valorem property taxation for eight successive years beginning January 1st of the year immediately following the calendar year of issuance of the final certificate of tax exemption and 12 successive years beginning January 1st of the year immediately following the calendar year of issuance of the final certificate of tax exemption for affordable housing qualifying under this chapter. B. Limits on Exemption. The exemption does not apply to the value of land or to the value of nonhousing improvements, nor does the exemption apply to increases in assessed valuation of land and nonqualifying improvements. This chapter also does not apply to increases in assessed valuation made by the assessor on nonqualifying portions of building and value of land, nor to increases made by lawful order of a county board of equalization, the Department of Revenue, or a county, to a class of property throughout the county or specific area of the county to achieve the uniformity of assessment or appraisal required by law In the case of rehabilitation of existing buildings, the exemption does not include the value of improvements constructed prior to the submission of the application required under Chapter 84.14 RCW C. The following exceptions apply to development within the urban center: 1. Projects on property zoned Downtown Urban Center, as shown on the City's official zoning map, must have a minimum of 50 units to qualify for the exemption. ------------ - - - - Ordinance No 6482 October 1, 2013 Page 3 of 6 2. Newly constructed or rehabilitated market rate units do not require a minimum per unit investment to qualify for the exemption. 3. RflatiGR by the !`nnc r Dr'no Inrlov n ..f the passage date of 4h v.............. . F'Ge 'Rd ex as e. ..._ passage date _. -.._ Newly constructed or rehabilitated market rate units with a minimum investment of $29130,000.00 average per unit annually adjusted for inflation by the Consumer Price Index as of the passage date of the ordinance codified in this section (August 17, 2009) and 20 percent or more of the units priced as affordable units shall qualify for the exemption. (Ord. 6257 § 1, 2009; Ord. 6020 § 1, 2006, Ord 5779 § 1, 2003.) Section 3. That Section 3 94 060 of the Auburn City Code be and the same hereby is amended to read as follows. 3.94.060 Application procedure. The owner of property applying for exemption under this chapter shall submit an application to the director on a form established by the director The owner shall verify the correctness of the information contained in the application by his/her signature and affirmation made under penalty of perjury under the laws of the state of Washington. The application shall contain such information as the director may deem necessary or useful, which at a minimum shall include: A. A completed city of Auburn application form, including information setting forth the grounds for tax exemption; B. A brief written'description of the project, and schematic site and floor plans of the multifamily units and the structure(s) in which they are proposed to be located; C Floor and site plans of the proposed project, which plans may be revised by the owner; provided, in the opinion of the director, such revisions do not materially alter the nature of the project or the rationale substantiating the exemption application; D. A statement from the owner acknowledging the potential tax liability when the property ceases to be eligible for exemption under this chapter; E. At the time of initial application under this section, the owner shall pay to the city an initial application fee of $1,000, plus an amount necessary to cover recording fees under ACC 3.94.100; F. Except as otherwise provided in ACC 3 94.070, the application shall be submitted any time before `h„e eater - - - - - - - -------- - Ordinance No. 6482 October 1, 2013 Page 4 of 6 2. AR application fn-.r a building or otheF GORStrUGtion a certificate of occupancy temporary or final, is issued; G If on the effective date of the ordinance codified in this chapter, the owner has applied for a permit identified in subsection (F)(2) of this section, then application for exemption under this section may be submitted any time prior to issuance of a building permit. (Ord. 6257 § 1, 2009; Ord. 5779 § 1, 2003 ) Section 4. Implementation. The Mayor is hereby authorized to implement such administrative procedures as may be necessary to carry out the directions of this legislation. Section 5. Severability. The provisions of this ordinance are declared to be separate and severable. The invalidity of any clause, sentence, paragraph, subdivision, section or portion of this ordinance, or the invalidity of the application thereof to any person or circumstance shall not affect the validity of the remainder of this ordinance, or the validity of its application to other persons or circumstances. Section 6. Effective date. This Ordinance shall take effect and be in force five days from and after its passage, approval and publication as provided by law INTRODUCED- OCT - 7 2013 PASSED: OCT - 7 2013 APPROVED- OCT - 7 2013 P 7 AUBU N ATTEST- 1Q _ MAYOR EWIS Danielle E. Daskam, City Clerk --- - -- ------ ---- Ordinance No. 6482 October 1, 2013 Page 5 of 6 APPROVED AS TO FORM: Lel B. Hei jtyAtforney Published:��,�� ,�3. � �s � ---------------- Ordinance No. 6482 October 1, 2013 Page 6 of 6