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Oregon Bulletin

September 1, 2012

Oregon Business Development Department, Chapter 123

Rule Caption: Modify rules relating to the Strategic Investment Program.

Adm. Order No.: OBDD 11-2012

Filed with Sec. of State: 8-15-2012

Certified to be Effective: 8-15-12

Notice Publication Date: 6-1-2012

Rules Amended: 123-623-1950

Rules Repealed: 123-623-1200

Subject: Rule modifications for the Strategic Investment Program are being modified to reflect minor improvements, corrections or clarifications.

Rules Coordinator: Mindee Sublette—(503) 986-0036

123-623-1950

Local Distribution of Community Service Fee

(1) The County shall see to the entire annual distribution of funds comprising the community service fee including but not limited to some or all of the following:

(a) The County;

(b) City government(s) if any part of Approved Project is located within incorporated territory;

(c) Any (other) local taxing district that levies taxes on property located in a tax code area containing any part of the Approved Project; or

(d) Local organizations or programs that provide a relevant and significant community service, even without taxing authority.

(2) A distribution formula shall determine the exact percentage of the community service fee received or retained by an entity listed in section (1) of this rule. A schedule of distribution formulae that varies from year to year is allowable.

(3) Establishment of the annual formula may occur in one of only the following two ways:

(a) By official action of the Commission, if subsection (b) of this section is not satisfied; or

(b) By formal agreement that the following local parties have at least accepted in principle, and that is effective, on or before the same date of the third month after the Commission’s determination of the Approved Project:

(A) County government;

(B) City government described in subsection (1)(b) of this rule; and

(C) Local taxing districts listed in ORS 198.010 or 198.180 and described in subsection (1)(c) of this rule, to the extent that the sum of property tax authority for such participating districts equals or exceeds 75 percent of the total for all such districts (prorated by the proportion of the Approved Project among tax code areas). Property tax authority consists of the sum of a district’s permanent and local option (levy) rate authority, both used and unused, but it excludes the levy/tax rates for bonded indebtedness.

(4) If local parties timely reach and effect such an agreement:

(a) They may mutually amend or revise the agreement at a later time; and

(b) The County shall formally report the annual distribution formula to the Department, in order to verify that the Commission need not establish such formula, and to facilitate its availability for use in distributing appropriated amounts from the Shared Service Fund under ORS 285C.639(3)(b).

(5) In the event that the parties in subsection (3)(b) of this rule have not concluded an agreement (aside from outstanding signatures) before the requisite three-month period, the Commission:

(a) Shall take necessary steps as soon as reasonably possible for purposes of subsection (3)(a), as described in section (6), of this rule; or

(b) May delay official action, at its sole discretion, if informed that a sufficient set of the parties described in subsection (3)(b) of this rule are having productive negotiations, with which they wish to continue. Under such circumstances:

(A) The Commission may officially sanction an agreement reached when negotiations successfully conclude:

(B) The parties may not subsequently amend or revise the agreement in any way that would effectively modify the established distribution formula)

(6) In determining a distribution formula the Commission:

(a) May rely primarily on the relative proportions of prevailing property tax rates among affected local taxing districts;

(b) May consider adjusting such proportions according to the Approved Project’s demand or direct impact on the public service(s) provided by each entity, taking account of expected new property tax revenues even with the Abatement, as well as consideration of the goals and purposes of applicable state policies;

(c) Shall set an annual distribution percentage for each entity described in section (1) of this rule that the Commission determines will receive a portion of the distribution; and

(d) Shall in the process of issuing the distribution formula to the County government, notify all entities of this official, final action.

(7) In an SIZ, each Approved Project will entail a separate agreement or Commission action for the distribution of the community service fee arising from it, consistent with this rule. Nevertheless, the County and affected local parties may agree to a generalized distribution formula and standard agreement for future Approved Projects.

Stat. Auth.: ORS 285A.075 & 285C.615(7)
Stats. Implemented: ORS 285C.609, 285C.623 & 285C.639
Hist.: EDD 25-2008, f. 7-31-08, cert. ef. 8-1-08; Renumbered from 123-023-1950 by OBDD 18-2010, f. 4-30-10, cert. ef. 5-1-10; OBDD 11-2012, f. & cert. ef. 8-15-12


 

Rule Caption: Modify rules relating to the Oregon Investment Advantage program.

Adm. Order No.: OBDD 12-2012

Filed with Sec. of State: 8-15-2012

Certified to be Effective: 8-15-12

Notice Publication Date: 6-1-2012

Rules Amended: 123-635-0100, 123-635-0150, 123-635-0300, 123-635-0350

Subject: Rule modifications for the Oregon Investment Advantage are being modified to reflect minor improvements, corrections or clarifications.

 Modifications are made in the Oregon Investment Advantage due to HB 3672 passed in the 2011 Legislative Session.

 Housekeeping and technical corrections to these rules may occur to ensure consistency and comply with statute.

Rules Coordinator: Mindee Sublette—(503) 986-0036

123-635-0100

Definitions

As used in this division of administrative rules, in addition to definitions in OAR 123-001 (Procedural Rules), unless the context dictates otherwise:

(1) “Business firm” means a person operating or conducting one or more trades or businesses for profit, and does not include any governmental agency, municipal corporation or nonprofit corporation, other than a people’s utility district or a joint operating agency under ORS 262.005.

(2) “Facility” has the meaning given under ORS 285C.500(4).

(3) “Municipal Corporation” means the following with respect to the location of a Facility proposed by an application for preliminary certification:

(a) The county government of the county, the territory of which contains the Facility, regardless of whether the location is incorporated or not;

(b) A city government, if the Facility will be located within the corporate limits or urban growth boundary of the city; and

(c) A Port for which the Facility will be located within the territorial limits of the port district.

(4) “Qualified Location” means a site for a Facility as described in OAR 123-635-0150.

(5) “Unique Operations” has the meaning described in OAR 123-635-0175.

[Publications: Publications referenced are available from the agency.]

Stat. Auth.: ORS 285A.075
Stats. Implemented: ORS 285C.500 & 285C.503
Hist.: EDD 17-2002, f. 11-27-02, cert. ef. 12-2-02; EDD 9-2005, f. & cert. ef. 11-4-05; OBDD 5-2010, f. 1-29-10, cert. ef. 2-1-10; Renumbered from 123-155-0100, OBDD 1-2011, f. & cert. ef. 1-3-11; OBDD 4-2011, f. 8-31-11, cert. ef. 9-1-11; OBDD 12-2012, f. & cert. ef. 8-15-12

123-635-0150

Qualified Locations

A proposed Facility must be inside a county as determined according to section (1) of this rule, and located at a site satisfying the requirements of section (2) of this rule, at the time when the Department receives the application for preliminary certification:

(1) With respect to county eligibility:

(a) Effective July 1 of each year, the Department shall determine the counties fulfilling the criteria under ORS 285C.500 (or section 3, chapter 595, Oregon Laws 2005, when applicable) based on county annual unemployment rates and per capita personal income levels for the three most recent years for which data are then available.

(b) This determination remains in effect for any proposed Facility, for which the Department receives application for preliminary certification on or after that July 1, until and including June 30 of the next year, except when the determination is modified to reflect official revisions in the data occurring during that annual period at least one full month before receipt.

(c) Subsequent revisions to data described in this section do not affect the county eligibility for a preliminary certification application received when the county was eligible.

(2) The specific site of a proposed Facility must meet at least one of the following two requirements:

(a) The site is completely inside the urban growth boundary (UGB) of a city with a population of 15,000 or less (based on the most recent population estimates available from the Portland State University Population Research Center); or

(b) Regardless of being inside or outside of any city’s UGB, the site consists entirely of land zoned for industrial use:

(A) Pursuant to effective municipal zoning ordinances that expressively and generally permit permanent facilities and private operations for heavy or light manufacturing, energy production, fabrication, warehousing, distribution, mineral/agricultural processing or similarly intensive, economic uses;

(B) In accordance with applicable state land-use laws, including but not limited to those for unincorporated communities, exceptions from state planning goals, or ORS 197.713, 197.714 or 197.719; and

(C) Such that the Facility’s business operations must directly benefit a traded sector industry under ORS 285B.280, regardless of other uses permitted under the particular zoning code ordinance.

Stat. Auth.: ORS 285A.075
Stats. Implemented: ORS 285C.500 & 285C.503, ORS 197.713, 197.714 & 197.719; OL 2005, ch. 595, ¦3
Hist.: EDD 17-2002, f. 11-27-02, cert. ef. 12-2-02; EDD 9-2005, f. & cert. ef. 11-4-05; OBDD 5-2010, f. 1-29-10, cert. ef. 2-1-10; Renumbered from 123-155-0150, OBDD 1-2011, f. & cert. ef. 1-3-11; OBDD 12-2012, f. & cert. ef. 8-15-12

123-635-0300

Annual Certification

For purposes of annual certification of a Facility for each tax year of the business firm, as allowed under ORS 285C.506:

(1) A preliminarily certified business firm that owns or leases and operates the Facility must file the application for annual certification with the Department:

(a) On or before the 30th day after the end of the income or corporate excise tax year, for which it is seeking to claim or exercise the exemption under ORS 316.778 or 317.391; and

(b) Using the form prescribed by and available from the Department.

(2) Each application must include a fee of $100 in the form of a check or money order payable to the Department.

(3) Within 30 days after the date of filing, Department staff shall review the application, consider potential fact-finding about the Facility under ORS 285C.506(5) to (8), and determine whether it satisfies the applicable requirements for annual certification then:

(a) If the Department denies annual certification, it shall send notice consistent with OAR 123-001-0725.

(b) If the Department approves the annual certification, it shall send a letter conferring certification for the just concluded tax year.

(4) The Department shall also copy relevant staff at the Department of Revenue with items as described in section (3) of this rule.

(5) Requirements for annual compensation apply only to a Facility that received preliminary certification on or after January 1, 2011.

[Publications: Publications referenced are available from the agency.]

Stat. Auth.: ORS 285A.075 & 285C.506(4)
Stats. Implemented: ORS 285C.506
Hist.: EDD 17-2002, f. 11-27-02, cert. ef. 12-2-02; EDD 9-2005, f. & cert. ef. 11-4-05; OBDD 5-2010, f. 1-29-10, cert. ef. 2-1-10; Renumbered from 123-155-0300, OBDD 1-2011, f. & cert. ef. 1-3-11; OBDD 12-2012, f. & cert. ef. 8-15-12

123-635-0350

Issues of Initial and Subsequent Annual Certifications

For purposes of annual certification as described in OAR 123-635-0300:

(1) The preliminary certified business firm may not file the first such application for annual certification with the Department until after:

(a) Business operations have commenced at the Facility;

(b) Relevant employees have been hired; and

(c) The business firm has fully:

(A) Acquired Facility property; and

(B) Completed it in terms of the construction, reconstruction, modification and installation of proposed improvements for purposes of subsection (a) of this section.

(2) Relative to the commencement of operations and so forth, as described in section (1) of this rule, during a given income tax year of the business firm, this first filing may occur:

(a) For and immediately following the tax year of such commencement, if the firm effectively applied for preliminary certification on or before June 30, 2011.

(b) Not less than 24 months after such commencement, if the firm effectively applied for preliminary certification on or after July 1, 2011, such that the exemption on taxable income may not begin until at least:

(A) One tax year later, if such commencement occurs within the first 30 days of the tax year; or

(B) Otherwise, two tax years later.

(3) For purposes of this first filing, the application shall show that after the date, on which the Department approved the preliminary certification:

(a) Business operations commenced at the Facility within:

(A) Six months, if only acquiring existing buildings or structures; or

(B) Eighteen months, if involving major construction or reconstruction; and

(b) Facility property did not remain in an unfinished state of construction, reconstruction, modification or installation for more than six months without significant progress toward completion of such activities.

(4) In order for the Department to certify the Facility with the first filing:

(a) The location and nature of the Facility’s business operation need to conform to that indicated in the application for preliminary certification, for which the Department may issue an amended preliminary certification as appropriate, pursuant to formal receipt of revised information from the business before the end of the tax year, in which operations commence. In determining the appropriateness of issuing an amended preliminary certification, the Department shall consider:

(A) Such criteria as described in section (6) of this rule; and

(B) Material implication for issues described under ORS 285C.503(4)(b), consulting with the Municipal Corporations beforehand as warranted.

(b) Subsection (3)(a) or (b) of this rule must be satisfied, except as allowed by Department staff through a written finding that the delay or interruption is reasonable and not excessive, given the nature and extent of the business firm’s investment in the Facility or of inadvertent circumstances.

(5) For purposes of an application for annual certification:

(a) Its approval shall not depend on any current issue of actual competition with other local businesses, Qualified Location or Unique Operations.

(b) The Department may deny the application if discovering that at the time of application for preliminary certification, the Facility was not at a Qualified Location or did not represent Unique Operations, including but not limited to the case where the preliminary certification application contained false or incomplete information.

(c) The Department may approve the application, even if the nature of the Facility or the business firm/ownership changes after the first filing, including but not limited to changes in:

(A) The composition of Facility property or its exact location; or

(B) The corporate or ownership structure or organization of the business.

(6) To allow a change as described in sections (4)(a) or (5)(c) of this rule depends on:

(a) Direct, ongoing continuity with the original facility;

(b) Business operations remaining materially the same; and

(c) Relative to the location identified in the application for preliminary certification, the Facility is located at what was likewise a Qualified Location inside the same urban growth boundary or at a similarly proximate location.

(7) The business firm need not make its first such filing as soon as is permissible according to in sections (1) and (2) of this rule, and the business firm may miss or skip any subsequent opportunity, for which it is allowed to apply for annual certification; however:

(a) Neither postponement of the first filing nor failure to apply in any subsequent tax year shall affect the period for which certification is otherwise allowed.

(b) The business firm may not claim or exercise the exemption under ORS 316.778 or 317.391 for any such tax year, pursuant to which it did not directly make application for annual certification as described in OAR 123-635-0300. The firm may still use the exemption for any remaining, eligible tax year that is not more than nine consecutive tax years after the year, in which operations commenced and so forth as described in section (1) of this rule, subject to annual certification.

(c) If an application for annual certification is timely filed but denied by the Department, then the exemption is disallowed for not only that year, but also for all other remaining, eligible tax years (but without retroactive effect on any prior exemption).

Stat. Auth.: ORS 285A.075 & 285C.506(6) & (7)
Stats. Implemented: ORS 285C.506, 316.778 & 317.391
Hist.: EDD 17-2002, f. 11-27-02, cert. ef. 12-2-02; EDD 9-2005, f. & cert. ef. 11-4-05; OBDD 5-2010, f. 1-29-10, cert. ef. 2-1-10; Renumbered from 123-155-0350, OBDD 1-2011, f. & cert. ef. 1-3-11; OBDD 12-2012, f. & cert. ef. 8-15-12


 

Rule Caption: Modify rules relating to Enterprise Zone creation.

Adm. Order No.: OBDD 13-2012

Filed with Sec. of State: 8-15-2012

Certified to be Effective: 8-15-12

Notice Publication Date: 6-1-2012

Rules Adopted: 123-650-0075

Rules Amended: 123-650-0100, 123-650-0700, 123-650-1000, 123-650-1100, 123-650-2100, 123-650-2200, 123-650-7300, 123-650-9100

Rules Repealed: 123-650-0059

Subject: Rule modifications for the Enterprise Zone Program are being modified to reflect minor improvements, corrections or clarifications.

 Changes are made in the Enterprise Zone Program due to HB 3017 which was passed in the 2011 Legislative Session. These changes

 reflect the overall extension of the Enterprise Zone Program sunset date to 2025. HB 3672 was passed in the 2012 Legislative Session.

 Modifications are made to the rules to reflect additional enterprise zone numbers and size limitations.

 Housekeeping and technical corrections to these rules may occur to ensure consistency and comply with statute.

Rules Coordinator: Mindee Sublette—(503) 986-0036

123-650-0075

Maximum Number of Enterprise Zones

(1) The total number of enterprise zones allowed for designation is 65 under ORS 285C.080/285C.250, plus, as addressed in OAR 123-656;

(a) Any designation based on federal enterprise zone under ORS 285C.085 (which after it terminates becomes simply another regular enterprise zone through re-designation under ORS 285C.250); and

(b) Any designation of a reservation enterprise zone under ORS 285C.306(2), for which one is allowed for each federally recognized Indian Tribe in Oregon.

(2) Subject to change, the 62 enterprise zones presently in existence arose from the following provisions;

(a) Thirteen under ORS 285C.065 and 285C.080 (which permit five more designations, of which two must originally be rural);

(b) Forty-eight under ORS 285C.065 and 285C.250 (one of which was formerly designated under ORS 285C.085);

(c) None directly under ORS 285C.085; and

(d) One under ORS 285C.306(2).

(3) This rule does not pertain to:

(a) Designation of any federal enterprise zone in Oregon; or

(b) The existence of reservation partnership zones under ORS 285C.306(3), which are in addition to any maximum for the enterprise zones identified in this rule (see OAR 123-656).

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.050, 285C.065, 285C.080, 285C.115, 285C.250, 285C.306 & 285C.320
Hist.: OBDD 13-2012, f. & cert. ef. 8-15-12

123-650-0100

Definitions

ORS 285C.050 and OAR 123-001 (Procedural Rules) contain definitions used in this division of administrative rules. In addition, unless the context requires otherwise:

(1) “Applicant” means the Sponsoring Government or Governments submitting the application for an enterprise zone designation.

(2) “Census Statistical Unit” includes any standard geographic area, jurisdictional entity or administrative designation, for which the U.S. Bureau of Census or other federal, state or institutional/academic sources issue recurring economic data, including but not limited to the following: County, county subdivision, city, census tract, or, census block group.

(3) “Original enterprise zone” as used in ORS 285C.115(2) means the area within the boundary of the zone at the time when it was most recently designated, irrespective of intervening boundary amendments.

(4) “Enterprise Zone Population” means:

(a) For rural enterprise zones, the total population of incorporated cities, in which any part of the zone is located, plus the currently estimated population of Census Statistical Units that include unincorporated territory within the boundary of the zone; or

(b) For urban enterprise zones, the currently estimated population of Census Statistical Units that include area within the boundary of the zone and in any associated Target Community for the zone.

(5) “Preexisting Enterprise Zone” means an enterprise zone:

(a) Designated within three years of an enterprise zone’s being Terminated-by-Statute;

(b) For which at least one-half of its cosponsors comprised a majority of the cosponsors of the enterprise zone Terminated-by-Statute; and

(c) Recognized as the continuation of the previous enterprise zone, even though it is technically a new zone designation.

(6) “Round of Designation” means the period, not less than 90 days, beginning with the public notice and ending no sooner than with the effective date for the last of any resulting designations under ORS 285C.065, 285C.080 or 285C.250 (see OAR 123-650-2000).

(7) “Sponsoring Government” means a county, port or city participating as an Applicant in proposing an enterprise zone (or a district that has effectively the same governing body as the county, port or city, and that contains all the city, port or county territory inside the proposed zone).

(8) “Target Community” means an extensive residential area or group of such areas proximate to a proposed urban enterprise zone boundary, and encompassing a populace that the Applicant intends to explicitly help through employment opportunities and relevant public or private efforts or programs in relation to the proposed zone.

(9) “Terminated-by-Statute” means the automatic termination of an enterprise zone, previously designated under ORS 285C.065, 285C.080, 285C.085 or 285C.250, by operation of law after more than 10 years under ORS 285C.245(2).

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.050 - 285.250
Hist.: OBDD 23-2010, f. & cert. ef. 6-14-10; OBDD 13-2012, f. & cert. ef. 8-15-12

123-650-0700

Rural and Urban Designations

(1) As defined in ORS 285C.050(8), an “enterprise zone” is a designated area (or a reservation partnership zone under a co-sponsorship agreement), categorized as either “rural” or “urban” under ORS 285C.050(17) or (21).

(2) As used in ORS 285C.050(21), “regional or metropolitan urban growth boundary” means:

(a) The Metro/Portland-area regional urban growth boundary (UGB); or

(b) The UGB encompassing the largest city inside a federally established metropolitan statistical area (MSA) and any other city that jointly undertakes comprehensive planning with that city to determine their mutual UGB(s). Subject to change in federal MSAs or joint arrangements for inter-city planning, this currently includes the UGBs for:

(A) Bend;

(B) Corvallis;

(C) Eugene;

(D) Medford; and

(E) Salem and Keizer.

(3) For the purposes of ORS 285C.050(21), “inside” means that an enterprise zone may be neither designated nor amended to include areas both inside and outside a regional or metropolitan urban growth boundary, except for a (rural) reservation enterprise zone or reservation partnership zone.

(4) The rural/urban category of any existing (non-reservation) enterprise zone may switch according to a change in the circumstances with section (2) of this rule, for future purposes, as determined by the Department.

(5) If a new or newly modified regional or metropolitan urban growth boundary intersects an existing enterprise zone, the zone’s categorization as either urban or rural shall remain unchanged. If a subsequent modification to the regional or metropolitan urban growth boundary (or to the definition thereof) situates the zone entirely outside or inside of that boundary, then the zone’s categorization as rural or urban shall switch accordingly.

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.050 - 285C.250
Hist.: OBDD 23-2010, f. & cert. ef. 6-14-10; OBDD 13-2012, f. & cert. ef. 8-15-12

123-650-1000

Size and Distances

For purposes of an enterprise zone designation or boundary change:

(1) Except as allowed in OAR 123-650-1100:

(a) The straight-line distance between any two points within the zone may not exceed 12 miles if it is urban, or 15 miles if it is rural.

(b) A separate area of the zone must be five or fewer miles of straight-line distance away from another area of the zone as measured between the two closest points of each area.

(2) No part of the zone may be inside the boundary of another enterprise zone.

(3) The total area of the zone may not exceed 12 square miles if it is urban, or 15 square miles if it is rural, for which the following are ignored:

(a) Any road, track, transmission line or right of way that nominally connects separate areas of the zone; or

(b) Any area below the ordinary high water mark of navigable bodies of water, including but not limited to the borders/territory of this state corresponding to the jurisdiction of the zone sponsor, such as areas of the ocean up to three nautical miles directly from shore. (Nevertheless, property located in such are is inside the zone boundary).

(4) No part of this rule applies to federal enterprise zones, nor does it affect a rural renewable energy development zone under ORS 285C.353, consistent with OAR 123-680.

(5) Consistent with OAR 123-656:

(a) Other than section (2) no part of this rule restricts the designation or amendment of an enterprise zone based on a federal enterprise zone under ORS 285C.085.

(b) Other than sections (2) and (3) no part of this rule affects the designation or existence of a reservation enterprise zone under ORS 285C.306(2), except pursuant to a boundary change under 285C.115(3).

(c) No part of this rule pertains to a reservation partnership zone under ORS 285C.306(3), except pursuant to a boundary change under 285C.115(3).

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.065 & 285C.090
Hist.: OBDD 23-2010, f. & cert. ef. 6-14-10; OBDD 13-2012, f. & cert. ef. 8-15-12

123-650-1100

Extended Rural Distances

For purposes of ORS 285C.050(18), 285C.090(4) and 285C.120:

(1) This rule applies only to rural enterprise zones that are or will be at least partially outside a county, for which the latest estimate of the county’s total population divided by the current area exceeds 100 persons per square mile, known for purposes of this rule as a “densely populated county.”

(2) The maximum distance allowed in OAR 123-650-1000(1)(a) increases from 15 to:

(a) Twenty-five lineal miles, if no area of the zone is in a densely populated county; or

(b) Twenty lineal miles, if some but not all of the zone area lies in a densely populated county.

(3) The maximum distance allowed in OAR 123-650-1000(1)(b) increases from 5 to 15 lineal miles if none of the separate area is in a densely populated county.

(4) In accordance with ORS 285C.120(2), the Director may waive a limitation in section (2) or (3) of this rule to allow even greater distance pursuant to an enterprise zone designation or boundary change:

(a) As specifically requested by the Applicant for designation or the current zone sponsor and any proposed cosponsor;

(b) Such that the waiver is part of the Director’s order designating or changing the boundary of the enterprise zone boundary; and

(c) If evidence or indications as evaluated by the Department satisfy points described in section (5) of this rule.

(5) For a waiver as described in section (4) of this rule, the Director must find that each of the following three points is satisfied:

(a) The impracticality of separate enterprise zones as an alternative, such that relative to outstanding demand for available designations, an area proposed for inclusion in the zone will serve an isolated site or small community that might be infeasible on its own as a zone.

(b) Effective administration within the overall requested boundary appears likely, in that for example, it is located entirely in one county, traversable over relatively direct and efficient road distances, and the appointed zone management can take care of the entire zone, or the zone sponsor will devote sufficient resources for management of the extended zone.

(c) Furtherance of the goals and purpose of applicable state policies, such as state land use goals, or the opportunity to efficiently and expeditiously site a significant business investment, to serve an area exhibiting particular hardship, or to accommodate the expressed preference of the relevant local jurisdictions.

(6) Nothing in this rule affects the restriction on total enterprise zone area in OAR 123-650-1000(3).

Stat. Auth.: ORS 285A.075, 285C.060(1) & 285C.120(2)
Stats. Implemented: ORS 285C.050, 285C.065, 285C.090, 285C.120 & 285C.350
Hist.: OBDD 23-2010, f. & cert. ef. 6-14-10; OBDD 13-2012, f. & cert. ef. 8-15-12

123-650-2100

Mandatory Economic Need and Land

For purposes of designation, a proposed enterprise zone must demonstrate that the local economy is lagging, and that it contains land ready for development:

(1) Except as allowed in section (2) of this rule, a proposed enterprise zone must meet one of the following relative measures of economic hardship in order to qualify for designation:

(a) The proposed enterprise zone’s median income per household or mean income per capita is 80 percent or less of the equivalent statewide income;

(b) The proposed enterprise zone’s unemployment rate is at least 2.0 percentage points higher than the statewide unemployment rate;

(c) The proposed enterprise zone’s percentage of persons or families below the poverty level is at least five percentage points higher than the equivalent statewide percentage; or

(d) The change in Enterprise Zone Population during the most recent ten-year period is at least 15 percentage points less than the baseline growth for the statewide population. (For example, if the Enterprise Zone Population increased 10 percent, but the state’s population over the same ten-year period grew by 25 percent, the proposed enterprise zone would meet this qualification.)

(2) A proposed enterprise zone may nevertheless qualify for designation under ORS 285C.090(1)(c), if the Director finds based on evidence documented by the Applicant that the proposed zone will effectively serve communities with economic needs at least as severe as that represented in section (1) of this rule. This may include a combination of recently available facts and data for social and economic conditions, or for example, permanent closures or curtailments within 30 miles of the proposed zone that are associated with heavy job losses by specified employers during the three years preceding the application deadline.

(3) The proposed enterprise zone boundary must encompass significant land that is vacant, improvable and suitable for use and rapid development by eligible business firms.

(4) No part of this rule shall exclude enterprise zones so designated or amended under federal law or under ORS 285C.085, 285C.115 or 285C.306.

(5) The application form and instructions prepared by the Department for the Round of Designation are hereby incorporated into and made part of these administrative rules by reference, for purposes of an Applicant’s satisfying this rule with respect to how an Applicant shall:

(a) Assemble, aggregate and compare economic statistics;

(b) Properly relate those statistics to the proposed zone area and to this state or an equivalent basis;

(c) Document the adequacy and quantity of project-ready land;

(d) Undertake or integrate relevant strategic planning efforts; and

(e) Address other matters.

[Publications: Publications referenced are available from the agency.]

Stat. Auth.: ORS 285A.075, 285C.060(1), 285C.065(3) & 285C.250(4)
Stats. Implemented: ORS 285B.283, 285C.075, 285C.090 & 285C.250
Hist.: OBDD 23-2010, f. & cert. ef. 6-14-10; OBDD 13-2012, f. & cert. ef. 8-15-12

123-650-2200

Acceptance and Effect of Application

With a given Round of Designation:

(1) The application for designation of an enterprise zone as submitted by an Applicant:

(a) Shall include all items and information specified in OAR 123-650-2300, for which failure to perform an associated task may result in termination of the zone after designation under ORS 285C.245(5).

(b) May come from any city, port or county or combination of cities, ports or counties in accordance with OAR 123-650-0500, except as described in section (2) of this rule.

(c) Shall specify a name for the proposed zone corresponding to place names or common geographic or jurisdictional terms. (A Preexisting Enterprise Zone with the same name shall, as necessary, use suffix “II,” “III,” etc. for purposes of reapplication)

(d) May contain binding proposals by each Sponsoring Government (as indicated in its resolution) to provide local incentives under ORS 285C.065(4) to (6) (consistent with OAR 123-668-1300) to authorized or qualified business firms locating or expanding in parts of the proposed zone exclusive to that government’s political or service territory.

(e) Serves as an opportunity for a Preexisting Enterprise Zone to revise any existing policy.

(2) The Department shall reject an application if:

(a) The proposed zone includes area in any existing enterprise zone (including but not limited to a reservation partnership zone) unless the other zone will be Terminated-by-Statute at the round’s conclusion.

(b) Any Sponsoring Government is:

(A) A city, port or county that sponsored an enterprise zone terminated by order of the Director under ORS 285C.245(4) or (5), within 10 years by the time of expected designation, other than a county or port if a port/city also sponsored the terminated zone and none of the proposed enterprise zone area for designation was inside the terminated zone.

(B) A city (or a port without one or more different city cosponsors) that is also sponsoring a previously received application in the same round.

(C) A city with a population of less than 100,000 that sponsors an existing enterprise zone, unless it is a reservation partnership zone or will be Terminated-by-Statute at the round’s conclusion, or as specially allowed by the Director respective to other near-term terminations and anticipated re-applications.

(3) Only with application for an enterprise zone may a city or county establish under ORS 285C.070 that a business operating a hotel, motel or destination resort is eligible under ORS 285C.135(5)(c) in the enterprise zone or in part of the zone exclusive to the city’s or county’s entire jurisdiction. Moreover:

(a) Any such election or restriction depends on resolution(s) (jointly) adopted by all city and county Sponsoring Government(s).

(b) A Sponsoring Government may revise an election, restriction or lack thereof, regardless of what is in the application, by resolution(s) adopted not more than six months after the date of designation.

(c) For a Preexisting Enterprise Zone with an existing election, hotel/resort eligibility does not automatically carry over (such that future hotel/resorts are ineligible throughout the new zone without a positive election as described in this section).

Stat. Auth.: ORS 285A.075, 285C.060(1), 285C.065(3), 285C.066 & 285C.250(4)
Stats. Implemented: ORS 285C.065, 285C.070, 285C.075 & 285C.250
Hist.: OBDD 23-2010, f. & cert. ef. 6-14-10; OBDD 13-2012, f. & cert. ef. 8-15-12

123-650-7300

Economic Conditions

Under ORS 285C.115(2)(c), an area may be added to an enterprise zone only if it and adjoining residential areas are economically comparable to the original enterprise zone in a measurable way:

(1) Economic statistics or data for the original enterprise zone shall be:

(a) From the time of the application for designation of the zone; or

(b) As are most recently available.

(2) For purposes of the boundary change request and OAR 123-650-7000(4), general commentary shall suffice for this issue if it is readily apparent that any area for addition to the zone:

(a) Is virtually devoid of and geographically removed from residential areas; or

(b) Has/borders only residential areas with similar or worse economic hardship conditions.

(3) If the case is less plain than indicated in section (2) of this rule, then the request shall contain a suitable comparison of the original enterprise zone’s economics as described in OAR 123-674-2100 to Census Statistical Units that contain, overlap or are appropriately adjacent to areas to be added to the zone.

(4) The comparison in section (3) of this rule must show that such Census Statistical Units, based on the most recently available data, have:

(a) Less than 20 percent of their land zoned for residential use; or

(b) Generally the same or a lower household or personal income, or a higher unemployment rate, or otherwise equivalent or more severe economic conditions, compared to the original enterprise zone.

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.115
Hist.: OBDD 23-2010, f. & cert. ef. 6-14-10; OBDD 13-2012, f. & cert. ef. 8-15-12

123-650-9100

Events and Timing

(1) Determinations by the Director on the designation, termination or rejection of an application for designation of an enterprise zone are final.

(2) Enterprise zones that are Terminated-by-Statute or are designated as replacements under ORS 285C.250(1) shall be terminated or designated effective at 12 midnight of July 1.

(3) Any zone that is designated under ORS 285C.250(1) to replace an enterprise zone that was concurrently Terminated-by-Statute shall not itself terminate under ORS 285C.245(2) until, in effect 11 years after its designation.

(4) Following the termination of an enterprise zone:

(a) The local policies adopted by the zone sponsor under ORS 285C.105 or other statutory provisions shall remain in force as they were at the time of termination.

(b) The only change that the sponsor of the terminated zone may make to the zone’s local policies is to appoint a replacement as needed for the local zone manager, if the position previously held by the local zone manager lacks qualified personnel.

(5) Termination under ORS 285C.255(1)(c) — that is, statutory sunset of enterprise zone program — occurs at 12:01 AM on June 30, 2025.

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.050 - 285C.250 & 285C.255
Hist.: OBDD 23-2010, f. & cert. ef. 6-14-10; OBDD 13-2012, f. & cert. ef. 8-15-12


 

Rule Caption: Modify rules relating to Electronic Commerce Enterprise Zones.

Adm. Order No.: OBDD 14-2012

Filed with Sec. of State: 8-15-2012

Certified to be Effective: 8-15-12

Notice Publication Date: 6-1-2012

Rules Amended: 123-662-1200

Subject: Rule modifications for the Electronic Commerce Enterprise Zone Program are being modified to reflect minor improvements, corrections or clarifications.

 Housekeeping and technical corrections to these rules may occur to ensure consistency and comply with statute.

Rules Coordinator: Mindee Sublette—(503) 986-0036

123-662-1200

Designated Areas

(1) If the Legislature allows additional electronic commerce designations under ORS 285C.095, which are currently limited to 10 enterprise zones, the Department will seek applications in accordance with OAR 123-662-1000 through the local zone managers of all existing enterprise zones that are not already E-commerce zones.

(2) The Department shall maintain and publicize information identifying which enterprise zones are currently E-commerce zones.

(3) The termination for any reason under ORS 285C.245 of an enterprise zone that is an E-commerce zone shall immediately allow another enterprise zone to receive their electronic commerce designation in accordance with OAR 123-662-1000.

(4) The City of North Plains in Washington County is a city designated for electronic commerce under ORS 285C.100 effective on March 4, 2002, such that

(a) All areas then or later inside the city limits or urban growth boundary of the City of North Plains are equivalent to an “E-commerce zone,” as used in this division of administrative rules, but only for purposes of Electronic Commerce and business firms that are eligible on that basis under ORS 285C.050 to 285C.250 and 315.507.

(b) The city shall act as the effective zone sponsor and take responsibility for all duties of a zone sponsor as they apply to an Electronic Commerce business firm seeking to utilize areas of the city for special benefits.

[Publications: Publications referenced are available from the agency.]

Stat. Auth.: ORS 285A.075, 285C.050(5), 285C.060(1) & 285C.095(2)
Stats. Implemented: ORS 285C.095, 285C.100 & 285C.135
Hist.: OBDD 25-2010, f. & cert. ef. 6-14-10; OBDD 14-2012, f. & cert. ef. 8-15-12


 

Rule Caption: Modify rules relating to Standard Exemptions on Taxable Enterprise Zone Property.

Adm. Order No.: OBDD 15-2012

Filed with Sec. of State: 8-15-2012

Certified to be Effective: 8-15-12

Notice Publication Date: 6-1-2012

Rules Amended: 123-674-0200, 123-674-1500, 123-674-1700, 123-674-2100, 123-674-4100, 123-674-4200, 123-674-5300, 123-674-7200, 123-674-7210, 123-674-7220, 123-674-7230, 123-674-7240, 123-674-7250, 123-674-8100

Subject: Rule modifications for Standard Exemptions on Taxable Enterprise Zone Property are being modified to reflect minor improvements, corrections or clarifications.

 Housekeeping and technical corrections to these rules may occur to ensure consistency and comply with statute.

Rules Coordinator: Mindee Sublette—(503) 986-0036

123-674-0200

“Employment” Terminology

As used in OAR 123-674-0100, with respect to counting the “number of employees” for purposes of this division of administrative rules, especially 123-674-4000 to 123-674-4800:

(1) It does not involve averaging based on hours worked, such as full-time equivalency, but rather relies on counting full-time, year-round jobs associated with relevant business operations throughout the enterprise zone, either at a particular time or on average over a year or 12-month period.

(2) It relates primarily to “employees of the firm” or “employment of the firm,” as used in ORS 285C.200 and 285C.210, which:

(a) Includes positions or persons who are:

(A) Employed directly by the business firm, or retained by lease or contract with the person or a third party, but the firm selected and directly manages them;

(B) Engaged a majority of their time in eligible operations under ORS 285C.135, including but not limited to persons who perform eligible activities as described in OAR 123-674-1100 or 123-674-1200(3) or (4); and

(C) Located anywhere inside the enterprise zone in terms of where they spend at least 75 percent of their time on the job, as well as official work site.

(b) Excludes positions or persons who are employed or performing work:

(A) At temporary or seasonal jobs;

(B) For 32 or fewer hours per week;

(C) Solely in the construction, modification or installation of qualified property;

(D) Regularly outside the zone boundary;

(E) The majority of their time in ineligible operations; or

(F) With any other business firm, including but not limited to affiliates or commonly owned companies.

(3) Consistent with subsection (2) of this rule, only full-time jobs with the firm that are filled indefinitely and exist year-round at the firm’s eligible operations inside the zone are normally counted. The following are exceptions:

(a) Only employees who work at the particular headquarter-type facility (see OAR 123-674-1700) matter, irrespective of other eligible employees inside the zone and paragraph (2)(a)(C) of this rule;

(b) For the transfer of eligible operations within 30 miles of zone boundary, further requirements described in OAR 123-674-4100(4) and 123-674-4600(2) also cover employees at affected sites outside the zone.

(c) The prohibition on jobs losses more than 30 miles outside the zone also encompasses persons employed:

(A) At any type of business operation in Oregon, not only the eligible kind, as are transferred into the zone; and

(B) By any commonly control company (see 123-674-4200).

(d) Jointly owned firms may combine their employment throughout the zone subject to section (4) of this rule.

(e) Temporary workers filling permanent positions are acceptable if the county assessor and the local zone manager conclude that:

(A) The qualified business firm is making every reasonable effort to fill such positions with permanent, regular hires; and

(B) The temporary workers and other potentially available job applicants do not meet reasonable, minimum standards of the firm for permanent hire, such as a high school diploma or equivalency.

(4) Under ORS 285C.135(4), two or more business firms with 100-percent common ownership may elect to be treated as a single firm for combining zone employment, irrespective of paragraph (2)(b)(F) of this rule, if authorized representative(s) of the firms or a parent company formally notify the local zone manager and county assessor to that effect before or with the initial exemption claim under 285C.220. Such an election affects all applicable provisions under 285C.050 to 285C.250 and this division of administrative rules, including but not limited to rendering moot any inter-firm lease of qualified property (which would then all be simply owned by the Firm/applicant), but it does not carry over to any subsequent authorization except in a terminated zone.

(5) Only newly created jobs may satisfy required increases in employment levels, as opposed to any employee associated with the merger or acquisition of another business firm or its existing operations or property, except positions inside the zone that were vacant for 60 or more days at the time of Application, and for which reemployment was otherwise unlikely.

(6) As used in this rule and under ORS 285C.050:

(a) “Person” may mean two or more part-time employees who together perform a single job involving more than 32 hours of work per week by virtue of an established (job-sharing) arrangement.

(b) “32 hours per week” is computed by taking the total number of hours over the course of a year, for which the person is reimbursed in the form of wage or salary, including but not limited to paid holidays, vacation and so forth, and dividing by 52.

(c) “Temporary or seasonal jobs” are nonpermanent positions, including but not limited to persons acquired and receiving compensation through the firm or an outside agency on a short-term, ad hoc or as-needed basis, or where the firm hires, leases or contractually employs a persons for any anticipated period of less than 12 consecutive months.

(7) There is no necessary relationship between minimum employment requirements and the requisite First Source Hiring Agreement, as addressed in OAR 123-070 and 123-674-7700 to 123-674-7730.

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.050, 285C.135, 285C.200 & 285C.210
Hist.: OBDD 27-2010, f. & cert. ef. 6-14-10; OBDD 31-2010, f. 6-30-10, cert. ef. 7-1-10; OBDD 15-2012, f. & cert. ef. 8-15-12

123-674-1500

Local Option for Hotels, Motels and Destination Resorts

(1) For purposes of exemption under ORS 285C.175 (but not ORS 285C.170) on qualified property owned or leased and operated by a Firm/applicant as a hotel, motel or destination resort inside an enterprise zone, with respect to eligibility under ORS 285C.135(5)(c), the business firm and the property must:

(a) Satisfy all applicable requirements; and

(b) Locate in a zone or portion of a zone as permitted under ORS 285C.070 and described in section (2) of this rule.

(2) For hotel/resort businesses, allowable enterprise zones include:

(a) Any future enterprise zone that is acknowledged by the Director in the order of designation as having opted to exempt such qualified property under ORS 285C.070 (see OAR 123-650-2200); and

(b) Subject to change, the following 41 current enterprise zones:

(A) The entire area of the Baker/County, Bay Area, Cascade Locks/Hood River, Columbia Cascade, Columbia River, Coquille Valley, Estacada, Florence, Forest Grove/Cornelius, Fossil, Grande Ronde, Grant County, Greater Umatilla, Harney County/Burns/Hines, Harrisburg, Jackson County, Klamath Falls/Klamath County, Lake County/Lakeview, Lower Umpqua, Malheur County, Medford Urban, Molalla, Port Orford, Roberts Creek, Rogue, Sandy, Sherman County, South Columbia County, South Douglas County, Sutherlin/Oakland, Sweet Home, The Dalles/Wasco County, Tillamook, Veneta and Woodburn Enterprise Zones and the Cottage Grove, Creswell & Southern Lane County Enterprise Zone;

(B) The Dallas/Independence/Monmouth Enterprise Zone, except for any area of Polk County outside city limits;

(C) The Deschutes Rural Enterprise Zone, except for any area of Deschutes County outside city limits;

(D) The Jefferson County Enterprise Zone, except for the incorporated territory of the City of Madras;

(E) The Lower Columbia Maritime Enterprise Zone, except for the incorporated territory of the City of Rainier; and

(F) The South Santiam Enterprise Zone, except for the incorporated territory of the cities of Albany, Millersburg and Tangent.

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.070, 285C.135 & 285C.185
Hist.: OBDD 27-2010, f. & cert. ef. 6-14-10; OBDD 15-2012, f. & cert. ef. 8-15-12

123-674-1700

Headquarter Facilities

For purposes of ORS 285C.135(5)(b):

(1) A Firm/applicant and its operations are eligible, regardless of retail, financial, professional or other such ineligible activities, if:

(a) The business is operating at two or more sites in significant ways outside of the enterprise zone;

(b) The operations in the zone support and serve the firm’s other operations throughout this state or throughout a multiple-state or larger region; and

(c) In approving the Application, the local zone manager includes a formal finding by the sponsor pursuant to the Preauthorization Conference under ORS 285C.140(7).

(2) The formal finding for subsection (1)(c) of this rule shall:

(a) Describe how the proposed investment and the business firm will satisfy subsections (1)(a) and (b) of this rule, including indications of applicable services, relevant region and the relationship among intra-firm operations; and

(b) State that the proposed investment is significant for the enterprise zone and the local economy succinctly explaining the reasons for this significance, such as size of anticipated operations relative to local measures of commerce, special job opportunities, diversification, strategic, marketing or visibility objectives of the zone, or other impacts.

(3) As required under ORS 285C.180(2)(g), the business firm may not qualify for the exemption under ORS 285C.175, if the actual investment in qualified property does not essentially conform to the proposed investment as described in the Application and section (2) of this.

(4) The local zone manager may modify the formal finding prior to an authorized business firm qualifying for the exemption, consistent with Application amendment in OAR 123-674-3200.

(5) For purposes of OAR 123-674-4000 to 123-674-4800, as provided under ORS 285C.200(7)(b)(B), only the employees working at a facility described in this rule are counted consistent with OAR 123-674-0200(3)(a).

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.135, 285C.140, 285C.180 & 285C.200
Hist.: OBDD 27-2010, f. & cert. ef. 6-14-10; OBDD 15-2012, f. & cert. ef. 8-15-12

123-674-2100

Allowably Late Applications

Notwithstanding OAR 123-674-2000(2), the zone manager may accept an Application after:

(1) Certain physical work that consists only of:

(a) Demolition, cleanup, environmental remediation, removal of hazardous materials, and so forth;

(b) On-site delivery, storage or upkeep of materials or elements of qualified property prior to construction/installation activity; or

(c) Construction or the like that occurred and completely ceased six months or longer before Application, consistent with paragraph (3)(b) of OAR 150-258C.180, insofar as the property is never placed in service and the Application precedes the resumption of work.

(2) The commencement of hiring or physical work, if the Application wholly replaces a previously submitted Application by December 31 immediately before the initial year of exemption consistent with OAR 123-674-3200, such that in this case, the originally submission date is used.

(3) The commencement of hiring or physical work pursuant to a waiver issued by the Department of Revenue, or as otherwise allowed under ORS 285C.140(11) and (12).

(4) The commencement of physical work on a qualified building or structure (aside from associated machinery & equipment) under 285C.145(2), if the following are true:

(a) Firm/applicant did not own or lease any such building or structure, or have a binding obligation to do so, at any time before the commencement of construction, reconstruction or modifications;

(b) Firm/applicant includes a copy of an executed lease or purchase agreement for the qualified building or structure with the Application;

(c) Firm/applicant does not have any familial, employment, corporate or other such entity relationship with the owner or previous owner of the building or structure; and

(d) Approval of the Application occurs before the Firm/applicant begins to use or occupy the building or structure for commercial operations.

(5) The commencement of physical work on one type of property that will not qualify, but before work begins on other property that may qualify, as differentiated consistent with ORS 285C.180(1) and described in OAR 123-674-3100(3).

(6) Even the completion of construction, modifications or installations as otherwise allowed in sections (2) to (5) of this rule.

Stat. Auth.: ORS 285A.075, 285C.060(1) & 285C.140(12)
Stats. Implemented: ORS 285C.140 & 285C.145
Hist.: OBDD 27-2010, f. & cert. ef. 6-14-10; OBDD 15-2012, f. & cert. ef. 8-15-12

123-674-4100

Employment Requirement to Qualify Initially

To receive and begin an enterprise zone exemption under ORS 285C.175, an authorized business firm must qualify by filing under ORS 285C.220 and 285C.225 (as described in OAR 123-674-6100):

(1) The first Claim Employment must equal or exceed the greater of one plus, or 1.1 times, Existing Employment. (If the actual Claim Employment is insufficient, the requirement under ORS 285C.200(1)(c) is still met if a sufficiently high level of employment was achieved at any time prior to April 1 but after Application, as explained by the business firm in an attachment to the claim form)

(2) For a subsequent exemption on additional qualified property pursuant to the same Application, as described in OAR 123-674-3100(4), the requirement of section (1) of this rule has effectively already been satisfied.

(3) If section (1) of this rule is not satisfied, then the county assessor shall deny the exemption claim and not grant any exemption under ORS 285C.175 on qualified property, except with a waiver by the zone sponsor and qualification as described in OAR 123-674-4300. Such denial does not directly affect the firm’s authorization status and its ability to qualify other (later) property under ORS 285C.170 or 285C.175.

(4) Under ORS 285C.200(6), the transfer of eligible employees, jobs or positions into the zone from a site within 30 miles outside the zone boundary triggers an additional requirement in terms of section (1) of this rule, insofar as any part of the transfer occurred between the time of Application and the end of the initial year of exemption. For purposes of this section’s additional requirement, the definitions of Claim Employment and Existing Employment are expanded to include the number of employees located at any such site, as well as those inside the zone.

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.050, 285C.175, 285C.200, 285C.220 & 285C.225
Hist.: OBDD 27-2010, f. & cert. ef. 6-14-10; OBDD 15-2012, f. & cert. ef. 8-15-12

123-674-4200

Diminishing Employment Well beyond the Zone

Under ORS 285C.200(1)(d) and (5), an authorized business firm seeking an exemption in any enterprise zone may not qualify or remain qualified, if the firm transfers operations into the zone involving the closure or curtailment of operations and any drop in employment or job losses elsewhere in this state:

(1) Unless the originating location is 30 miles or less from the boundary of the zone, and the firm meets the requirements under ORS 285C.200(6) and 285C.210(2)(c) described in OAR 123-674-4100(4) and 123-674-4600(2).

(2) Except if the firm demonstrates, with or without the assistance of the zone sponsor, to the satisfaction of the county assessor or the Department that the curtailment/job losses:

(a) Occurred entirely before Application;

(b) Occur entirely after the initial year of exemption on qualified property;

(c) Will not be permanent, such that restoration of the jobs is reasonably likely and does in fact happen on or before December 31 of the initial year of exemption;

(d) Pertain to business operations that the firm does not control in any way through common ownership, corporate affiliation, contracts governing relevant operations, or the like;

(e) Are completely unrelated to investments in the zone, such that there is effectively no transfer of curtailed operations or jobs into the zone; or

(f) Have only de minimis impact, which the Department may deem true if job losses will amount to less than one hundredth of 1 percent (0.01%) of the most recently available figure from the State Employment Department for annual average total nonfarm, private employment in the county experiencing curtailed operations.

(3) For purposes of this rule, transferred operations and curtailed employment relate to any type of business activity, including but not limited to what would be ineligible in an enterprise zone.

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.200, 285C.210 & 285C.240
Hist.: OBDD 27-2010, f. & cert. ef. 6-14-10; OBDD 15-2012, f. & cert. ef. 8-15-12

123-674-5300

Buildings, Structures and Other Real Property

For purposes of enterprise zone property to be exempt under ORS 285C.170 or 285C.175:

(1) A building, structure or newly installed real property machinery & equipment does not qualify, unless the cost of all such property in a single property schedule under ORS 285C.225 equals or exceeds $50,000 in total.

(2) Qualified property, including but not limited to a building or structure, is severable under ORS 285C.180(5) (which does not pertain to the matter of timely Application), such that:

(a) A part of the building or structure may be exempt, even if another part of the same building or structure is owned or leased by a different business firm, used for ineligible activities, or otherwise not subject to the same exemption; and

(b) The amount of property value that is exempt shall be determined through pro rata calculation based on floor area or other reasonable method, as preferably considered with the Preauthorization Conference, and verified by the zone sponsor, as necessary.

(3) If so classified by the county assessor as structural improvements rather than enhancements to the land, landscaping or comparable elements may qualify, for example, a golf course in the case of a hotel, motel or destination resort under ORS 285C.185(4).

(4) The exemption on qualified additions, modifications, reconditioning, refurbishment, retrofits or upgrades under ORS 285C.175(3)(b) is measured in each year by:

(a) Computing the assessed value of such taxable property (lesser of real market value or maximum assessed value in each case):

(A) With such qualified improvements or changes; and

(B) Without such qualified improvements or changes (that is, the assessed value that would have been subject to taxation) accounting for other concurrent changes to property.

(b) Taking the difference between the values described in paragraphs (a)(A) and (a)(B) of this section, such that any negative difference equates to zero.

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.175, 285C.180, 285C.185 & 285C.190
Hist.: OBDD 27-2010, f. & cert. ef. 6-14-10; OBDD 15-2012, f. & cert. ef. 8-15-12

123-674-7200

Special Terminology

For purposes of OAR 123-674-7200 to 123-674-7250, with respect to an eligible business firm compliance with other laws under ORS 285C.200(1)(f):

(1) “Determination” means either of the following:

(a) A rightfully available written admission by the firm of a Noncompliance; or

(b) The issuance of an order, ruling or similar action by a duly empowered court, regulatory authority or similar entity that is:

(A) An official finding of Noncompliance that has the force of law under the jurisdiction of the court, regulatory authority or similar entity; and

(B) The final action by the particular regulatory or judicial process, even if prior to potential appeals.

(2) “Event of Noncompliance” means a Determination corresponding to an Illegal Act, for which the underlying Noncompliance is both:

(a) Material, as described in OAR 123-674-7230; and

(b) Not cured in accordance with OAR 123-674-7240.

(3) “Illegal Act” means an action, omission, chain of occurrences or similar failings by the firm or by an officer or agent in the conduct of the firm’s operations and activities, effectively occurring after the Application but before January 1 of the last year of exemption, that cause the Noncompliance corresponding to the relevant Determination. (An Illegal Act may also result from Noncompliance with a Determination related to an earlier act)

(4) “Noncompliance” means a violation of a law, as enacted by one of the following, or the violation of any of the rules or regulations duly promulgated under such law:

(a) The United States Congress;

(b) The Oregon Legislative Assembly; or

(c) The governing body of a city or county that sponsors the enterprise zone.

(5) “Substantial Falsification” means that information in an enterprise zone form, filing or associated documentation by the firm, subject to declaration under penalties of false swearing, does one or both of the following:

(a) Misreports or omits required information, such that the enterprise zone exemption would have been denied or disqualified had the information been correctly or completely reported, which by itself shall be considered an Illegal Act in addition to any penalties resulting from false swearing under ORS 305.990; or

(b) Contradicts OAR 123-674-7210(1), in that at the time of the relevant declaration, the firm failed to disclose an Illegal Act, of which it should reasonably have been aware, including but not limited to one that is pending a Determination at the time of authorization.

Stat. Auth.: ORS 285A.075, 285C.060(1) & 285C.200(7)
Stats. Implemented: ORS 285C.200
Hist.: OBDD 27-2010, f. & cert. ef. 6-14-10; OBDD 15-2012, f. & cert. ef. 8-15-12

123-674-7210

Declarations and Responsibilities

(1) Any Department of Revenue form for an enterprise zone tax abatement shall also have the firm declare that it is in compliance with applicable laws described in OAR 123-674-7200(4), as part of the declaration made under penalties of false swearing (as to the truth and correctness of the form or document under ORS 305.810 and 305.815).

(2) Without clear evidence of a Determination:

(a) The county assessor is under no obligation to undertake any effort for purposes of ORS 285C.200(1)(f); and

(b) The exemption on qualified property of an otherwise qualified business firm is unaffected.

(3) Regardless of expertise or jurisdiction, any entity or person may present evidence of a Determination to the county assessor.

Stat. Auth.: ORS 285A.075, 285C.060(1) & 285C.200(7)
Stats. Implemented: ORS 285C.125 & 285C.200
Hist.: OBDD 27-2010, f. & cert. ef. 6-14-10; OBDD 15-2012, f. & cert. ef. 8-15-12

123-674-7220

Effect of Event of Noncompliance

Upon an Event of Noncompliance:

(1) In the case where an authorized business firm is not yet qualified, the county assessor shall deny exemption under ORS 285C.170 or 285C.175.

(2) In the case where the firm is receiving or has received the exemption, the Event of Noncompliance shall cause retroactive disqualification (see OAR 123-674-6400).

(3) In response to or in anticipation of such denial or disqualification, the assessor shall give notice that:

(a) Is sent to the firm and is copied to the zone sponsor, the Department of Revenue and the Department;

(b) Provides the firm with an explanation of the action and includes copies or descriptions of the evidence for the Determination; and

(c) Explains how the firm may appeal the action or anticipated action to the Tax Court under ORS 305.404 to 305.560.

(4) The county assessor may reverse a decision or action in section (1) or (2) of this rule, for reconsideration of an issue listed in OAR 123-674-7250(1) or a successful appeal that negates the Determination. As necessary to effect a reversal for this section, the assessor may reinstate the exemption and refund taxes paid on qualified property to the firm consistent with provisions of ORS Chapter 311.

(5) If the Determination is appealed by the business firm through administrative or judicial channels under the law in question, then the assessor may indefinitely suspend the action as described in section (2) of this rule, such that:

(a) If the business firm prevails in the appeal, then the exemption is unaffected; or

(b) If the business exhausts, withdraws or effectively fails in its pursuit of such appeal, then the action takes effect. In such a case, the assessor may add interest to any back taxes during the intervening period for the appeals process, until the next general property tax roll, as provided under ORS 311.206.

(6) The business firm’s right to appeal actions or tax collections directly to the Oregon Tax Court is in no way infringed by this or any administrative rule, nor is it prevented by ORS 285C.200(7).

(7) Section (5) and (6) of this rule operate only in lieu of using ORS 285C.240(6), as described in OAR 123-674-6600 to 123-674-6630.

Stat. Auth.: ORS 285A.075, 285C.060(1) & 285C.200(7)
Stats. Implemented: ORS 285C.125 & 285C.200
Hist.: OBDD 27-2010, f. & cert. ef. 6-14-10; OBDD 15-2012, f. & cert. ef. 8-15-12

123-674-7230

Materiality

An eligible business firm’s Noncompliance is material for purposes of ORS 285C.200(1)(f), only if all of the following are true:

(1) Zone-Applicable. It is related to or part of actual operations of and by the business firm within the enterprise zone boundary, including firm-wide activities that actually influence affairs in the zone, as well as elsewhere that the firm operates, such that:

(a) The Illegal Act(s) might still occur outside the zone and be material if derivable from or directly beneficial to operations of the firm in the zone; but

(b) Even if the Determination circumstantially indicates illicit intent by firm personnel or decisions, it is still be immaterial, if lacking evident effect on tangible activities or behavior at zone locations.

(2) Significant. It has or could conceivably harm, threaten, disrupt or undermine any of the following: An individual person, fair and honest commerce, government revenue collection, others’ property rights, environmental protection, public health and safety, the general welfare and so forth, in contrast to a Noncompliance that results only in inconveniences (e.g., parking violations), aesthetical problems (e.g., poor landscape maintenance), etc.

(3) Substantive. It relates to the actual behavior or effects that the law in question is intended to control or prevent, as opposed to failings or missteps in terms of procedural matters, data reporting or similar technicalities, unless such failings or missteps exhibit willfulness, perniciousness or a history of repetition.

Stat. Auth.: ORS 285A.075, 285C.060(1) & 285C.200(7)
Stats. Implemented: ORS 285C.200
Hist.: OBDD 27-2010, f. & cert. ef. 6-14-10; OBDD 15-2012, f. & cert. ef. 8-15-12

123-674-7240

Cure

As a consequence of actions taken by an eligible business firm in response to a Determination, it may still comply with the law and, in effect, cure the Noncompliance for purposes of ORS 285C.200(1)(f), such that:

(1) A Noncompliance is not curable if, in the presence of clear and convincing evidence, the Illegal Act in question is:

(a) Heinous, reckless or knowingly perpetrated or allowed to happen as a matter of firm policy; or

(b) Committed within five years of a previous determination relating to the same or similar violation of the law, regardless if the prior violation occurred:

(A) Before authorization;

(B) At a location outside the enterprise zone; or

(C) Under another U.S. state’s or locality’s laws or regulations.

(2) A Noncompliance is also incurable if the total monetary penalty as described in subsection (3)(a) of this rule exceeds a level publicly declared for purposes of this rule and established by the zone sponsor before the Determination became final. According to stipulations in the sponsor’s declaration, this level or levels shall be equal to or greater than:

(a) For a fine or fines levied by a regulatory agency under a single citation or for closely related violations, $100,000; and

(b) Overall, including but not limited to court-imposed damages, $500,000.

(3) A Noncompliance, except as precluded by section (1) or (2) of this rule, may be cured insofar as the firm fully and clearly documents or demonstrates for the county assessor that:

(a) All fines, damages and so forth arising from the Determination have been paid in full, according to the final regulatory or judicial assessment imposed;

(b) The firm promptly submitted to and fulfilled all other applicable penalties and has taken or has demonstrable plans to take all other actions, as required by the court, regulatory authority or similar entity;

(c) The circumstances that led to the Noncompliance have been eliminated and resolved, such that further Noncompliance by the firm of a comparable or more serious nature is not expected to occur; and

(d) It or associated entities have undertaken reasonable efforts to compensate other substantially harmed parties uninvolved with any court action.

(4) The decision to consider a Noncompliance cured happens on a one-time basis and shall not necessarily be subject to neither ongoing action by the firm nor continual verification.

Stat. Auth.: ORS 285A.075, 285C.060(1) & 285C.200(7)
Stats. Implemented: ORS 285C.200
Hist.: OBDD 27-2010, f. & cert. ef. 6-14-10; OBDD 15-2012, f. & cert. ef. 8-15-12

123-674-7250

Interpretation

With respect to the interpretation of OAR 123-674-7200 to 123-674-7250 for purposes of ORS 285C.200(1)(f):

(1) There are five primary issues related to the conclusion that there is an Event of Noncompliance:

(a) Is there a Determination as defined?

(b) Did the Illegal Act occur as defined? ..., after Application?

(c) Is the Noncompliance of a material nature?

(d) Is the Noncompliance curable ..., and if so, has it been cured?; or

(e) Has there been Substantial Falsification, and what are the implications of it?

(2) In deciding whether there is an Event of Noncompliance, the county assessor may do as follows at the assessor’s initiative or in response to issues raised by a business firm’s response to notice in OAR 123-674-7220(3):

(a) The assessor may submit the question at issue to the sponsor of the enterprise zone whether through the local zone manager or otherwise, such that:

(A) The submission is made in writing with a summary of the matter and copies sent to the affected business firm, the Department of Revenue and the Department; and

(B) The assessor may consider a written decision from the zone sponsor only within a prescribed period not exceeding 60 days after the submission.

(b) Either in lieu of or subsequent to the request of the zone sponsor, the assessor may submit the question or questions to the Director, such that:

(A) The submission is in writing with a summary of the matter, and the affected business firm, the Department of Revenue and the zone sponsor receive copies;

(B) The assessor certifies whether a conclusive response by the Director shall bind the assessor’s action in OAR 123-674-7220;

(C) The Director may request additional information from the assessor, the firm, the sponsor, the Department of Revenue or the Department of Justice; and

(D) The Director shall respond in writing to the question or questions submitted by the assessor, who shall treat it as official state interpretation of this division of administrative rules.

Stat. Auth.: ORS 285A.075, 285C.060(1) & 285C.200(7)
Stats. Implemented: ORS 285C.200
Hist.: OBDD 27-2010, f. & cert. ef. 6-14-10; OBDD 15-2012, f. & cert. ef. 8-15-12

123-674-8100

Authorization and Zone Termination

Consistent with OAR 123-650-9100:

(1) For purposes of exemption under ORS 285C.175 in a terminated enterprise zone, an eligible business firm is ‘authorized’ and may claim the exemption, subject to OAR 123-674-8300 and section (2) of this rule, if:

(a) Its outstanding authorization was still active under ORS 285C.165 at the time of termination, in which case it may avail itself of OAR 123-674-8200 and grandfathering in the zone; or

(b) The local zone manager received the Application before the effective termination of the zone, and the zone sponsor and the county assessor subsequently approved the Application under ORS 285C.140 after termination.

(2) For any authorized business firm described in section (1) of this rule, its authorization expires on January 1 directly after the 30th month of the zone’s termination, such that only if qualified property proposed pursuant to the Application is in service before that date does the firm remain authorized under ORS 285C.245(1)(a)(B)(ii) and may it receive the exemption. As such, ORS 285C.165 (active status of authorization) is irrelevant for qualified property remaining outside of a current enterprise zone.

(3) In order to successfully apply for authorization on any investment in qualified property at a location in a terminated zone remaining outside any current designation, the Firm/applicant must satify the grand-fathering provisions in accordance with OAR 123.674-8200. In addition:

(a) Only if also qualified in the zone at the time of its termination may a firm described in subsection (1)(a) of this rule re/apply respective to the same location; and

(b) Unless otherwise qualified or authorized (as described by section (1)(a) of this rule) in the zone at the time of its termination, an authorized business firm described in subsection (1)(b) of this rule

(A) May not utilize the grandfathering provisions; and.

(B) As such, may not ever apply for authorization anywhere in the terminated zone.

(4) For purposes of this rule and OAR 123-674-8200, an eligible business that has its site in the zone (inadvertently) removed by a boundary change, notwithstanding ORS 285C.115(2)(b), has the same rights and privileges as if the zone had terminated.

(5) For purposes of termination under ORS 285C.255 — that is, statutory sunset of enterprise zone program — the Application must be made before June 30, 2025 and (notwithstanding subsection (1)(b) of this rule) approved not later than that day.

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.140, 285C.175, 285C.245 & 285C.255
Hist.: OBDD 27-2010, f. & cert. ef. 6-14-10; OBDD 15-2012, f. & cert. ef. 8-15-12


 

Rule Caption: Modify rules relating to Rural Renewable Energy Development Zones.

Adm. Order No.: OBDD 16-2012

Filed with Sec. of State: 8-15-2012

Certified to be Effective: 8-15-12

Notice Publication Date: 6-1-2012

Rules Amended: 123-680-1600

Subject: Rule modifications for the Rural Renewable Energy Development Zones are being modified to reflect minor improvements, corrections or clarifications.

 Housekeeping and technical corrections to these rules may occur to ensure consistency and comply with statute.

Rules Coordinator: Mindee Sublette—(503) 986-0036

123-680-1600

Further Distinctions from an Enterprise Zone Exemption

For an RREDZ exemption relative to OAR 123-674 and the provisions under ORS 285C.050 to 285C.250:

(1) The application for authorization needs to give special attention to characterizing the proposed investment in qualified property, clarifying how it relates to renewable energy, and estimating its real market value by January 1 of the first full calendar year of operations.

(2) To be exempt, the qualified property must essentially correspond to the description in the application.

(3) For purposes of a business firm’s receiving authorization and then qualifying:

(a) An “eligible business firm” under ORS 285C.135 relates only to such operations or business activities that are engaged in renewable energy.

(b) The “employment of the firm” under ORS 285C.200 and 285C.210:

(A) Relates only to employees engaged a majority of their time in eligible renewable energy operations within the RREDZ.

(B) Satisfies requirements for the addition of one or more employees based on the number of employees, who work throughout the entire city, county or counties, as applicable.

(4) The exemption is essentially the same as that under ORS 285C.175, once property has been placed in service. There is, however, no special exemption provided during construction like that under ORS 285C.170. although the exemption under ORS 307.330 may be used as otherwise allowed.

(5) For purposes of an additional one or two years of exemption on qualified property (following the standard three-year period) inside a county that is a contiguous part of the RREDZ, but that is not the sponsor of the RREDZ:

(a) At least 21 calendar days before execution of the requisite written agreement between the sponsor and the eligible business firm (prior to authorization), the sponsor shall give the county’s governing body formal notice of the potential extension to the tax abatement period; and

(b) If on or before the date, on which the firm and sponsor would execute the written agreement, the county’s governing body adopts a resolution electing not to participate, then there is no extended abatement for the proposed investment in qualified property in that county.

(6) For purposes of the first clause under ORS 285C.350(2), qualified property must generate electricity to a significant degree from the combustion, harnessing or utilization of the renewable energy resource, but it may also produce (even for the most part) other energy forms, including but not limited to steam, heat or mechanical power.

Stat. Auth.: ORS 285A.075 & 285C.370
Stats. Implemented: OR 285C.350 - 285C.370
Hist.: OBDD 28-2010, f. & cert. ef. 6-14-10; OBDD 16-2012, f. & cert. ef. 8-15-12

Notes
1.) This online version of the OREGON BULLETIN is provided for convenience of reference and enhanced access. The official, record copy of this publication is contained in the original Administrative Orders and Rulemaking Notices filed with the Secretary of State, Archives Division. Discrepancies, if any, are satisfied in favor of the original versions. Use the OAR Revision Cumulative Index found in the Oregon Bulletin to access a numerical list of rulemaking actions after November 15, 2011.

2.) Copyright 2012 Oregon Secretary of State: Terms and Conditions of Use

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