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The Oregon Administrative Rules contain OARs filed through August 15, 2016
 
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OREGON BUSINESS DEVELOPMENT DEPARTMENT

 

DIVISION 623

STRATEGIC INVESTMENT PROGRAM

General for SIP Projects

123-623-1000

Purpose

This division of administrative rules clarifies, specifies and establishes procedures, standards and criteria for operation of the Strategic Investment Program (SIP) under ORS 285C.600 to 285C.635 and 307.123, whether inside or outside of a Strategic Investment Zone (SIZ). It does not control or bind the county assessor or Department of Revenue and does not supersede OAR chapter 150, in matters related to tax administration.

Stat. Auth.: ORS 285A.075 & 285C.615(7)
Stats. Implemented: ORS 285C.600 - 285C.626 & 307.123
Hist.: EDD 7-1999, f. & cert. ef. 9-30-99; EDD 10-2004, f. & cert. ef. 5-24-04, Renumbered from 123-023-0201; EDD 25-2008, f. 7-31-08, cert. ef. 8-1-08; Renumbered from 123-023-1000 by OBDD 18-2010, f. 4-30-10, cert. ef. 5-1-10; OBDD 2-2016, f. & cert. ef. 1-29-16

123-623-1100

Definitions

For the purposes of this division of administrative rules, additional definitions are found in OAR 123-001 (Procedural Rules). As used in these rules, the following terms have the meanings set forth below, unless the context clearly indicates otherwise.

(1) Abatement means the taxation and assessment of property comprising an eligible project under ORS 307.123.

(2) Applicant means a business firm, including but not limited to a publicly or privately held corporation, people’s utility district, or a joint operating agency under ORS 262.005, seeking approval from the Commission for Abatement.

(3) Application means the form, prescribed by the Department and described in OAR 123-623-1400, and all supplemental attachments, exhibits and so forth that the Applicant completes or furnishes to the Department for the Strategic Investment Program.

(4) Approved Project means an investment or investments in taxable property that:

(a) Is not Existing Property;

(b) The Applicant owns or leases;

(c) The Commission has determined shall receive Abatement; and

(d) Conforms to the project definition established with the determination of the Commission according to OAR 123-326-1700.

(5) County means the government of the county in which the Approved Project is located. (Except with respect to SIZs, “County” also refers to the tribe/tribal government if the Approved Project is anywhere on the reservation of a federally recognized Indian Tribe)

(6) Existing Property means any property:

(a) Comprising all or part of a prior Approved Project, unless the property was never actually subject to Abatement.

(b) That at the time of the Department’s receipt of the Application, the Applicant already:

(A) Owns or leases, regardless of location, including but not limited to recently acquired land or other property; or

(B) Has a contractual right or obligation to purchase or lease, including but not limited to doing so upon completion of improvements, construction, reconstruction or installations already underway at the Approved Project’s site.

(c) Located in an SIZ, or for which any construction or installation began there, before the effective date of the SIZ’s designation or the Department’s receipt of the Application, regardless of whether the SIZ is the basis of Abatement under ORS 285C.606(2) and 285C.626.

(7) Retained Jobs means the Total Jobs existing some time before the Approved Project became fully operational or associated with later, intra-firm transfer of operations within this state, according to OAR 123-623-4200.

(8) SIZ means a strategic investment zone designated by the Commission at the request of the County according to OAR 123-623-3000 to 123-623-3400.

(9) Total Jobs means the total number of hours, for which relevant jobs, employees or hires were paid over a year’s time, divided by 2,080, consistent with OAR 123-623-4200.

(10) Urban Project means an Approved Project located entirely outside a “rural area” as defined under ORS 285C.600, and hence, at least partially inside the urban growth boundary -- as acknowledged and in effect on the date of the Department’s receipt of the Application:

(a) Of the Portland metropolitan region, aside from the exceptions in OAR 123-632-1115; or

(b) That surround any city outside that region, for which the population equals or exceeds 40,000 based on the most recent U.S. Census count or estimate available from the Portland State University Population Research Center (which currently consists of Albany, Bend, Corvallis, Eugene, Medford, Salem–Keizer and Springfield).

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

Stat. Auth.: ORS 285A.075 & 285C.615(7)
Stats. Implemented: ORS 285C.600 - 285C.626 & 307.123
Hist.: EDD 7-1999, f. & cert. ef. 9-30-99; EDD 10-2004, f. & cert. ef. 5-24-04, Renumbered from 123-023-0351; EDD 3-2006(Temp), f. & cert. ef. 5-26-06 thru 11-22-06; Administrative correction 12-16-06; EDD 25-2008, f. 7-31-08, cert. ef. 8-1-08; Renumbered from 123-023-1100 by OBDD 18-2010, f. 4-30-10, cert. ef. 5-1-10; OBDD 2-2016, f. & cert. ef. 1-29-16

123-623-1115

Grandfathered Rural Areas

On and after October 5, 2015, the following remain rural areas under ORS 285C.600 pursuant to section 2, chapter 515, Oregon Laws 2015:

(1) Any area inside Clackamas Rural SIZ #1, designated September 24, 2010, and sponsored by Clackamas County and the cities of Canby, Estacada, Happy Valley, Molalla and Sandy; and

(2) Tax lot 2900 in the southeast quarter of section 21 of Township 1 North, Range 2 West of the Willamette Meridian (1N221-2900) in Washington County.

Stat. Auth.: ORS 285A.075 & 285C.615(7)
Stats. Implemented: ORS 285C.600; OrLaws 2015 Ch. 515 Sec. 2
Hist.: OBDD 2-2016, f. & cert. ef. 1-29-16

123-623-1250

Eligibility Criteria of the Commission

Under the definition of “eligible project” as used in ORS 285C.600:

(1) The Commission may establish criteria in order for property to receive Abatement either by resolution or as described in this division of administrative rules.

(2) The Commission may reject or revoke an Application up to 18 months after its approval and before the Abatement has begun, if the Approved Project will or does take place in conjunction with what the Commission deems to be substantial curtailment of employment at operations under the control of the Applicant (including but not limited to another commonly controlled business firm) anywhere in this state. Mitigating factors include:

(a) Applicant’s candidness and cooperation in addressing such conjunction;

(b) Such curtailment’s being unrelated and only coincidental to proposed investments; or

(c) Compensating actions by the Applicant.

Stat. Auth.: ORS 285A.075 & 285C.615(7)
Stats. Implemented: ORS 285C.600 & 285C.606
Hist.: EDD 25-2008, f. 7-31-08, cert. ef. 8-1-08; Renumbered from 123-023-1250 by OBDD 18-2010, f. 4-30-10, cert. ef. 5-1-10; OBDD 2-2016, f. & cert. ef. 1-29-16

123-623-1300

Local Hiring

For purposes of ORS 285C.603:

(1) Prospective Applicants and County/local governments shall consider creative and cooperative means to promote gainful work for persons already residing in the proximate area or region of the Approved Project for:

(a) Jobs associated with the Approved Project’s facility or operations; and

(b) Persons employed in the construction or installation of property or by other types of associated contractors, vendors or suppliers.

(2) County/local governments shall incorporate such means in a policy and standards for the designation of an SIZ, as otherwise permissible and administrable, with respect to OAR 123-623-3100.

(3) Such means shall not create any:

(a) Undue burden on the Applicant relative to the nature, needs or competitiveness of the Approved Project; or

(b) Explicit bias against anyone’s rights or access to the privilege of employment, such as specifying residency-based hiring criteria proscribed by OP-8236, Oregon Attorney General (April 20, 1995).

Stat. Auth.: ORS 285A.075 & 285C.615(7)
Stats. Implemented: ORS 285C.603, 285C.609 & 285C.623
Hist.: EDD 10-2004, f. & cert. ef. 5-24-04; EDD 25-2008, f. 7-31-08, cert. ef. 8-1-08; Renumbered from 123-023-1300 by OBDD 18-2010, f. 4-30-10, cert. ef. 5-1-10; OBDD 2-2016, f. & cert. ef. 1-29-16

123-623-1400

Making Application

(1) An Applicant desiring approval for Abatement must submit an Application to the Department.

(2) In addition to what is required by the Application or in this division of administrative rules, the Applicant shall submit any information requested by the Department for purposes of evaluating the Application.

(3) Not less than 21 days after having received a complete Application, as described in OAR 123-623-1500, the Department shall arrange for the Commission to initially consider it at a regular or special meeting. Under extenuating circumstances, the Department may dispense with this minimum period.

(4) The Application form is available from and submitted to: Business Development, Business Oregon, State Lands Building Suite 200, 775 Summer Street NE, Salem OR 97301, see www.oregon4biz.com.

(5) An Applicant may submit an Application that is incomplete for lack of local agreement/approval, which the Department effectively receives and holds pending completion, in order that subsequently acquired, constructed or installed property avoids classification as Existing Property or for other reasons, so long as the Application includes:

(a) The fee described in OAR 123-623-1800(1);

(b) All required information or documentation currently available to the Applicant; and

(c) What the Department deems to be sufficient evidence that the Applicant has been in contact with the County to initiate steps under ORS 285C.609, including but not limited to local submission of a formal application if the County has previously established such procedures.

(6) Section (5) of this rule is not generally applicable to proposed investments in an SIZ, but the Department may exercise it in the case where an Applicant has encountered what the Department considers significant and undue delays in executing the standardized agreement for the SIZ under the local program established pursuant to OAR 123-623-3100.

Stat. Auth.: ORS 285A.075 & 285C.615(7)
Stats. Implemented: ORS 285C.600 - 285C.626
Hist.: EDD 7-1999, f. & cert. ef. 9-30-99; EDD 10-2004, f. & cert. ef. 5-24-04, Renumbered from 123-023-0401; EDD 25-2008, f. 7-31-08, cert. ef. 8-1-08; Renumbered from 123-023-1400 by OBDD 18-2010, f. 4-30-10, cert. ef. 5-1-10;; OBDD 2-2016, f. & cert. ef. 1-29-16

123-623-1500

Contents of Application, Generally

123-623-1550:

(1) A copy of a First Source Hiring Agreement according to OAR 123-070 that takes effect beginning no later than when any hiring for the Approved Project commences and ending no sooner than June 30 of the final tax year of Abatement.

(2) Information required in or with the Application as stated in the form, including but not limited to full company identification, hiring/payroll projections, full description of proposed investment(s) and of any exceptional impact on public services, as well as:

(a) The number of Retained Jobs over the 12 month’s preceding the Department’s receipt of the Application at the site, facility or operations, to which the proposed investment will be made;

(b) Full disclosure for purposes of OAR 123-623-1250, including but not limited to any probable reduction in the operations, employment or the like at any other facility in this state that is owned or operated by the Applicant or a commonly controlled business firm, within one year after making application, regardless of proximity or relationship to the proposed investment(s); and

(c) Commitments to:

(A) Address the exhortation under ORS 285C.603 consistent with OAR 123-623-1300;

(B) Provide timely notification or evidence to the county assessor or the Department of Revenue, as requested or otherwise necessary under ORS 307.123 or other applicable laws, such as the date when any taxable property is or will be initially occupied, used or operated commercially for specifically intended purposes;

(C) Ensure that any ultimate lessee is responsible for the payment of property taxes levied on leased property that comprises any part of the Approved Project; and

(D) Submit the annual reports of employment required under ORS 285C.615 and described in OAR 123-623-4000 to 123-623-4200.

(3) As described in OAR 123-623-1800:

(a) Full amount of the nonrefundable application fee; and

(b) Commitment to pay additional fee, if approved.

Stat. Auth.: ORS 285A.075 & 285C.615(7)

Stats. Implemented: ORS 285C.600, 285C.606, 285C.609, 285C.626, 307.123

Hist.: EDD 10-2004, f. & cert. ef. 5-24-04; EDD 25-2008, f. 7-31-08, cert. ef. 8-1-08; Renumbered from 123-023-1500 by OBDD 18-2010, f. 4-30-10, cert. ef. 5-1-10; OBDD 2-2016, f. & cert. ef. 1-29-16

123-623-1525

Application within a Strategic Investment Zone

If the proposed investment is subject to approval based on its location inside an SIZ:

(1) A complete Application must also include a locally endorsed and fully executed copy of the SIZ’s standardized agreement that unambiguously identifies the Applicant and the proposed investment.

(2) The County may neither negotiate a project-specific agreement nor subject the proposal to approval under discretionary provisions, including but not limited to those under ORS 285C.609.

(3) Material variance between additional requirements established with designation of the SIZ and those found in the agreement submitted by the Applicant shall render such requirements unenforceable.

Stat. Auth.: ORS 285A.075 & 285C.615(7)
Stats. Implemented: ORS 285C.600, 285C.606 & 285C.626
Hist.: EDD 25-2008, f. 7-31-08, cert. ef. 8-1-08; Renumbered from 123-023-1525 by OBDD 18-2010, f. 4-30-10, cert. ef. 5-1-10; OBDD 2-2016, f. & cert. ef. 1-29-16

123-623-1550

Application outside a Strategic Investment Zone

A complete Application must also include all of the following, if the proposed investment is not using an SIZ:

(1) Evidence that the County held a public hearing concerning the Applicant’s proposal, before executing the agreement in section (2) of this rule.

(2) A copy of the agreement:

(a) Between the Applicant and the County in partnership with any city in which the investment site is located;

(b) Executed before the official action in section (3) of this rule;

(c) Addressing the community service fee consistent with OAR 123-623-1900; and

(d) Specifying requirements, if any, under ORS 285C.609(5).

(3) With respect to the local official action requesting a Commission determination for Abatement on the Applicant’s proposed investment(s):

(a) A copy of the official action by the governing body of the County; and

(b) Evidence that an affirmative vote by a majority of the County governing body (not merely the members present) at a regular or duly called special meeting effected the action.

(4) The latest version of any document submitted to County/local governments in relation to sections (1) to (3) of this rule.

Stat. Auth.: ORS 285A.075 & 285C.615(7)
Stats. Implemented: ORS 285C.600, 285C.606 & 285C.609
Hist.: EDD 25-2008, f. 7-31-08, cert. ef. 8-1-08; Renumbered from 123-023-1550 by OBDD 18-2010, f. 4-30-10, cert. ef. 5-1-10

123-623-1600

Consideration and Approval

(1) The Department shall review each Application, and only after deeming that information described in OAR 123-623-1500 and 123-623-1525 or 123-623-1550 is completely and accurately provided in it (except potentially for pending materials or information, of which the Department is reasonably assured of receipt), the Department shall make a recommendation to the Commission (subject to actual receipt of any pending material or information).

(2) In evaluating an Application, the Commission shall hold at least one meeting open to the public, at which the matter is an agenda item for discussion, and for which the Department has made appropriate and customary public notice. At the meeting the Commission may:

(a) Invite oral statements or written comments from the public; and

(b) Have the Applicant appear in order to give a statement and to answer questions submitted in advance or posed by Department staff or by members of the Commission, exclusively.

(3) The Commission may dispense with some or all of the elements in section (2) of this rule, as otherwise permitted under ORS Chapter 192, in light of extenuating circumstances.

(4) Pursuant to evaluation of the Application, the Applicant’s proposed investment(s) are determined to be an eligible project for Abatement if the Commission finds that:

(a) The project will satisfy the criteria for eligibility as established by prior resolution of the Commission or in this division of administrative rules;

(b) The project will directly benefit a traded sector industry under ORS 285B.280;

(c) The total cost of the project will equal or exceed $25 million, or $100 million in the case of any proposed Urban Project;

(d) The project will not consist of any property formerly or currently exempt under ORS 285C.175 and the Applicant is not an authorized business firm for any investment at the exact same location in an enterprise zone, unless there will be a demarcation between such qualified property and property subject to the Abatement that is clear enough for purposes of proper valuation and tax administration;(e) The Applicant is not subject to an outstanding suspension under ORS 285C.615(3) as described in OAR 123-623-4000(4) and (5); and

(f) The Applicant has agreed to comply with any additional reasonable conditions imposed by the Commission related to the Strategic Investment Program, including requirements that continue for the term of the Abatement.

(5) Notwithstanding suspension of the determination as provided under ORS 307.123(6), once the Commission has taken formal action to authorize the Abatement, the Commission’s determination is final, and the Commission may reverse, rescind or withdraw it only by formal finding of a material error or omission among submitted Application information or a noncompliance with criteria described or referenced in this rule.

Stat. Auth.: ORS 285A.075 & 285C.615(7)
Stats. Implemented: ORS 285C.600 - 285C.626, 307.123
Hist.: EDD 7-1999, f. & cert. ef. 9-30-99; EDD 12-2002(Temp), f. & cert. ef. 6-5-02 thru 11-29-02; Administrative correction 4-15-03; EDD 10-2004, f. & cert. ef. 5-24-04, Renumbered from 123-023-0451; EDD 25-2008, f. 7-31-08, cert. ef. 8-1-08; Renumbered from 123-023-1600 by OBDD 18-2010, f. 4-30-10, cert. ef. 5-1-10; OBDD 2-2016, f. & cert. ef. 1-29-16

123-623-1700

Establishment of Exempt Property

(1) The Commission’s determination pursuant to OAR 123-623-1600 needs to define the Approved Project for purposes of the Abatement, consistent with the Application (and the County agreement with the Applicant if outside an SIZ).

(2) Such a definition shall employ one or more of the following examples or a comparable method that:

(a) Stipulates the site(s) or overall facility at which applicable property must be located, used and occupied for commercial purposes;

(b) Delimits what the Abatement covers in terms of investment cost or property value, or the specific period, in which construction/installation needs to commence, or in which property must be placed in service; or

(c) Identifies applicable real and personal property, including but not limited to:

(A) Referencing the description of investment(s) in the Application or further information from the Applicant (whether requested or not by the Department or Commission); or

(B) Delineating details for improvements, buildings or property items (or representative examples thereof) that the Applicant will acquire, construct or install, or for which the assessed value might increase as a result of additions, reconstruction, modifications, remodeling, renovation, refurbishment, retrofitting or upgrades.

(3) Property of an Approved Project qualifies for Abatement even if built on, installed in or associated with Existing Property:

(a) Outside a SIZ, a (positive) change in the assessed value of already owned or leased property is also subject to Abatement if resulting from modifications, remodeling, renovation, refurbishment, retrofitting or upgrades as part of the Approved Project.

(b) The Abatement excludes any such change in value of any property inside any SIZ, except for newly constructed additions to any existing structure, as well as all land or any other property in existence or in the process of construction or installation before the Department’s effective receipt of the Application. This subsection applies regardless if the project is approved based on its location in the SIZ or otherwise under ORS 285C.606(1) as described in OAR 123-623-1550.

(4) As otherwise allowed under the project definition described in this rule, the Abatement shall cover any property comprising the Approved Project, for which construction, installation, modification or the like occurs during or after the first year of Abatement, but only for the remainder of the 15-year period.

(5) If another business firm acquires the Applicant or the Approved Project, the ongoing Abatement shall continue as authorized, such that continuously exempt property is not Existing Property, provided that:

(a) The acquiring firm complies with all terms and conditions under the Application, its approval, and the corresponding local agreement in OAR 123-623-1525 or 123-623-1550, as well as applicable requirements of law and this division of administrative rules, as if the acquiring firm were the Applicant; and

(b) The owner or chief executive officer of the acquiring firm furnishes and authorizes a formal statement to the Department and the parties to the agreement, attesting to the firm’s full assumption of relevant obligations and requirements formerly incumbent on the Applicant.

Stat. Auth.: ORS 285A.075 & 285C.615(7)
Stats. Implemented: ORS 285C.600, 285C.606 & 285C.626, 307.123
Hist.: EDD 10-2004, f. & cert. ef. 5-24-04; EDD 25-2008, f. 7-31-08, cert. ef. 8-1-08; Renumbered from 123-023-1700 by OBDD 18-2010, f. 4-30-10, cert. ef. 5-1-10; OBDD 2-2016, f. & cert. ef. 1-29-16

123-623-1800

State Application and Approval Fees

With respect to ORS 285C.612 and the fees payable to and collected by the Department:

(1) The following (non-refundable) amount must accompany the Application:

(a) $5,000; or

(b) $10,000 for a proposed Urban Project.

(2) After the Commission decides to approve the Application, but pending formal authorization as such through the Department, the Applicant must pay the following amount (of which the Department shall transfer 50 percent to the Department of Revenue to administer ORS 307.123):

(a) $10,000; or

(b) $50,000 for a proposed Urban Project.

(3) The Commission or Department will allocate payments collected and retained consistent with relevant provisions in OAR 123-009.

Stat. Auth.: ORS 285A.075 & 285C.615(7)
Stats. Implemented: ORS 285C.612
Hist.: EDD 7-1999, f. & cert. ef. 9-30-99; EDD 10-2004, f. & cert. ef. 5-24-04, Renumbered from 123-023-0501; EDD 25-2008, f. 7-31-08, cert. ef. 8-1-08; Renumbered from 123-023-1800 by OBDD 18-2010, f. 4-30-10, cert. ef. 5-1-10; OBDD 2-2016, f. & cert. ef. 1-29-16

123-623-1900

Community Service Fee

(1) The local agreement included with the Application and described in OAR 123-623-1525 or 123-623-1550 shall specify:

(a) The community service fee under ORS 285C.609(4)(b) and (c) or 285C.623(4)(b) and (c); and

(b) How the Applicant will annually make payment of the fee to the County, beginning not earlier than December 1 of each of the 15 tax years for which the Applicant claims and receives the Abatement, including arrangements for invoicing or issuance of a receipt to the Applicant.

(2) Depositing of community service fee moneys (under ORS Chapter 294) and their allocation, distribution or transfer by the County or any other entity in OAR 123-623-1950(1) do not affect the Approved Project’s eligibility.

Stat. Auth.: ORS 285A.075 & 285C.615(7)
Stats. Implemented: ORS 285C.609 & 285C.623
Hist.: EDD 10-2004, f. & cert. ef. 5-24-04; EDD 25-2008, f. 7-31-08, cert. ef. 8-1-08; Renumbered from 123-023-1900 by OBDD 18-2010, f. 4-30-10, cert. ef. 5-1-10; OBDD 2-2016, f. & cert. ef. 1-29-16

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 anticipated 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, whether 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, to:

(A) Confirm that the Commission need not establish such formula; and

(B) Inform about the redistribution of amounts received under ORS 285C.635(3).

(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, upon learning 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; and

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

(6) In determining a distribution formula the Commission, as necessary:

(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, with respect to any SIZ, the County and affected local parties may agree to a generalized distribution formula and standard agreement for all 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; OBDD 2-2016, f. & cert. ef. 1-29-16

123-623-2000

Confidential Records

As provided under ORS 192.501, 192.502 and 285C.620:

(1) The Department shall not release any information identifying or pertaining to an expected Applicant, or to discussions among it, local governments, or the Department and members of the Commission, before:

(a) Finalization of local approval for the proposed investment based on its being inside an SIZ; or

(b) The County governing body holds the public hearing under ORS 285C.609(4) (or a public notice for the hearing naming an expected Applicant) if not using an SIZ.

(2) The Department shall not release any Application materials submitted by an expected Applicant that specifically describe investment plans, before the Department’s deems the received Application to be complete.

(3) The department shall seek to keep confidential certain sensitive records or communications obtained in association with an Application, as otherwise allowable under ORS 192.410 to 192.505, including but not limited to the following:

(a) Reports and analyses of reports bearing on the Applicant’s character, finances, management ability and reliability, as obtained in confidence from persons or firms not required by law to submit them, including but not limited to the Applicant, and for which the Department obliged itself in good faith to not disclose;

(b) Financial statements, tax returns, business records, employment history, personnel files and comparable data submitted by or for an Applicant, or analysis of such data;

(c) Intra-departmental advisory memoranda based on or providing preliminary information;

(d) Formulas, plans, designs and related information that constitute trade secrets under ORS Chapter 192;

(e) Personal financial statements;

(f) Information of an Applicant pertaining to litigation that has not concluded, to which the Applicant is a party if the complaint has been filed, or if not, that the Applicant shows is reasonably likely to occur (Nothing in this section shall limit any right or opportunity granted by discovery or deposition statutes to a litigant or defendant);

(g) Production, sales or cost data, customer lists, or detailed descriptions or identifications of business property; or

(h) Marketing strategy information that relates to an Applicant’s plan to address specific markets and the Applicant’s strategy regarding specific competitors.

(4) Subject to sections (1), (2) and (3) of this rule, the Department shall provide records pertaining to the Strategic Investment Program upon written request, as described in OAR 123-005.

Stat. Auth.: ORS 285A.075 & 285C.615(7)
Stats. Implemented: ORS 285C.620
Hist.: EDD 7-1999, f. & cert. ef. 9-30-99; EDD 10-2004, f. & cert. ef. 5-24-04, Renumbered from 123-023-0551; EDD 25-2008, f. 7-31-08, cert. ef. 8-1-08; Renumbered from 123-023-2000 by OBDD 18-2010, f. 4-30-10, cert. ef. 5-1-10; OBDD 2-2016, f. & cert. ef. 1-29-16

Strategic Investment Zones (SIZs)

123-623-3000

Physical, Temporal and Jurisdictional Existence

(1) There is no limit to the number of SIZs under ORS 285C.623, for which any County may seek designation on one or multiple occasions.

(2) The Commission may designate an SIZ that is entirely or partially inside one or more cities that also seek designation as parties with the County to a joint request. The County and any such city do thereby jointly cosponsor the SIZ and are its “sponsor” or “cosponsors.”

(3) An SIZ may cover the entire (unincorporated) territory of the County, or it may be as small as a single parcel of land, on which development of an eligible project can feasibly take place, but any SIZ must:

(a) Be entirely contiguous;

(b) Consist of area only in the territory of a single County;

(c) Encompass land exclusive of land inside any other existing SIZ; and

(d) Contain only rural area if including any rural area under ORS 285C.600(5) and section 2, chapter 515, Oregon Laws 2015, consistent with OAR 123-623-1100(10) and 123-623-1115.

(4) Once designated, an SIZ does not expire and may be neither terminated nor geographically amended.

(5) In determining the area to include in a proposed SIZ, local governments shall consider plans and potentialities for city annexations and projections for city population growth, in order to minimize the probability of the following occurrences, which would nevertheless not interrupt the existence or operation of the SIZ:

(a) A city that does not sponsor the SIZ annexes territory inside of it; or

(b) A city, whose urban growth boundary (UGB) crosses the area of the SIZ, increases in population to 40,000 or more, in the case of an otherwise rural SIZ. (An Approved Project, for example, inside such an UGB is an Urban Project, if official release of the relevant increase in the city’s population estimate or enumeration occurred before the Department receives the Application)

Stat. Auth.: ORS 285A.075 & 285C.615(7)
Stats. Implemented: ORS 285C.623 & 285C.626
Hist.: EDD 25-2008, f. 7-31-08, cert. ef. 8-1-08; Renumbered from 123-023-3000 by OBDD 18-2010, f. 4-30-10, cert. ef. 5-1-10; OBDD 2-2016, f. & cert. ef. 1-29-16

123-623-3100

Local Request for Designation

In seeking designation of any SIZ:

(1) The sponsor of the proposed SIZ shall prepare information defining the SIZ’s boundary including a map clearly showing its entire area in relation to other demarcations, as well as tax lot numbers, metes & bounds, or other data or descriptions, as necessary in order for one to ascertain the area of designation.

(2) The County shall conduct a public hearing on the matter.

(3) Following the hearing, the County and any city, for which any part of the SIZ will be inside its corporate limits, shall execute an intergovernmental agreement to jointly sponsor and operate the proposed SIZ.

(4) The County, or the County and the city/cities as part of the intergovernmental agreement, shall articulate objectives for the proposed SIZ and shall develop a program for business firms to use for Abatement on eligible projects. This local program may differ from the program adopted for any other SIZ sponsored by the County or city, but the sponsor of the SIZ shall officially document the program, including with but not limited to the following:

(a) Any and all criteria for receiving local approval and the requirements for qualification under ORS 285C.623(5), such that the sponsor has clearly delineated administrative procedures, methods of verification and consequences of a firm’s failure respective to those criteria or requirements;

(b) Policy and standards to improve the likelihood of local hiring per OAR 123-623-1300, which may consist of a firm’s formally accepting to undertake “good faith” efforts;

(c) Ministerial steps and processes setting forth a straightforward path for a firm to request and to receive local approval for the SIZ, in order to subsequently submit a complete Application to the Department; and

(d) Standardized agreement language, which may be a detailed form, that:

(A) Will give the location of the proposed project in the SIZ and general information about the newly constructed or newly installed property that will comprise it;

(B) Stipulates the community service fee in accordance with OAR 123-623-1900;

(C) Spells out all local criteria, requirements and standards intended to obligate a firm’s benefiting from the Abatement in some way;

(D) Will identify the particular firm in detail and provide for it to expressively acknowledge and commit to such criteria, requirements and so forth by signature of an authorized representative of the firm; and

(E) Is endorsed by a sponsor representative (either with the County or a city) in approving a proposed project and the firm’s use of the SIZ.

(5) Pursuant to and in reference to materials arising from sections (1) to (4) of this rule, the County governing body shall take official action to request designation of the SIZ and shall forward that request to the Department.

Stat. Auth.: ORS 285A.075 & 285C.615(7)
Stats. Implemented: ORS 285C.623
Hist.: EDD 25-2008, f. 7-31-08, cert. ef. 8-1-08; Renumbered from 123-023-3100 by OBDD 18-2010, f. 4-30-10, cert. ef. 5-1-10

123-623-3200

Department’s Receipt of County Request

The Department shall report to the Commission on any complete request that it receives from a County for designation of a proposed SIZ that satisfies OAR 123-623-3000 and 123-623-3100, after concluding that the request contains the following:

(1) Identification of any requisite city that also sponsors the SIZ;

(2) The map and other geographic data establishing the SIZ area and boundary;

(3) Evidence that the SIZ area will conform to OAR 123-623-3000(3);

(4) Information pertaining to the SIZ’s inclusion, adjacency and proximity to any current city limit or urban growth boundary and to any urban growth boundary of a city with a population that equals or exceeds 40,000 (or likely will within 10 years);

(5) The agenda, minutes and so forth demonstrating that the County held a public hearing concerning the SIZ;

(6) A copy of the intergovernmental agreement between the County and any and all city cosponsors, as executed on or after the date of the public hearing;

(7) A summary of the locally established objectives for the SIZ;

(8) Documentation of the local program described in OAR 123-623-3100(3), including but not limited copies of policies, rules, procedural guidelines or administrative plans, but especially, a sample standardized agreement; and

(9) A record that the County governing body took the official action requesting designation of the SIZ with an affirmative vote by a majority of its members (not merely those present) at a regular or duly called special meeting that occurs after the execution or conclusion of material efforts described in sections (1) to (8) of this rule.

Stat. Auth.: ORS 285A.075 & 285C.615(7)
Stats. Implemented: ORS 285C.623
Hist.: EDD 25-2008, f. 7-31-08, cert. ef. 8-1-08; Renumbered from 123-023-3200 by OBDD 18-2010, f. 4-30-10, cert. ef. 5-1-10; OBDD 2-2016, f. & cert. ef. 1-29-16

123-623-3300

Designation by the Commission

In response to a request for designation of an SIZ:

(1) The Commission shall initially consider it by receiving a report from the Department as an agenda item at a regular or special meeting, for which the Department has made appropriate and customary public notice. The Commission shall determine the process by which it will complete its review of the proposed SIZ.

(2) The Commission shall designate the SIZ if finding that:

(a) With a reasonable degree of confidence, the SIZ will contribute to fulfilling the intent of ORS 285C.603 and will generally accomplish the objectives established by the sponsor;

(b) The sponsor has defined its processes to allow for efficient implementation and operation of the SIZ, such that a business firm could expect to have its local request for approval handled expeditiously; and

(c) The SIZ’s criteria, requirements, policies, standards and so forth, and the sponsor’s plans to administer them are sufficiently clear and straightforward to provide reasonable certainty with respect to any conceivably eligible project, such that a business firm can correctly discern:

(A) The probability of qualifying in that SIZ;

(B) What it must do to comply;

(C) Whether the firm/project actually does qualify at any given point; and

(D) The consequence of noncompliance or disqualification.

(3) When taking action to approve the request, the Commission’s shall set the effective date of designation. On or after this date, property may be newly constructed or installed for purposes of Abatement in that SIZ.

Stat. Auth.: ORS 285A.075 & 285C.615(7)
Stats. Implemented: ORS 285C.623
Hist.: EDD 25-2008, f. 7-31-08, cert. ef. 8-1-08; Renumbered from 123-023-3300 by OBDD 18-2010, f. 4-30-10, cert. ef. 5-1-10

123-623-3400

Operational Changes to Existing Designations

(1) The sponsor of an existing SIZ may revise any of its documentation, procedures or policies, including but not limited to establishing a different standardized agreement, by repeating OAR 123-623-3100(2) to (5) and submitting a request for approval of the revisions to the Department.

(2) The Department may:

(a) Convey the submission for consideration of approval by the Commission in accordance with OAR 123-623-3300; or

(b) Directly approve the request, sending the Commission a report of any such action, if deeming the revisions to be fully consistent with the original designation, and to be:

(A) Merely clarifying or enhancing administrative or technical matters;

(B) Changing a substantive criterion or requirement to only a relative degree; or

(C) Of a similar nature that does not warrant Commission review.

(3) Any such revision does not affect Abatement in the SIZ, for which the Department effectively received the Application on or before the effective date of approved changes, which the Department or Commission may not set earlier than when the Department received the official request from the sponsor.

Stat. Auth.: ORS 285A.075 & 285C.615(7)
Stats. Implemented: ORS 285C.623 & 285C.626
Hist.: EDD 25-2008, f. 7-31-08, cert. ef. 8-1-08; Renumbered from 123-023-3400 by OBDD 18-2010, f. 4-30-10, cert. ef. 5-1-10

Annual Reporting by All Benefiting Projects

123-623-4000

Submissions to Department

For purposes of ORS 285C.615(1) to (3) & (6) and the report submitted by a business firm benefiting from Abatement in the property tax year concluding as of the prior June 30:

(1) The firm shall complete the prescribed report form available from and furnish it to: Business Development, Business Oregon, State Lands Building Suite 200, 775 Summer Street NE, Salem OR 97301, see www.oregon4biz.com.

(2) The firm may send the report form on or after January 1 next following the tax year, but the Department must receive it no later than the immediately subsequent April-1 date or the preceding Friday when April 1 is a Saturday or Sunday.

(3) This reporting requirement applies to any Approved Project, of which any property is actually exempt from taxes under ORS 307.123(1)(b) in the tax year, beginning with the 2009–2010 tax year.

(4) Section (3) of this rule is true regardless that the Approved Project does not pertain to a distribution under ORS 285C.635(3), whether because:

(a) The first tax year of that Abatement was before 2008–2009; or

(b) The most recently concluded tax year is 2023–2024 or later, in that reports will still be required in and after 2025.

(5) If the benefiting business firm has two or more Approved Projects receiving Abatements in a given tax year at more or less the same location(s), for which Total Jobs are the same or overlapping:

(a) The firm shall submit report forms for each project, including but not limited to the respective data for Retained Jobs as applicable according to OAR 123-623-4200(3) to (6).

(b) In transmitting data to the Oregon Department of Administrative Service (DAS), the Department shall adjust the job numbers assigned among the projects to prevent double-counting, which may depend on further information from the firm.

(c) Generally, assuming employment increases with successive projects, these adjustments will:

(A) Assign only Retained Jobs to the less/least recent project as reported for it;

(B) For any less recent project, assign the Retained Jobs of the next more recent project to be its total jobs; and

(C) For the more/most recent project, assign as its total jobs the reported Total Jobs minus the sum of Retained Jobs, as reported for all projects.

(6) The Department shall recommend to the Commission that it suspend its determination for the Approved Project, and any other project materially implicated for purposes of subsection (5) of this rule — effectively revoking any such Abatement for and after the tax year beginning with the very next July 1, until the suspension is ever rescinded under ORS 285C.615(3)(c) — if the benefiting firm has failed to:

(a) Provide information called for by the report form or in OAR 123-623-4100 or 123-623-4200; or

(b) Promptly satisfy a necessary or appropriate request by the Department to further clarify or verify such information. (Therefore, in light of the Department’s limited turnaround time to transmit data to DAS, firms are encouraged to submit as early as possible to improve the likelihood that such a request can be timely resolved)

(7) “Tax year” has the same meaning as under ORS 308.007.

Stat. Auth.: ORS 285A.075 & 285C.615(7)
Stats. Implemented: ORS 285C.615; OL 2007 Ch. 905 §6
Hist.: EDD 25-2008, f. 7-31-08, cert. ef. 8-1-08; Renumbered from 123-023-4000 by OBDD 18-2010, f. 4-30-10, cert. ef. 5-1-10; OBDD 2-2016, f. & cert. ef. 1-29-16

123-623-4100

Reporting Elements

Respective or in addition to items stipulated under ORS 285C.615(2), the report submitted to the Department by a benefiting business firm described in OAR 123-623-4000 must:

(1) State for the applicable tax year, as may be confirmed or corrected through communication with the county assessor:

(a) The real market or assessed value of the entire Approved Project in terms of what was exempt or taxable, as well as corresponding property taxes saved or paid by the firm; and

(b) Which year it was out of the 15 that comprise the Abatement period.

(2) Include the total cumulative cost of investments physically made in the Approved Project through the most recent calendar year (which in effect, are two years removed from any investment affecting values in subsection (1)(a) of this rule).

(3) Breakdown the amounts and recipients of fees or other (non-tax) payments made by or on behalf of the firm that arise from requirements under ORS 285C.609(5) or 285C.623(5), in addition to the amount of the statutory community service fee, in the calendar year preceding the report.

(4) Provide data for Retained Jobs as relevant, Total Jobs, and taxable income and compensation of Total Jobs, in accordance with OAR 123-623-4200 that are broken out for:

(a) The firm itself; and

(b) A single general operator of the Approved Project, if relevant, but the report need not include information formally identifying any such general operator.

Stat. Auth.: ORS 285A.075 & 285C.615(7)
Stats. Implemented: ORS 285C.615
Hist.: EDD 25-2008, f. 7-31-08, cert. ef. 8-1-08; Renumbered from 123-023-4100 by OBDD 18-2010, f. 4-30-10, cert. ef. 5-1-10; OBDD 2-2016, f. & cert. ef. 1-29-16

123-623-4200

Applicable Employees and Payroll

For purposes of OAR 123-623-4100(4):

(1) With respect to Total Jobs, the report shall include each of the following totals for the preceding calendar year:

(a) Hours paid;

(b) Taxable income; and

(c) Compensation.

(2) Relevant jobs, hires or employees are persons, regardless of residency in this state:

(a) For whom their employer under ORS chapter 316 is:

(A) The benefiting business firm (or a commonly controlled business firm); or

(B) A general operator, if any, who manages the entire Approved Project for the firm; but

(C) Not any other type of contractor, subcontractor, vendor or supplier of the firm or of such a general operator; and

(b) Who:

(A) Regularly work at a site or location containing property of the Approved Project; and

(B) Are engaged in or directly support business operations of the Approved Project, such that other operations represent not more than 25 percent of the person’s time spent performing work for the employer.

(3) Retained Jobs consist of relevant existing jobs, hires or employees described in section (2) of this rule, who:

(a) Were already at the existing site, facility or operations, to which the Applicant makes the investments that comprise the Approved Project, consistent with sections (4) or (5) of this rule; or

(b) Are associated with the transfer of operations from elsewhere in this state to the Approved Project, after the Application was received by the Department and before the final year of Abatement, in terms of any increase in Total Jobs that relates to the permanent curtailment of full-time equivalent employment at the former location of the transferred operations.

(4) Pursuant to an Application received by the Department on or after January 1, 2016, the first report shall establish total hours with respect to Retained Jobs already at the Approved Project over:

(a) The 12 months before the Application’s receipt, accounting for any modification from the Application in terms of OAR 123-623-1500(2)(a); or

(b) The calendar year ending 30 months before the first tax year of the Abatement, if that is more recent than the period in subsection (a) of this section.

(5) In the case of Approved Projects, for which Applications were received before January 1, 2016, the Department shall seek to establish with the first such report in or after 2016, the applicable number of Retained Jobs based on information that is or has been submitted by the firm in that or prior reports or upon request of the Department.

(6) Subject to section (4) or (5) of this rule, the number of Retained Jobs becomes fixed and need not be re-reported, but the benefiting business firm shall revise or update it with subsequent reports to:

(a) Correct errors and omissions, if any; or

(b) Account for operations of the firm (or a commonly controlled business firm) that are transferred during the preceding calendar year, in accordance with subsection (3)(b) of this rule, even if the operations became part of the firm through merger or acquisition after the Department received the Application.

(7) The amount of hours assigned to salaried positions is 2,080, or a lower amount as prorated to account for less than full-time or year-round employment.

(8) Taxable income equates to the wages that the employer used in calculating amounts withheld under ORS chapter 316 for Oregon personal income taxes during the calendar year.

(9) Compensation includes total calendar-year remuneration (whether taxable or not) in the form of wages, salary, overtime pay, shift differential, profit-sharing, bonuses, commissions, paid vacation, and associated fringe or financial benefits such as life insurance, medical coverage and retirement plans, but excluding:

(a) Free meals, club membership or comparable workplace amenities;

(b) Payroll-based tax or cost mandated by federal, state or local law, such as worker’s compensation, unemployment insurance or the employer’s share under FICA; and

(c) Gratuities or tips.

Stat. Auth.: ORS 285A.075 & 285C.615(7)
Stats. Implemented: ORS 285C.615
Hist.: OBDD 2-2016, f. & cert. ef. 1-29-16

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