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The Oregon Administrative Rules contain OARs filed through January 15, 2010

OREGON BUSINESS DEVELOPMENT DEPARTMENT

DIVISION 65

ENTERPRISE ZONE

General

[ED. NOTE: Department of Revenue forms referenced in this division are available from the Department of Revenue, Property Tax Division, 955 Center St NE, PO Box 14380, Salem OR 97309-5075, phone 503-378-4988, 800-356-4222, TTY 800-886-7204, fax 503-945-8737, web www.oregon.gov/DOR/PTD/ptd_ forms.shtml]

123-065-0000

Definitions

As used in this division of administrative rules, unless otherwise indicated:

(1) Census Statistical Unit includes any standard geographic area, legal entity or administrative designation for which data is available through the most recent federal decennial census, such as the following: County, census county subdivision, incorporated place, census urbanized area, census designated (unincorporated) place, ZIP code, census tract, census block numbering area (BNA), census block group (BG) or census block.

(2) Department means the State of Oregon Economic and Community Development Department, as (re)organized and created under ORS 285A.070, unless specified otherwise.

(3) Director means the Director of the Department appointed under ORS 285A.070.

(4) 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 and statutorily a new zone designation.

(5) Terminated by Statute means the automatic termination of an enterprise zone by operation of law after more than 10 years under ORS 285C.245(2) or after more than 6 years under 285C.245(6).

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C
Hist.: EDD 4-1994, f. & cert. ef. 2-24-94; EDD 10-1995, f. & cert. ef. 12-19-95; EDD 1-1997, f. & cert. ef. 1-7-97; EDD 5-1998, f. 3-12-98, cert. ef. 3-15-98; EDD 9-2000, f. & cert. ef. 5-2-00; EDD 1-2005, f. & cert. ef. 2-25-05; EDD 1-2007(Temp), f. & cert. ef. 1-8-07 thru 7-6-07; EDD 2-2007, f. 6-15-07, cert. ef. 7-1-07

123-065-0005

Organization of this Division

(1) The first two digits of the final four digits of each rule number, as well as subtitles, indicate a "subdivision" of this division of administrative rules.

(2) These subdivisions are also grouped as follows, by reference to the first digit of the last four digits of the rule number:

(a) Zero/one: fundamental matters of Oregon enterprise zones, such as their creation, modification, termination and local sponsorship;

(b) Two: special issues, including but not limited to additional requirements imposed on a benefiting business by the local zone sponsor;

(d) Four: regular three to five-year exemption on qualified property of an eligible business firms;

(e) Seven: special features for electronic commerce investments; and

(f) Eight: energy or environmental matters, including Rural Renewable Energy Development Zones (RREDZs).

Stat. Auth.: ORS 285A.075, 285C.050(5), 285C.060(1) & 285C.370
Stats. Implemented: ORS 285C
Hist.: EDD 1-2005, f. & cert. ef. 2-25-05

123-065-0010

Local Government Enterprise Zone Sponsorship or Consent

An enterprise zone shall be sponsored by, and only by, the governing body of each city or county jurisdiction or port district in which it is located, with the following exceptions:

(1) A port need not cosponsor a zone, if:

(a) The zone is located inside the territory of a sponsoring city, county or two or more such jurisdictions; and

(b) The port granted consent for the zone to exist in its territory through a resolution adopted by the port's governing body.

(2) A county need not cosponsor a zone, if:

(a) The zone is located completely in the incorporated territory of a city/cities that/each of which sponsors the zone;

(b) The county has consented to the zone in its territory for sponsorship by a port through a resolution adopted by the governing body of the county; or

(c) The county granted consent for the zone in its unincorporated territory through a resolution adopted by the governing body of the county and the only such unincorporated territory inside the zone lies within the urban growth area between the corporate limits and the urban growth boundary of a city that sponsors the zone.

(3) A city need not cosponsor a zone, if:

(a) The zone is located inside the territory of a sponsoring county or of a sponsoring port with county consent;

(b) The city granted consent for the zone to exist in its territory through a resolution adopted by the city's governing body; and

(4) As otherwise consistent with sections (1) to (3) of this rule, city/county/port sponsorship or consent is permissible:

(a) In combinations not specifically described by this rule; or

(b) For an enterprise zone designation under ORS 285C.080 or 285C.250 containing tribal lands in addition to non-tribal lands inside sponsor territory.

(5) Except as provided under ORS 285C.115(3), a city, port or county does not need to sponsor a reservation enterprise zone designated under ORS 285C.306. The same is also true for an amendment to such a zone that adds land:

(a) Held in trust by the U.S. for the benefit of the Indian Tribe, for which the tribal government is the zone sponsor; and

(b) Over which the non-sponsoring city, port or county government does not effectively have jurisdictional control.

(6) As provided under ORS 285C.306, the government of an eligible Indian tribe may cosponsor a reservation partnership zone with a city, county or port pursuant to an agreement formed under ORS 190.110 to perform the duties of a zone sponsor under ORS 285C.050 to 285C.250.

Stat. Auth.: ORS 285A.075, 285C.060(1) & 285C.066
Stats. Implemented: ORS 285C.050, 285C.065, 285C.115, 285C.250, 285C.306 & 285C.320
Hist.: EDD 4-1994, f. & cert. ef. 2-24-94; EDD 10-1995, f. & cert. ef. 12-19-95; EDD 1-1997, f. & cert. ef. 1-7-97; EDD 5-1998, f. 3-12-98, cert. ef. 3-15-98; EDD 1-2005, f. & cert. ef. 2-25-05; EDD 1-2007(Temp), f. & cert. ef. 1-8-07 thru 7-6-07; EDD 2-2007, f. 6-15-07, cert. ef. 7-1-07; OBDD 1-2010(Temp), f. & cert. ef. 1-5-10 thru 7-4-10

123-065-0059

Maximum Number of Enterprise Zones

(1) The maximum number of enterprise zones that may be designated is 57, plus:

(a) Any designation based on a federal enterprise zone under ORS 285C.085 (see OAR 123-065-1700 to 123-065-1799), as well as re-designations of such an enterprise zone; and

(b) Any designation of a reservation enterprise zone under ORS 285C.306.

(2) At the time of the last amendment of this rule (by way of example and to establish matters for the record), 55 enterprise zones are in existence by designation of the Director (or tribal government):

(a) Seventeen under ORS 285C.065 and 285C.080 (which permit three more designations);

(b) Thirty-six under ORS 285C.065 and 285C.250 (which permit one more designation);

(d) One under ORS 285C.306.

(3) This rule neither affects nor is it necessarily affected by the designation of any federal enterprise zone.

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.050, 285C.065, 285C.115, 285C.250, 285C.306 & 285C.320
Hist.: EDD 14-1999, f. 10-22-99, cert. ef. 10-23-99; EDD 9-2000, f. & cert. ef. 5-2-00; Renumbered from 123-065-0048, EDD 1-2005, f. & cert. ef. 2-25-05; Suspended by EDD 1-2007(Temp), f. & cert. ef. 1-8-07 thru 7-6-07; Renumbered from 123-065-0049, EDD 2-2007, f. 6-15-07, cert. ef. 7-1-07

123-065-0080

Boundaries and Dimensions

For purposes of an enterprise zone designation or boundary change:

(1) Except as allowed in OAR 123-065-0090, the straight-line distance between any two points within the zone may not exceed 12 miles.

(2) The total area of the zone may not exceed 12 square miles, not including:

(a) Areas below the ordinary high water mark of navigable bodies of water; and

(b) Roads, tracks, transmission lines or right of ways that nominally connect separate areas of the zone.

(3) Except as allowed in OAR 123-065-0090, 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.

(4) No part of the zone may be inside the boundaries of another enterprise zone.

(5) No part of this rule (or OAR 123-065-0090) excludes an enterprise zone designated or amended under federal law.

(6) Other than section (4), no part of this rule (or OAR 123-065-0090) excludes an enterprise zone designated or amended under ORS 285C.085 or 285C.306.

(7) Consistent with subsection (2)(a) of this rule, the zone boundary may encompass areas below the ordinary high water mark; such areas are:

(a) Naturally limited to the borders/territory of this state respective to the zone sponsor's jurisdiction, including but not limited to areas of the ocean up to three nautical miles directly from shore; and

(b) Simply ignored for purposes of the 12-square-mile maximum.

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.065 & 285C.090
Hist.: EDD 1-1997, f. & cert. ef. 1-7-97; EDD 13-1997, f. & cert. ef. 11-10-97; EDD 1-2005, f. & cert. ef. 2-25-05; EDD 1-2007(Temp), f. & cert. ef. 1-8-07 thru 7-6-07; EDD 2-2007, f. 6-15-07, cert. ef. 7-1-07

123-065-0090

Extended Distances in Rural Zones

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

(1) This rule applies only to rural enterprise zones.

(2) The maximum distance allowed in OAR 123-065-0080(1) is increased from 12 to:

(a) Twenty-five lineal miles, if no area of the zone is in a county listed in section (5) of this rule; or

(b) Twenty lineal miles, if some but not all of the area of the zone lies in a county listed in section (5) of this rule.

(3) The maximum distance allowed in OAR 123-065-0080(3) is increased from 5 to 15 lineal miles if none of the separate area is in a county listed in section (5) of this rule.

(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 for a particular enterprise zone designation or boundary change:

(a) As specifically requested in resolutions adopted 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

(5) The counties of this state that are too densely populated for purposes of this rule include:

(a) Any county for which a shrinkage of its area, growth in its population or combination thereof results in a population density for the county in excess of 100 persons per square mile (In this case, ORS 285C.120(1) would govern an enterprise zone, the dimensions of which had otherwise been allowed as described in this rule);

(b) Any future, new county for which the actual population and area correspond to a population density for the county in excess of 100 persons per square mile; and

(c) The following existing counties (unless there is a change in the county's circumstances contrariwise to subsection (a) of this section):

(A) Benton County;

(B) Clackamas County;

(D) Multnomah County;

(E) Washington County; and

(F) Yamhill County.

(6) For purposes of section (5) of this rule, to compute population density of a county, divide the latest estimate for the county's total population by the current area of the county in terms of square miles.

(7) Nothing in this rule affects the restriction of up to but not more than 12 square miles for total enterprise zone area described in OAR 123-065-0080.

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.050, 285C.065, 285C.090, 285C.120 & 285C.350
Hist.: EDD 13-1997, f. & cert. ef. 11-10-97; EDD 9-2000, f. & cert. ef. 5-2-00; EDD 1-2005, f. & cert. ef. 2-25-05; EDD 1-2007(Temp), f. & cert. ef. 1-8-07 thru 7-6-07; EDD 2-2007, f. 6-15-07, cert. ef. 7-1-07

123-065-0095

Tests for Waiving Rural Distance Maxima

For a waiver as described in OAR 123-065-0090(4), the Director must find that each of the following three points is satisfied:

(1) The impracticality of separate enterprise zones as an alternative, such that, for example:

(a) An area or areas proposed for inclusion in the enterprise zone are isolated sites or small communities;

(b) Administration of such area as its own zone is infeasible; or

(c) The number of enterprise zones remaining to be designated is limited relative to future designations sought by larger places.

(2) Effective administration within the overall requested enterprise zone boundary is demonstrated by facts such as the following:

(a) Located entirely in one county;

(b) Relatively direct and efficient travel distances by road;

(d) The existing zone sponsor devotes sufficient resources for management of the extended zone; or

(e) Local personage will act as special contact or co-manager for particular area.

(3) Furtherance of the goals and purpose of applicable state policies is indicated, if development of areas to be commonly included in the zone do not directly undermine state land use goals, and by special circumstances such as the following:

(a) The opportunity to efficiently and expeditiously site a significant business investment;

(b) The area exhibits particular hardship, but also the potential for economic development; or

(c) The local jurisdictions involved in the boundary change express strong preference for it as opposed to a separate enterprise zone.

Stat. Auth.: ORS 285A.075, 285C.060(1) & 285C.120(2)
Stats. Implemented: ORS 285C.120
Hist.: EDD 1-2005, f. & cert. ef. 2-25-05

Explication of Statutory Terms

123-065-0100

Rural and Urban Zones

(1) "Enterprise zone" means an area designated, as defined in ORS 285C.050(8), and 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; or

(b) The urban growth boundary encompassing:

(A) Bend;

(B) Corvallis;

(D) Medford; or

(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, such that the zone includes areas both inside and outside of a regional or metropolitan urban growth boundary as defined in section (2) of this rule, except for a (rural) reservation enterprise zone.

(4) If a new or newly modified regional or metropolitan urban growth boundary intersects an existing enterprise zone, the zone's categorization as either rural or urban 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 change accordingly.

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.050 - 285C.250
Hist.: EDD 3-1996, f. & cert. ef. 4-2-96; EDD 13-1997, f. & cert. ef. 11-10-97; EDD 1-2005, f. & cert. ef. 2-25-05; EDD 1-2007(Temp), f. & cert. ef. 1-8-07 thru 7-6-07; EDD 2-2007, f. 6-15-07, cert. ef. 7-1-07

123-065-0140

The Sponsor of an Enterprise Zone

As defined under ORS 285C.050(19), described in OAR 123-065-0010, and used in ORS 285C.050 to 285C.250 and in this division of administrative rules:

(1) "Sponsor" or "zone sponsor" means:

(a) The single city, port or county (or tribal government) that applied for the most recent designation of the enterprise zone; or

(b) Collectively, the city or cities, port or ports, county or counties and/or any combination thereof (and/or tribal government) that:

(A) Applied for the most recent designation of the enterprise zone; or

(B) Joined the zone since designation as part of a change to the zone boundary under ORS 285C.115(7) (or under 285C.068 in the case of a port).

(2) Depending on the particular context, "a sponsor" or "a zone sponsor" may refer to a single sponsoring entity or cosponsor of the enterprise zone included in subsection (1)(b) of this rule. One shall not construe any such reference as superseding or interfering with ORS 285C.105(2), which compels all cosponsors to act jointly in fulfilling the duties of the zone sponsor and in taking any action with respect to the zone, except for:

(a) Restriction on hotel/resort eligibility by a city or county; or

(b) Local incentives as described in OAR 123-065-0240.

(3) The zone sponsor does not include and is not any city, port or county that simply consented to having part of its territory contained in the zone as described in OAR 123-065-0010.

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.050 - 285C.250 & 285C.320
Hist.: EDD 5-1998, f. 3-12-98, cert. ef. 3-15-98; EDD 1-2005, f. & cert. ef. 2-25-05; EDD 1-2007(Temp), f. & cert. ef. 1-8-07 thru 7-6-07; EDD 2-2007, f. 6-15-07, cert. ef. 7-1-07

123-065-0150

Assessment and Tax Years

As used in ORS 285C.050 to 285C.250 and this division of administrative rules (consistent with the definitions under ORS 285C.050(1), (20) and (22) and 308.007), "year" or "assessment year" means a calendar year of January 1 to December 31, unless:

(1) Modified as (property) "tax year" which is the 12-month period from July 1 to June 30; or

(2) The context indicates or implies a 12-month period following or preceding an event.

Stat. Auth.: ORS 285A.075(5) & 285C.060(1)
Stats. Implemented: ORS 285C
Hist.: EDD 5-1998, f. 3-12-98, cert. ef. 3-15-98; EDD 1-2005, f. & cert. ef. 2-25-05

Duties and Options of Zone Sponsor

123-065-0200

Local Zone Manager

For purposes of ORS 285C.105(1)(a):

(1) The sponsor of an enterprise zone shall appoint the local zone manager through official declaration or action by each cosponsor or by all of them in collective fashion but not necessarily by resolution.

(2) The sponsor or a particular cosponsor may delegate the authority to appoint the local zone manager to a person or body including but not limited to the current local zone manager.

(3) The sponsor may make appointment of a local zone manager by way of an established position at a local agency or organization, whether public or private, as opposed to a named person.

(4) The sponsor may appoint up to but not more than two persons to serve as local co-managers of the zone.

(5) Except as explicitly proscribed by the zone sponsor, the local zone manager shall act as the agent and representative of the enterprise zone in regard to any and all ministerial, intergovernmental, technical or promotional functions of the zone sponsor.

(6) The local zone manager may be empowered by and on behalf of the sponsor or of a cosponsor of the enterprise zone to make discretionary decisions that do not specifically require adoption of a resolution by the sponsor's governing body or bodies under ORS 285C.050 to 285C.250 or as described in this division of administrative rules.

(7) Whenever a local zone manager is appointed or a new person fills the appointed position, the sponsor needs to give written notice to the Department, the Department of Revenue and the county assessor soon afterwards.

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.105
Hist.: EDD 3-1996, f. & cert. ef. 4-2-96; EDD 5-1998, f. 3-12-98, cert. ef. 3-15-98; EDD 1-2005, f. & cert. ef. 2-25-05; EDD 1-2007(Temp), f. & cert. ef. 1-8-07 thru 7-6-07; EDD 2-2007, f. 6-15-07, cert. ef. 7-1-07

123-065-0210

Reporting by the Enterprise Zone Sponsor

(1) Within six months after designation of any enterprise zone, the sponsor of the zone shall provide to the Department, the Department of Revenue, the county assessor, the contact agency for first-source hiring agreements and local institutions involved in marketing the zone the following information (even if contained in the application for designation):

(a) A description and examples of marketing plans, efforts or materials for the zone;

(b) A final inventory and references to enabling instruments (such as local ordinances) for any local incentive proposed as binding in the application;

(c) A list, map or other information necessary for identifying publicly owned land or buildings that are available for lease or purchase by an eligible business firm within the zone under ORS 285C.110 (see OAR 123-065-0255);

(d) For an urban zone, indices identifying all land within the zone (specific tax lots or street addresses needed only for property at which eligible development may occur);

(e) Description of any policies, conditions or reasonable requirements that the sponsor has adopted or will seek to implement and enforce under ORS 285C.150, 285C.155 or 285C.160 with respect to authorized business firms;

(f) Documentation of any final arrangement or agreement pursuant to OAR 123-065-1080;

(g) Confirmation/appointment of local zone manager as described in OAR 123-065-0200; and

(h) The final form of election to allow hotel, motel or destination resorts as eligible business firms in all or certain city or county jurisdictions of the enterprise zones, for which newly adopted resolution(s) are necessary to effectively change an election made by resolution(s) adopted for purposes of the application.

(2) Each year by November 1, the zone sponsor shall provide to the Department, the Department of Revenue, the county assessor, the contact agency for first-source hiring agreements and local institutions involved in marketing the enterprise zone:

(a) A list of all outstanding investments proposed by business firms that have been and remain actively authorized in the zone, but that are not yet qualified for (most of) the investment, along with any updated estimate of expected new jobs or the cost of proposed qualified property;

(b) Commentary on efforts to assist authorized and qualified business firms or the county assessor with new or ongoing enterprise zone exemptions; and

(A) What is listed in section (1) of this rule; and

(B) Such matters as the zone boundary, public outreach, available industrial land within the zone, and local training and education resources.

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.065, 285C.070, 285C.105 & 285C.110
Hist.: EDD 3-1996, f. & cert. ef. 4-2-96; EDD 5-1998, f. 3-12-98, cert. ef. 3-15-98; EDD 1-2005, f. & cert. ef. 2-25-05; EDD 1-2007(Temp), f. & cert. ef. 1-8-07 thru 7-6-07; EDD 2-2007, f. 6-15-07, cert. ef. 7-1-07

123-065-0220

Authorization Filing Fee

For purposes of ORS 285C.140(1)(c):

(1) When applying for authorization under ORS 285C.140, an eligible business firm may be required to pay a fee that is set by the sponsor of the enterprise zone at:

(a) Zero -- that is, the fee is waived;

(b) $200; or

(c) Any amount not exceeding 0.1 percent of the total estimated cost of the firm's proposed investment in qualified property.

(2) The requirement of an authorization filing fee shall be consistently and uniformly applied by the sponsor of the enterprise zone, including but not necessarily through written guidelines, such that the sponsor may vary the fee consistent with section (1) of this rule according to certain criteria or situational factors such as the size or nature of the eligible business firm or its proposed investment.

(3) The factors under which the requirement, waiver or amount of an authorization filing fee may deviate from the usual practice shall be defined through written guidelines.

(4) Failure by an eligible business firm to pay the required filing fee at the time of the firm's submitting an application for authorization may be grounds for the local zone manager's refusal to process or to approve the application on behalf of the zone sponsor.

(5) A zone sponsor that requires an authorization filing fee shall collect payment by check in U.S. funds with the application for authorization.

(6) If either the zone sponsor or the county assessor deny the application of an eligible business firm for authorization under ORS 285C.140, any payment of an authorization filing fee shall be refunded in full to the eligible business firm.

(7) If both the zone sponsor and the county assessor have approved an eligible business firm's application for authorization under ORS 285C.140, neither the zone sponsor nor the county assessor may later deny the eligible business firm's authorization, qualification or exemption because of failure to receive or collect payment of an authorization filing fee.

(8) If a business firm is denied an exemption under ORS 285C.170 or 285C.175, the zone sponsor shall be under no obligation to refund any amount of an authorization filing fee that was paid by the business firm, unless the business firm is ineligible under ORS 285C.135 or was otherwise authorized improperly or by mistake.

Stat. Auth.: ORS 285A.075, 285C.060(1) & 285C.140(1)
Stats. Implemented: ORS 285C.140
Hist.: EDD 3-1996, f. & cert. ef. 4-2-96; EDD 5-1998, f. 3-12-98, cert. ef. 3-15-98; EDD 1-2005, f. & cert. ef. 2-25-05

123-065-0230

Additional Conditions in an Urban Enterprise Zone

For purposes of additional conditions imposed on eligible business firms by the sponsor of an urban enterprise zone under ORS 285C.150:

(1) The sponsor of the enterprise zone shall abide by OAR 123-065-2500 to 123-065-2599.

(2) "Groups of persons" as used in ORS 285C.150(2) may comprise the general populace or labor force or any lesser number of persons that is not explicitly defined in terms of geography/residency.

(3) In order to effect and enforce compliance, the sponsor of an urban zone must include with its approval of an application for authorization written information that concisely lists and describes the specific additional conditions to which the firm commits, or to which it may be obligated under certain contingencies which must also be specified.

(4) The written information as described in section (3) of this rule shall appear in a standardized format that conforms to the policy that the zone sponsor has adopted for imposition of such additional conditions, and that is used for all eligible business firms authorized in that urban enterprise zone.

(5) Failure by a firm to satisfy such additional local conditions of an urban zone may affect the exemption in the following ways:

(a) Denial of the authorization under ORS 285C.140(2)(e), but only if the firm does not formally "commit" to meet the conditions;

(b) Refusal of initial qualification for exemption under ORS 285C.175; or

(c) Disqualification of an ongoing exemption in accordance with ORS 285C.240(1)(d), except as provided under 285C.240(6).

(6) The county assessor has an obligation to effect actions described in subsection (5)(b) or (c) of this rule only insofar as the zone sponsor has provided timely and written notification of such failure.

(7) An eligible business firm shall have the same rights of appeal as provided elsewhere in ORS 285C.050 to 285C.250 for authorization and receipt of the enterprise zone exemption.

(8) The policy and standards adopted by the sponsor affect only proposed investments for which the eligible business firm applies for authorization after the date of adoption.

(9) The additional conditions may be imposed only pursuant to a policy and standards, such that:

(a) The policy entails the adoption by the zone sponsor of formal documentation outlining the sponsor's purposes, process, factors of consideration and so forth; and

(b) The policy contains standards consisting of established and transparent measures, methods or criteria to implement the policy and define the conditions, as well as specific consequences for the firm's failure to satisfy those conditions.

(10) Any imposed additional condition must relate in some way to employment opportunities for one or more groups of persons, through:

(a) Actions by the eligible business firm;

(b) Use of funds or resources from the firm;

(d) Other means, for which the result is employment-related benefits for groups of persons, consistent with 47 OTR 557 (TC 4167, 1999).

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.150
Hist.: EDD 3-1996, f. & cert. ef. 4-2-96; EDD 5-1998, f. 3-12-98, cert. ef. 3-15-98; EDD 9-2000, f. & cert. ef. 5-2-00; EDD 1-2005, f. & cert. ef. 2-25-05

123-065-0240

Enhanced Public Services and Other Local Incentives

For purposes of local incentives inside an enterprise zone within the applicable city, port or county jurisdiction or service territory under ORS 285C.105(1)(b):

(1) Such local incentives include but are not limited to:

(a) Enhanced availability or efficiency of local public services, such as utilities, transportation access and public safety protection;

(b) Waivers, discounts or credits for local fees, charges, business/license taxes and so forth; or

(c) Regulatory flexibility, expedited/simplified permitting, special zoning designations, exceptions from ordinances, or the like that do not significantly undermine regulations pertaining to health & safety.

(2) Unless described as discretionary, any such incentive is binding on the city, port or county sponsoring the zone and must be implemented and made available no later than six months after the effective date of the designation or boundary change, as proposed in the resolution, by which the city, port or county:

(a) Applied for designation of the zone, as described in OAR 123-065-1520(5); or

(b) Requested to be added as a cosponsor of the zone in conjunction with a request to change the boundary of the zone under ORS 285C.115(7).

(3) Within six months of the relevant effective date in section (2) of this rule, a city, port or county may formally declare and implement one or more such incentives that are in addition to and, if so indicated in the declaration, are as binding on the city or county for the life of the zone as previously proposed incentives.

(4) Except as provided in section (5) of this rule, any such incentive shall be available or provided to no fewer than all authorized business firms that qualify under ORS 285C.200 on an equal basis within that portion of the enterprise zone exclusive to the relevant jurisdiction or service territory.

(5) A city or county cosponsor may formally differentiate the incentives available to business firms operated as a hotel, motel or destination resort (if eligible in that part of the zone).

(6) For purposes of ORS 285C.245(5), in the case where the zone sponsor proposes one or more new incentives to replace an incentive or incentives that are binding according to this rule:

(a) "Comparable value" means that the new incentives or incentives, as a whole, shall be measured relative to what they would collectively replace, in terms of not only direct financial benefits to business firms, but also non-dollar factors such as convenience.

(b) In determining whether "reasonable corrections of shortcomings in existing local incentives" are being made, the Department may consider and take into account the extent to which an existing incentive significantly impairs or is reasonably expected to jeopardize the ability to provide services and incentives to eligible business firms in general, because it excessively:

(A) Benefits some or all authorized or qualified firms; or

(B) Burdens local budgetary resources or utility capacity.

(7) That such an incentive is generally used by and available to other business firms within the enterprise zone or elsewhere in the cosponsor's political or service territory does not affect its status as binding for purposes of the zone.

(8) A local incentive offered or binding in one cosponsor's jurisdiction or territory has no bearing on the incentives of any other cosponsor.

(9) In accordance with applicable state or local laws, charters, ordinances or conventions, a city, port or county that sponsors an enterprise zone may offer to authorized or qualified business firms other incentives that are not binding, although the Department shall not formally recognize such discretionary incentives in the context of:

(a) Benefits customarily offered to an eligible business firm investing in the enterprise zone for purposes of marketing and related efforts to retain, expand, start or recruit such firms; and

(b) Awarding points for competitive criteria that influence designation of a proposed zone (OAR 123-065-1570).

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.065, 285C.105, 285C.115 & 285C.245
Hist.: EDD 5-1998, f. 3-12-98, cert. ef. 3-15-98; EDD 1-2005, f. & cert. ef. 2-25-05; EDD 1-2007(Temp), f. & cert. ef. 1-8-07 thru 7-6-07; EDD 2-2007, f. 6-15-07, cert. ef. 7-1-07

123-065-0255

Locally Available, Public Real Estate

For purposes of ORS 285C.105(1)(g) and 285C.110, the zone sponsor shall:

(1) Prepare and maintain a list and map of land, buildings and structures within the zone that are:

(a) Owned by any agency on behalf of the state government or by a municipal corporation;

(b) Not used or designated for some public purpose; and

(2) Undertake reasonable efforts to make the real estate identified in section (1) of this rule available for lease or purchase by authorized or qualified business firms.

(3) Except as otherwise precluded under Oregon or federal law/constitutional provisions, such firms are entitled to acquire the real estate identified in section (1) of this rule at a fair market rate/price, subject to the leasing or purchasing firm's prompt development or redevelopment of the property pursuant to the application of authorization.

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.105 & 285C.110
Hist.: EDD 1-2005, f. & cert. ef. 2-25-05

Changes to Enterprise Zone Boundaries

123-065-0300

Definitions

"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.

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.115
Hist.: EDD 3-1996, f. & cert. ef. 4-2-96; EDD 5-1998, f. 3-12-98, cert. ef. 3-15-98; EDD 1-2005, f. & cert. ef. 2-25-05

123-065-0310

Boundary Change Request by Zone Sponsor

The request by the sponsor of an enterprise zone for a change to the zone boundary under ORS 285C.115 shall address the following:

(1) Resolutions lately adopted by the governing body of each existing and proposed member comprising the zone sponsor, copies of which are included.

(2) Change or retention of the zone's official name.

(3) Definition of enterprise zone boundary in accordance with OAR 123-065-1000.

(4) Consideration of economic hardship conditions in or near any area proposed for addition to the zone, relative to economic hardship for the existing enterprise zone and local areas associated with it consistent with OAR 123-065-0365.

(5) Adherence to OAR 123-065-0320 and 123-065-0330, including but not limited to commentary about the following:

(a) Usability of land proposed for addition or removal;

(b) Location of new areas to be added respective to urban growth boundaries; and

(6) Conformity with:

(a) Mandatory city/county/port sponsorship or consent described in OAR 123-065-0010, such that despite previous consent by resolution of a city, port or county governing body, the zone sponsor will still need further consent for any subsequent boundary change that adds area inside territory of the city, port or county, unless the previous resolution expressively granted such open-ended consent;

(b) Spatial parameters for an enterprise zone delineated in OAR 123-065-0080 or 123-065-0090; and

(A) Sites of all current, actively authorized business firms; and

(B) At least half of the land originally in the zone.

(7) For a proposed new cosponsor, as desired and contained in its resolution:

(a) Binding proposals to provide local incentives under ORS 285C.115(7)(a) (consistent with OAR 123-065-0240) to authorized or qualified business firms locating or expanding in parts of the proposed zone exclusive to that jurisdiction or port district; or

(b) A restriction in the case of a city or county under ORS 285C.115(7)(b) from hotel, motel or destination resort businesses being eligible in the enterprise zone exclusive to that city or county jurisdiction (but only if such businesses are eligible elsewhere in the existing zone under ORS 285C.070 or section 56(1), chapter 662, Oregon Laws 2003).

(8) Request for a needed waiver of maximum rural distances per OAR 123-065-0090(4).

(9) Explain, as appropriate, why the change to the zone boundary complements the zone's strategic plan or marketing efforts as formulated in or since the application for designation of the zone.

(10) Describe any immediate justification, as appropriate, for the change to the zone boundary, including but not limited to one or more of the following:

(a) The ability to immediately site and authorize a prospective investment by an eligible business firm that will result in:

(A) Significant new employment;

(B) Preservation of local full-time jobs that would otherwise be lost;

(D) Valuable new training opportunities for local workers; or

(E) Diversification of the local economy;

(b) The opportunity to exploit recent changes in local land use designations and ordinances consistent with the purpose of an enterprise zone under ORS 285C.050 to 285C.250;

(c) The extension of enterprise zone benefits to a city, port or county that is not sponsoring a current enterprise zone; or

(d) Other compelling reasons of the zone sponsor.

Stat. Auth.: ORS 285A.075, 285C.060(1), 285C.066 & 285C.115(6)
Stats. Implemented: ORS 285C.060 & 285C.115
Hist.: EDD 3-1996, f. & cert. ef. 4-2-96; EDD 5-1996, f. & cert. ef. 6-24-96; EDD 1-997, f. & cert. ef. 1-17-97; EDD 5-1998, f. 3-12-98, cert. ef. 3-15-98; EDD 9-2000, f. & cert. ef. 5-2-00; EDD 1-2005, f. & cert. ef. 2-25-05; EDD 1-2007(Temp), f. & cert. ef. 1-8-07 thru 7-6-07; EDD 2-2007, f. 6-15-07, cert. ef. 7-1-07

123-065-0320

Limitations on Boundary Changes

(1) The Director or the Director's designee may approve a change in an enterprise zone's boundary as requested by the zone sponsor only if land as described in section (2) of this rule comprises:

(a) Not less than 20 percent of the land to be added (except as specially allowed by the Department); and

(b) None of what the sponsor proposes for removal.

(2) Useable land for purposes of section (1) of this rule excludes residential or agricultural properties and includes but is not limited to sites that are:

(a) Zoned outright for uses germane to eligible business firms consistent with an acknowledged comprehensive land use plan;

(b) Free of serious impediments to development and use by eligible business firms due to cultural or environmental concerns/regulations;

(c) Provided with or can be effectively provided with infrastructure, road access, utilities and public services that are adequate for eligible business operations; and

(d) Vacant or available for substantial new occupancy, expansions or improvements by one or more eligible business firms.

(3) In order for the boundary of a rural enterprise zone to be modified, such that it contains new or expanded areas outside of any urban growth boundary, the request for the boundary change must indicate and explain as described in OAR 123-065-0310(10) to the satisfaction of the Department that there is significant justification for the change.

(4) The Director or Director's designee may not approve a boundary change if:

(a) It adds any area that is:

(A) Outside a regional or metropolitan urban growth boundary, to an urban enterprise zone; or

(B) Inside such a boundary, to a rural zone;

(b) It adds area within another current enterprise zone; or

(c) A new cosponsor to be added under ORS 285C.115(7) is a city, port or county that had sponsored an enterprise zone terminated under ORS 285C.245(4) or (5), except in the case of a county if the terminated zone was also city/port-sponsored and none of the area proposed for addition was inside the terminated zone.

(5) Neither a boundary change nor any comparable procedure allows a city, port or county government:

(a) To make hotel/resort businesses eligible unless such firms are eligible in the zone already under ORS 285C.070 or section 56(1), chapter 662, Oregon Laws 2003; or

(b) To renounce, rescind or terminate its existing sponsorship and inclusion in the zone, which is possible only by termination of the entire zone under ORS 285C.245 or by dissolution of the jurisdiction.

Stat. Auth.: ORS 285A.075, 285C.060(1), 285C.066 & 285C.115(6)
Stats. Implemented: ORS 285C.065 & 285C.115
Hist.: EDD 3-1996, f. & cert. ef. 4-2-96; EDD 5-1998, f. 3-12-98, cert. ef. 3-15-98; EDD 1-2005, f. & cert. ef. 2-25-05; EDD 1-2007(Temp), f. & cert. ef. 1-8-07 thru 7-6-07; EDD 2-2007, f. 6-15-07, cert. ef. 7-1-07

123-065-0330

Public Involvement with Boundary Change

In order for a requested change to an enterprise zone's boundary to be approved, the zone sponsor must solicit public involvement that:

(1) Occurs prior to the approval of resolutions as described in OAR 123-065-0310(1) or prior to the submission of a revised request for the boundary change under ORS 285C.115(8);

(2) Is commensurate with the scale and potential impact of the requested boundary change on members of the public, subject to the sponsor's judgment and a case-specific review by the Department, which shall recognize, for example, that a minor addition of land within an urban growth boundary will generally necessitate little or no public involvement;

(3) Potentially includes but is not necessarily dependent on such activities as: Public notice, period of public comment, dissemination of information or public meeting/hearing; and

(4) Conforms with and includes documentation stipulated in OAR 123-065-1050 for timely communication with local taxing districts, including but not limited to:

(a) Districts with territory that is already in the enterprise zone; and

(b) Special consultation if the request proposes inclusion of a new cosponsor or extensive area.

Stat. Auth.: ORS 285A.075, 285C.060(1) & 285C.115(6)
Stats. Implemented: ORS 285C.115
Hist.: EDD 3-1996, f. & cert. ef. 4-2-96; EDD 5-1996, f. & cert. ef. 6-24-96; EDD 5-1998, f. 3-12-98, cert. ef. 3-15-98; EDD 9-2000, f. & cert. ef. 5-2-00; EDD 1-2005, f. & cert. ef. 2-25-05; EDD 1-2007(Temp), f. & cert. ef. 1-8-07 thru 7-6-07; EDD 2-2007, f. 6-15-07, cert. ef. 7-1-07

123-065-0350

Special Cases for Boundary Changes

(1) If modification of a local, state or federal definition or delineation causes a previously existing regional or metropolitan urban growth boundary to intersect a rural enterprise zone, a change to the zone boundary may not add areas within the regional or metropolitan urban growth boundary, as it existed before intersecting the zone.

(2) If a city annexes into its jurisdiction an area of an enterprise zone, of which the city is not a sponsor, or to which the city did not consent under ORS 285C.065(1):

(a) The tax exemptions of authorized or qualified business firms in the annexed area shall continue unaffected;

(b) An eligible business firm proposing an investment in qualified property at a location in the annexed area of the zone may be authorized contingent on an amendment to the zone's sponsorship as provided in subsection (c) of this section; and

(c) An eligible business firm authorized consistent with subsection (b) of this section may not qualify nor receive an enterprise zone exemption for the investment unless and until such time as the Director or the Director's designee approves a request by resolutions of the zone sponsor and the city, such that either:

(A) The city becomes a new cosponsor of the zone under ORS 285C.115(7); or

(B) The city consents consistent with ORS 285C.065(1) that the zone may contain area within the city's jurisdiction.

(3) A non-sponsoring city, port or county need neither consent nor cosponsor in order for a boundary change to add area outside its territory, even if the enterprise zone already contains territory of the city, port or county due to prior consent, changes to the jurisdiction, or the situation preceding effectiveness of chapter 704, Oregon Laws 2005 (November 4, 2005).

(4) A port's joining an existing enterprise zone under ORS 285C.068 is equivalent to a boundary change, aside from not adding or removing any area and other specific provisions of ORS 285C.115.

(5) A boundary change request must involve port consent or sponsorship in order to add area anywhere inside the territory of the port to an enterprise zone, even incorporated areas of a city sponsor.

Stat. Auth.: ORS 285A.075, 285C.060(1) & 285C.066
Stats. Implemented: ORS 285C.065, 285C.068 & 285C.115
Hist.: EDD 3-1996, f. & cert. ef. 4-2-96; EDD 5-1998, f. 3-12-98, cert. ef. 3-15-98; EDD 9-2000, f. & cert. ef. 5-2-00; EDD 1-2005, f. & cert. ef. 2-25-05; EDD 1-2007(Temp), f. & cert. ef. 1-8-07 thru 7-6-07; EDD 2-2007, f. 6-15-07, cert. ef. 7-1-07

123-065-0365

Economic Conditions

Under ORS 285C.115(2)(c), an area may not be added to an enterprise zone if it contains or adjoins residential areas that are significantly better-off, economically, compared to the original area of the enterprise zone, such that:

(1) Economic statistics for the original enterprise zone may be based on data:

(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 123-065-0310(4), this issue may be dealt with though general commentary if it is readily apparent that areas to be added to the zone:

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

(b) Have/border only residential areas with more severe economic hardship conditions.

(3) If the case for subsection (2) cannot be so plainly made, then the request shall contain a suitable comparison of the original zone's economics to Census Statistical Units that contain, overlap and/or are 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, are:

(a) Less than 25 percent zoned for residential use; or

(b) Have generally the same or a lower/higher level/rate of household or personal income/poverty, or alternatively a higher unemployment rate, compared to the original zone.

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.115
Hist.: EDD 1-2005, f. & cert. ef. 2-25-05

Common Matters for Designations and Boundary Changes

123-065-1000

Defining the Zone Boundary

Any proposed enterprise zone designation or boundary change, as described in this division of administrative rules, shall demonstrate adherence with OAR 123-065-0080 or 123-065-0090 by including all of the following with the application or request that is submitted to the Department:

(1) Estimate to the nearest 0.1 square miles of the entire proposed enterprise zone area (pursuant to boundary change).

(2) Map or set of maps drawn to scale with a clear representation of the entire enterprise zone's proposed boundary, such that:

(a) Maps must contain north directional arrow, legend/scale and title with the name of the zone;

(b) An overview map showing the entire proposed zone boundary is always required;

(c) As necessary, inset or sub-maps are used to adequately show detail for portions of the zone, as referenced or linked to the overview map; and

(d) In the case of a boundary change, separate mapping of areas to be specifically added or removed is mandatory.

(3) Narrative legal description of the enterprise zone's boundary in a continuous fashion corresponding to the overview map in section (2) of this rule (with separate descriptions for areas being added or removed by a boundary change). Although it is principally based on metes & bounds surveying, for the sake of simplification, one or more of the following may substitute for some or all of the metes & bounds, where it exactly corresponds or coincides to the enterprise zone boundary:

(a) Permanent landmarks or natural margins such as a waterway, road, track or transmission line;

(b) Official borders or demarcations such as city limit, urban growth boundary, county line or right of way, provided that dated documentary references are made (zone boundary will not automatically change with later changes to these demarcations);

(d) Whole cadastral sections, quarter sections and so forth (with official, dated documentation); or

(e) Tax lots as dated and documented through the county assessor's office in association with maps used for section (2) of this rule.

Stat. Auth.: ORS 285A.075, 285C.060(1), 285C.065(3) & 285C.250(4)
Stats. Implemented: ORS 285C.060, 285C.065, 285C.075, 285C.085, 285C.090, 285C.115, 285C.120 & 285C.250
Hist.: EDD 1-2005, f. & cert. ef. 2-25-05

123-065-1050

Notice to Local Taxing Districts

An application to designate an enterprise zone or rural renewable energy development zone or a request to change an existing enterprise zone boundary shall entail notice to and consultation with local taxing districts before making submissions to the Department:

(1) The applicant or zone sponsor must send notice to each taxing district (including but not limited to any municipal corporation or service district listed under ORS 198.010 and 198.180) that levies or has authority to levy ad valorem taxes on property within the proposed area of zone designation or of inclusion by the boundary change. Notice does not need to go to any taxing district that is:

(a) A city, port or county government applying for or sponsoring the zone; or

(b) A service district, urban renewal district, or the like with effectively the same governing body as a city, port or county applicant or sponsor.

(2) For enterprise zone designation under ORS 285C.080 or 285C.250, the notice must be sent at least 21 calendar days before the meeting described in OAR 123-065-1060 and must include, but is not limited to:

(a) An invitation for representation from each district;

(b) An established meeting place, date and time (The applicant is urged to coordinate scheduling with district officials who are known to be interested in relevant issues); and

(3) In the case of an application for designation under ORS 285C.085 or 285C.353 or for a boundary change request under ORS 285C.115, the applicant/sponsor must send the notice at least 21 calendar days before adoption of the requisite resolution by the governing body of the applicant/sponsoring county. If there is no county applicant/sponsor, notice must precede adoption of any requisite resolution by an applicant/sponsoring city or port by 21 calendar days.

(4) The notice described in section (2) or (3) of this rule must also be sent to the county assessor, and it must:

(a) Indicate the probable schedule for consideration of city/port/county resolutions to apply for designation or to request the boundary change;

(b) Explain the limited-duration exemption(s) from taxes on potential property newly invested inside the zone boundary by businesses and how it is subject to certain requirements;

(c) Invite comments on the proposed zone or boundary change to be directed at some or all of the sponsoring city/port/county governments; and

(d) Give contact details for submitting such comments or for receiving further information.

(5) The applicant or zone sponsor must furnish the Department with the following as part of the application or boundary change request:

(a) A list of contact names and mailing addresses for all applicable taxing districts;

(b) A copy of the notice directed at such taxing districts;

(c) Any final document, materials or meeting minutes associated with consultative activities described in OAR 123-065-1060 to 123-065-1080; and

(d) A statement signed by the authorized preparer of the application or request attesting that the notification was sent by regular mail to each listed district on a specified date.

(6) For all written comments received in response to the notice from any relevant taxing district, the applicant or zone sponsor shall send copies to the Department no later than 15 calendar days following receipt or before any applicable deadline whichever is sooner.

(7) A taxing district's objection to or lack of support for the proposed zone designation or boundary change has no bearing on the zone's operation or on exemptions granted to business firms.

(8) Failure to perform any task stipulated by this rule may result in the Director's rescinding the relevant order.

(9) The tasks stipulated in this rule are in no way intended to discourage or replace other local efforts and actions to provide/elicit public information, commentary or involvement, as circumstantially appropriate, or as required by local law, policy, custom or practice.

(10) Copies of items listed in subsections (5)(a) and (b) of this rule shall also be furnished to the Special Districts Association of Oregon (Attn: Government Affairs) by the applicant or zone sponsor.

Stat. Auth.: ORS 285A.075, 285C.060(1), 285C.065(3), 285C.250(4), 285C.353(2) & 285C.370
Stats. Implemented: ORS 285C.060, 285C.065, 285C.075, 285C.085, 285C.090, 285C.115, 285C.120, 285C.250 & 285C.353
Hist.: EDD 1-2005, f. & cert. ef. 2-25-05; EDD 1-2007(Temp), f. & cert. ef. 1-8-07 thru 7-6-07; EDD 2-2007, f. 6-15-07, cert. ef. 7-1-07

123-065-1060

Consultation Meeting for Enterprise Zone Applications

For purposes of ORS 285C.067, the city/port/county applicant for enterprise zone designation shall conduct a public meeting:

(1) That occurs not less than seven days before the adoption of a resolution of application by the governing body of any sponsoring city, port or county.

(2) To which the applicant sends staff and community partners, who are directly involved with the application and knowledgeable about potential business development in the proposed zone, and elected or executive officials of the governments as feasible and appropriate.

(3) At which the applicant:

(a) Makes available or reviews copies of a map of the proposed zone boundary and other such materials related to the application;

(b) Recognizes for the record any written commentary received from a district;

(d) Sees that the proceedings are transcribed or recorded in some manner.

(4) That involves discussion of relevant issues and addresses follow-up steps for analysis or further consultation (see OAR 123-065-1070) or for any arrangement or agreement (per OAR 123-065-1080), as well as plans for submitting the enterprise zone application and for holding public hearings to adopt resolutions.

Stat. Auth.: ORS 285A.075, 285C.060(1), 285C.065(3), 285C.067(2) & 285C.250(4)
Stats. Implemented: ORS 285C.060, 285C.065, 285C.067, 285C.075 & 285C.250
Hist.: EDD 1-2007(Temp), f. & cert. ef. 1-8-07 thru 7-6-07; EDD 2-2007, f. 6-15-07, cert. ef. 7-1-07

123-065-1070

Additional Consultations with Taxing Districts

In anticipation of or subsequent to the meeting described in OAR 123-054-1060, the city/port/county applicant for enterprise zone designation:

(1) May communicate, confer or interact with one or more local taxing districts in other ways, including but not limited to additional public or nonpublic meetings or special means of eliciting feedback and dialogue with districts.

(2) Shall respond within 10 business days to a local taxing district's formal request, and make good faith efforts to fulfill such a request, for a special (one-on-one) meeting or for written comments or answers to specific questions.

(3) Shall assist one or more districts, as requested, to estimate or better understand short/long-term public revenues and service demands under particular assumptions or potentialities about enterprise zone development or (types of) business projects, or to generally quantify such benefits and costs over time (at least 10 years), when possible.

(4) May explore how to effectively resolve relevant, outstanding issues through local government permitting procedures and development standards affecting eligible business firms in the zone, including but not limited to design review, conditional use permits, comprehensive land use planning or zoning ordinances.

123-065-1080

Results of Taxing District Consultations

(1) As a consequence of the consultation procedures described in OAR 123-065-1060 or 123-065-1070, the city/port/county applicant may establish arrangements or agreements with one or more districts, contingent on actual designation of the enterprise zone.

(2) If any such arrangement is made, the applicant shall document it in materials submitted with the application, including but not limited to describing follow-up steps, timelines or outstanding points for any such arrangement or agreement that remains subject to further development or finalization.

(3) Although the applicant might formally execute and document any such arrangement or agreement, the applicant may describe verbal pledges or understandings with the application, but any such description does not itself create or represent a binding obligation on or for the applicant.

(4) This rule does not create any authority over property tax collection or right to obligate or burden the county assessor.

Local Applications and Designation

123-065-1500

Definitions

In addition to terms defined in OAR 123-065-0000, the following definitions apply to applications for designation of an enterprise zone (OAR 123-065-1500 to 123-065-1599):

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

(2) "Basis Point" equals one one-hundredth of a unit of a percentage rate or 1 percent of a Percentage Point.

(3) "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 estimated population of unincorporated territory that is within the boundary of the zone; or

(b) For urban enterprise zones, the estimated population within the boundaries of the zone, plus the estimated population of any Target Community that is used for purposes of OAR 123-065-1630.

(4) "Percentage Point" equals one unit of a percentage rate. (For example, an 8.5-percent unemployment rate is two Percentage Points higher than a 6.5-percent unemployment rate).

(5) "Round of Designation" means the period, not less than 90 days, beginning when one set of enterprise zone designations has taken effect and ending with the effective date for the next set of zone designations, pursuant to separate calls for applications.

(6) "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 Sponsoring Government territory inside the proposed zone).

(7) "Strategic Plan" or "Strategic Planning" means any documentation or descriptions, as submitted with an application for designation of an enterprise zone, as described in OAR 123-065-1650.

Stat. Auth.: ORS 285A.075, 285C.060(1), 285C.065(3) & 285C.250(4)
Stats. Implemented: ORS 285C.065, 285C.075 & 285C.250
Hist.: EDD 1-1997, f. & cert. ef. 1-7-97; EDD 1-1999, f. & cert. ef. 1-26-99; EDD 1-2005, f. & cert. ef. 2-25-05; EDD 1-2007(Temp), f. & cert. ef. 1-8-07 thru 7-6-07; EDD 2-2007, f. 6-15-07, cert. ef. 7-1-07

123-065-1510

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, such that:

(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 (see OAR 123-065-1600 to 123-065-1620):

(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 two Percentage Points higher than the statewide unemployment rate;

(c) The proposed enterprise zone's percentage of persons or households 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 grew by 1 percent, but the state's population growth over the same ten-year period was 16 percent, the proposed enterprise zone would meet this qualification)

(2) A proposed enterprise zone that does not meet one of the comparative measures of economic hardship in section (1) of this rule may still qualify for designation, if one of the following alternative qualifications is satisfied:

(a) The Director or designee determines based on evidence, arguments and cases succinctly presented and documented by the Applicant, including but not limited to a combination of recently available facts and data for social and economic conditions, that the proposed enterprise zone would effectively serve communities with economic needs at least as severe as what is represented in section (1) of this rule and ORS 285C.090(1);

(b) The proposed enterprise zone is located predominantly within a distressed area or areas, as identified by the Department at the time of the zone application, as described in division 024 of this chapter of administrative rules; or

(c) Permanent closures or curtailments within 30 miles of the proposed enterprise zone that have been effected or announced by specified employers during the three years preceding the application deadline are associated with job losses equal to at least 2 percent of the average annual covered employment, as most recently reported by the Employment Department, for the county or counties in which the lost jobs are located.

(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, including but not limited to sites as described in OAR 123-065-1670 that consist of at least:

(a) A certain amount of total acres or two sites of certain minimum size, as specified by the application form in OAR 123-065-1530, for the proposed type of zone; or

(b) Such total/contiguous acreage as the Director or designee may determine to be equivalent to subsection (a) of this section in a particular case.

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

Stat. Auth.: ORS 285A.075, 285C.060(1), 285C.065(3) & 285C.250(4)
Stats. Implemented: ORS 285A.095, 285B.283, 285C.075, 285C.090 & 285C.250
Hist.: EDD 1-1997, f. & cert. ef. 1-7-97; EDD 1-1999, f. & cert. ef. 1-26-99; EDD 1-2005, f. & cert. ef. 2-25-05

123-065-1520

Enterprise Zone Application

The application for designation of an enterprise zone:

(1) Shall be accepted by the Department only if submitted pursuant to an announced Round of Designation, and if on or before the date of the application deadline specified by OAR 123-065-1550(1):

(a) The applicant has sent it, as indicated by a postmark or the receipt of a commercial deliverer; or

(b) The Department has received it at its Salem office by 5 p.m. that day if directly delivered by the Applicant.

(2) Shall include all items and information specified in OAR 123-065-1530, for which failure to perform an associated task may result in termination of the zone after designation under ORS 285C.245(5).

(3) Shall be accepted by the Department from any city, port or county or combination of cities, ports or counties in accordance with OAR 123-065-0010, except that:

(a) A city or port may be a Sponsoring Government for only one application per Round of Designation.

(b) A city with less than 100,000 population may not be a Sponsoring Government, if it is a sponsor of a current enterprise zone, unless that current enterprise zone is to be Terminated by Statute at the conclusion of the Round of Designation, or as allowed by the Director respective to near-term terminations and re-applications.

(c) An Applicant is not eligible if it includes any city, port or county that sponsored an enterprise zone terminated by order of the Director under ORS 285C.245(4) or (5), other than a county if:

(A) A city or port also sponsored the terminated zone; and

(B) None of the proposed enterprise zone area for designation was inside the terminated zone.

(4) Shall specify a name for the proposed zone corresponding to place names or common geographic or jurisdictional terms. (A Preexisting Enterprise Zone shall be distinguished from any previous designation of the same name, as necessary, by the suffix "II," "III," etc.)

(5) 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 123-065-0240) to authorized or qualified business firms locating or expanding in parts of the proposed zone exclusive to that government's political or service territory.

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

(7) Is the only chance for cities or counties to establish under ORS 285C.070, whether a business operating a hotel, motel or destination resort will be eligible under ORS 285C.135(5)(c) in the newly designated enterprise zone, or whether this eligibility will be exclusive to the city or county jurisdiction of one or more Sponsoring Governments. Moreover:

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

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

(c) For a Preexisting Enterprise Zone with an existing election under ORS 285C.070 or section 56(1), chapter 662, Oregon Laws 2003, hotel/resort eligibility will NOT automatically carry over (causing future hotel/resorts to be ineligible throughout the new zone, unless there is 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.: EDD 4-1994, f. & cert. ef. 2-24-94; EDD 10-1995, f. & cert. ef. 12-19-95; EDD 1-1997, f. & cert. ef. 1-7-97, Renumbered from 123-065-0020; EDD 1-1999, f. & cert. ef. 1-26-99; EDD 1-2005, f. & cert. ef. 2-25-05; EDD 1-2007(Temp), f. & cert. ef. 1-8-07 thru 7-6-07; EDD 2-2007, f. 6-15-07, cert. ef. 7-1-07

123-065-1530

Required Elements of Application

An application proposing designation of an enterprise zone must contain:

(1) A form as prescribed by and available from the Department that the Applicant fills out and includes with the information described in this rule.

(2) A copy of a resolution, duly adopted not more than 90 days before submission of the application to the Department for that Round of Designation:

(a) Consistent with OAR 123-065-1540 from each Sponsoring Government; and

(b) Of consent from any other applicable city, port or county (OAR 123-065-0010).

(3) A description of the boundary and surface area of the proposed zone (OAR 123-065-1000).

(4) Information sufficient to verify satisfaction of mandatory qualifications in OAR 123-065-1510 by including:

(a) Data for social and economic conditions (OAR 123-065-1600 to 123-065-1630), which also serve the competitive criteria in OAR 123-065-1560; and

(b) Evidence about the readiness of land for development, including but not limited to an enterprise zone map or narrative highlighting critical sites (OAR 123-065-1670).

(5) Documentation of notice and consultation with local taxing districts (OAR 123-065-1050 to 123-065-1080).

Stat. Auth.: ORS 285A.075, 285C.060(1), 285C.065(3), 285C.066, 285C.067(2) & 285C.250(4)
Stats. Implemented: ORS 285C.065, 285C.075, 285C.090 & 285C.250
Hist.: EDD 1-1997, f. & cert. ef. 1-7-97; EDD 1-1999, f. & cert. ef. 1-26-99; EDD 5-1999(Temp), f. & cert. ef. 8-20-99 thru 10-23-99; EDD 14-1999, f. 10-22-99, cert. ef. 10-23-99; EDD 1-2005, f. & cert. ef. 2-25-05; EDD 1-2007(Temp), f. & cert. ef. 1-8-07 thru 7-6-07; EDD 2-2007, f. 6-15-07, cert. ef. 7-1-07

123-065-1540

Local Resolutions Requesting Designation

The resolutions of Sponsoring Governments for purposes of OAR 123-065-1530(2), proposing and requesting designation of an enterprise zone, shall:

(1) State the Applicant's principal reasons for an enterprise zone, as appropriate.

(2) Acknowledge other participants in a joint application, if any.

(3) Confirm that the Applicant will give priority to the use in a designated zone of any economic development or job training funds received directly or indirectly from the federal government.

(4) Declare that the Applicant will fulfill its duties under ORS 285C.050 to 285C.250 and comply with ORS 285C.105, as described in this division of administrative rules, including but not limited to a commitment to:

(a) Appoint a local zone manager within 90 days of designation, if one is not already appointed through the application; and

(b) Fully implement within six months of designation:

(A) Any proposal in the application for local incentives under ORS 285C.065(4) to (6) (OAR 123-065-0240); and

(B) Duties of the sponsor described in OAR 123-065-0210 and 123-065-0255.

(5) Attest to actions taken for purposes of public involvement, including but not limited to the nature and outcome of the consultations under ORS 285C.067.

(6) Highlight other characteristics of the application or the proposed zone as deemed appropriate by the Sponsoring Government.

(7) Address applicable elections or restrictions for hotel/resort eligibility (see OAR 123-065-1520) or similar matters.

Stat. Auth.: ORS 285A.075, 285C.060(1), 285C.065(3), 285C.067(2) & 285C.250(4)
Stats. Implemented: ORS 285C.065, 285C.067, 285C.070, 285C.095, 285C.105 & 285C.110
Hist.: EDD 1-1997, f. & cert. ef. 1-7-97; EDD 1-1999, f. & cert. ef. 1-26-99; EDD 5-1999(Temp), f. & cert. ef. 8-20-99 thru 10-23-99; EDD 14-1999, f. 10-22-99, cert. ef. 10-23-99; EDD 1-2005, f. & cert. ef. 2-25-05; EDD 1-2007(Temp), f. & cert. ef. 1-8-07 thru 7-6-07; EDD 2-2007, f. 6-15-07, cert. ef. 7-1-07

123-065-1550

Application Receipt and Review

(1) The Department shall issue notice specifying the deadline for applications and the minimum and maximum number of enterprise zones to be designated in a Round of Designation. Such notice shall be announced, communicated or published as the Department determines, including but not limited to being posted at the Department's internet web site, not less than 60 days in advance of the specified deadline.

(2) The Department shall complete a review of all received applications for enterprise zone designation within 60 days after the deadline specified in section (1) of this rule and determine which Applicants meet the requirements and mandatory qualifications under ORS 285C.090 and other applicable provisions of ORS 285C.050 to 285C.250, as described in OAR 123-065-1510 through 123-065-1540.

(3) When the number of qualified Applicants exceeds the maximum number of zones to be designated, or if requested by the Director, the Department shall evaluate the applications using the competitive criteria described in OAR 123-065-1560, 123-065-1570, 123-065-1580 and 123-065-1590, which each entail a category of criteria for evaluating and awarding points on the need, likelihood of success and other qualities of a proposed enterprise zone, such that:

(a) Total points for all of the categories and criteria shall not exceed 2,000.

(b) OAR 123-065-1560(1) to (5) carries a maximum of 750 points, and 123-065-1580 carries a maximum of 500 points.

(c) For each criterion without a definite formula, the Department shall assign points based on a comparison among the Applicants in that Round of Designation.

(d) No penalty shall be associated with either the response or the absence of a response to any criterion.

(e) If two or more Applicants have the same number of total points for all categories, then the tie may be broken by a method determined by the Director.

(f) The evaluation may include input/scoring by external reviewers (that are reasonably expected to be impartial) if justified by the number of qualified Applicants relative to available zones.

(4) In order to be accepted by the Department, all responses to such competitive criteria must be submitted at the time of the application as described in OAR 123-065-1520(1), except for those in OAR 123-065-1570, 123-065-1580 and 123-065-1590 if:

(a) So stipulated in those administrative rules for the particular criterion; or

(b) In the public notice in section (1) of this rule, the Department allows such responses to be submitted within 30 calendar days following the specified deadline. In this case, the Department shall give preliminary indication to all Applicants of the potential importance of such responses, as soon as possible after the deadline.

(5) Except as precluded by section (6) of this rule, the Department shall prepare a staff report to the Director that:

(a) Identifies and delineates basic features of each qualified Applicant;

(b) Summarizes the evaluations and rankings based on the competitive criteria described in this rule;

(d) Highlights key issues and parameters affecting the current Round of Designation.

(6) When the number of qualified Applicants is less than the minimum number of zones to be designated, as specified in the public notice in section (1) of this rule, the Round of Designation is canceled, and a new Round of Designation may begin immediately.

(7) The Department shall contact all unsuccessful Applicants within 30 days of the Director's determination in OAR 123-065-1553, notifying them in writing of why their applications was unqualified or denied.

Stat. Auth.: ORS 285A.075, 285C.060(1), 285C.065(3) & 285C.250(4)
Stats. Implemented: ORS 285C.065, 285C.075, 285C.090 & 285C.250
Hist.: EDD 4-1994, f. & cert. ef. 2-24-94; EDD 10-1995, f. & cert. ef. 12-19-95; EDD 1-1997, f. & cert. ef. 1-7-97, Renumbered from 123-065-0030; EDD 1-1999, f. & cert. ef. 1-26-99; EDD 5-1999(Temp), f. & cert. ef. 8-20-99 thru 10-23-99; EDD 14-1999, f. 10-22-99, cert. ef. 10-23-99; EDD 9-2000, f. & cert. ef. 5-2-00; EDD 1-2005, f. & cert. ef. 2-25-05

123-065-1553

Director's Determination

For purposes of designating enterprise zones:

(1) The Director's consideration shall include but is not limited to the staff report in OAR 123-065-1550.

(2) For a given Round of Designation:

(a) All zones available for designation under ORS 285C.250(1) to replace zones that are Terminated by Statute shall be designated if there are qualified Applicants;

(b) The Director may determine not to designate a zone available under another provision, despite qualified Applicants (beyond any minimum number of designations if so specified in the public notice); and

(3) No enterprise zone shall be designated if any such designation would cause the total number of enterprise zones in existence to exceed the maximum number as described in OAR 123-065-0059.

(4) The decision of the Director as to which qualified Applicant(s) to designate (or deny):

(a) May not be appealed; and

(b) Depends ultimately (subject to sections (1) to (4) of this rule) on the Director's determination of which Applicant/proposed enterprise zone represents the best chance to fulfill the public purposes of the Enterprise Zone Act if designated.

Stat. Auth.: ORS 285A.075, 285C.060(1), 285C.067(2) & 285C.250(4)
Stats. Implemented: ORS 285C.045, 285C.055, 285C.060, 285C.067, 285C.075, 285C.080 & 285C.250
Hist.: EDD 1-2005, f. & cert. ef. 2-25-05; EDD 1-2007(Temp), f. & cert. ef. 1-8-07 thru 7-6-07; EDD 2-2007, f. 6-15-07, cert. ef. 7-1-07

123-065-1557

Orders of Designation

Pursuant to OAR 123-065-1553:

(1) The Director shall issue an order designating the enterprise zone or zones.

(2) The Director's order of designation shall acknowledge:

(a) The particular statutory basis for the designation;

(b) The basic features of the new enterprise zone, such as its Sponsoring Government(s) and supporting documentation describing the zone's area;

(d) If applicable, that the new zone is the continuation of a Preexisting Enterprise Zone; and

(e) That the new enterprise zone shall exempt qualified property of hotels, motels and destination resorts, as allowed under ORS 285C.070, and any other similarly special status.

(3) An order of designation shall typically set the effective date of designation on the date when the order is actually done, but it may be made effective at a reasonable time later or earlier, including but not limited to the following cases:

(a) Designation of any zone available under ORS 285C.250(1) to replace a zone Terminated by Statute shall take effect on July 1.

(b) For a zone available under another provision, the effective designation date may be made earlier to accommodate qualification of an investment in qualified property by an eligible business firm in the newly designated zone, with the following provisos:

(A) The effective date may not be earlier than when the formal application for designation was first received from the Applicant;

(B) Nothing by the Department in such regards shall be construed as ensuring any benefit for the firm, including but not limited to exemption on taxable property under ORS 285C.175;

(C) The investment must be clearly indicated in the application for designation, as a consideration for designation of the proposed enterprise zone;

(D) The merit of this investment shall be given consideration by the Department and Director only as commensurate with that given to any other prospective investment contained in competing applications; and

(E) The firm still needs to have applied for authorization under ORS 285C.140 before beginning physical work on the investment, but approval of the authorization application shall wait until the zone is designated, if that actually happens.

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.055, 285C.060, 285C.070, 285C.075 & 285C.250
Hist.: EDD 1-2005, f. & cert. ef. 2-25-05

123-065-1560

Competitive Criteria: Economic Hardship and Betterment

The following criteria measure the economic hardship of the proposed enterprise zone, and a response to one of the following sections is required by OAR 123-065-1510(1) or (2), but additional responses may be made at the Applicant's discretion by the deadline in OAR 123-065-1550(1):

(1) Ten points shall be awarded for every percent that the average/median per capita or per household income of the zone is below the equivalent statewide income.

(2) One point for every Basis Point by which the zone's unemployment rate exceeds the statewide rate.

(3) Four points shall be awarded for every 10 Basis Points by which the zone's percentage of persons or households below the poverty level exceeds the equivalent statewide percentage.

(4) Four points shall be awarded for every 30 Basis Points by which the baseline population growth of the state during the most recent ten-year period exceeds the change in the Enterprise Zone Population over the same ten-year period.

(5) Sixty points shall be awarded for each distressed area (as described in division 024 of this chapter of administrative rules) that either is a Sponsoring Government, or is entirely contained within the boundary of the proposed zone.

(6) Points may be awarded at the discretion of the Department for:

(a) Other economic statistics or circumstances, such as local closures and job losses or special studies of overall economic conditions, as presented and documented by the Applicant; or

(b) If the Department finds that designation of the proposed zone is likely to contribute significantly to opportunities for growth in an economically lagging region of the state.

Stat. Auth.: ORS 285A.075, 285C.060(1), 285C.065(3) & 285C.250(4)
Stats. Implemented: ORS 285A.095, 285C.055, 285C.075, 285C.090 & 285C.250
Hist.: EDD 4-1994, f. & cert. ef. 2-24-94; EDD 10-1995, f. & cert. ef. 12-1-95; EDD 1-1997, f. & cert. ef. 1-7-97, Renumbered from 123-065-0040; EDD 1-1999, f. & cert. ef. 1-26-99; EDD 9-2000, f. & cert. ef. 5-2-00; EDD 1-2005, f. & cert. ef. 2-25-05

123-065-1570

Competitive Criteria: Successful and Sound Development

The following criteria evaluate the proposed enterprise zone's potential to induce additional investment by eligible business firms and thereby stimulate local economic opportunity through new jobs, wealth and business diversity, and to otherwise integrate the enterprise zone into efforts to create and sustain a healthy community. Responses may be made at the Applicant's discretion and may consolidate two or more of the following criteria:

(1) Available or planned education and training opportunities, as well as career/personal counseling, job placement or similar services, for eligible employers and employees that:

(a) Could influence eligible business firms to locate, start up, expand or remain in the proposed enterprise zone; or

(b) Are capable of enhancing skill levels, productivity and earnings for the eligible employers and employees located in the proposed enterprise zone.

(2) History of economic and community development activities on the part of the Applicant or other jurisdictions and groups that would play an active role in promoting the proposed enterprise zone (maximum 150 points). For Preexisting Enterprise Zones:

(a) One point shall be awarded under this section for each of the first 150 jobs created by qualified business firms within the terminated or terminating zone since its most recent designation; and

(b) The Department shall determine the most recent figures for the jobs created and associated with such a zone based on information reported by the county assessor under ORS 285C.130, subject to revision through communications of the Department with qualified business firms or the assessor. (This subsection relieves a relevant Applicant of having to report job figures in its enterprise zone application)

(3) Recent or planned improvements in the availability, capacity or efficiency of public infrastructure that generally facilitate business development in the proposed zone.

(4) Proposed package of local incentives as described in OAR 123-065-0240, such that:

(a) Elements of local incentives adopted within one year prior to the application deadline may be included in this package; and

(b) Applicants shall consider and comment on the fiscal or other impact to all relevant governmental entities of proposed reductions in direct service fees.

(5) A plan for marketing the proposed enterprise zone or the local area with respect to the expansion, retention, start-up or recruitment of eligible business firms.

(6) A Strategic Plan or similar efforts applicable to the proposed enterprise zone, in terms of local analyses, objectives, actions and anticipated results consistent with OAR 123-065-1650.

(7) General supply of land that is useable for eligible business firms in general, including but not limited to sites ready for rapid development or redevelopment inside the proposed enterprise zone consistent with OAR 123-065-1670.

Stat. Auth.: ORS 285A.075, 285C.060(1), 285C.065(3) & 285C.250(4)
Stats. Implemented: ORS 285B.283, 285C.055, 285C.060, 285C.065, 285C.075 & 285C.250
Hist.: EDD 1-1997, f. & cert. ef. 1-7-97; EDD 1-1999, f. & cert. ef. 1-26-99; EDD 1-2005, f. & cert. ef. 2-25-05

123-065-1580

Competitive Criteria: Immediate Investment Prospects

The following criteria assess the immediate investment prospects within the proposed enterprise zone by eligible business firms considering a location or an expansion in employment within the zone. Responses may be made at the discretion of the Applicant and such firms:

(1) Such immediate prospects must be offered by eligible business firms, as defined under ORS 285C.135, on investments reasonably expected to qualify within the proposed enterprise zone no later than January 1 following the second full calendar year after the zone is to be designated.

(2) Evidence of such prospects shall take the form of:

(a) An approved authorization application;

(b) A list of authorized business firms prepared by the Applicant; or

(c) A letter from an executive officer of the eligible business firm on its letterhead to the Director or designee, stating:

(A) That the enterprise zone designation weighs crucially in the firm's decision to locate or expand;

(B) Any specific sites that the firm is considering for its investment;

(C) The estimated number of new employees to be hired within the zone by the time that the firm's investment will qualify for the enterprise zone exemption; and

(D) The estimated cost of the investment in qualified property as defined under ORS 285C.180.

(3) One point shall be awarded for each new employee to be hired by such a prospect.

(4) Three points shall be awarded for each $1,000,000 to be invested in qualified property by such a prospect.

(5) Relevant evidence for section (2) of this rule must be received by the Department within 30 calendar days of the application deadline specified in OAR 123-065-1550(1).

(6) An eligible business firm may submit only one letter as described in subsection (2)(c) of this rule for each Round of Designation. If the firm submits two or more letters no points shall be awarded, but a letter may be withdrawn and replaced with a new letter, that is received by the Department within the time limit set out in section (5) of this rule.

(7) The Department shall award only 1/3 of the usual points as described in section (3) and (4) of this rule for an immediate investment prospect that plans to locate on a site inside an enterprise zone that terminated within three years prior to the application deadline or on a site within five miles of a current enterprise zone, unless the Applicant or the eligible business firm sufficiently justify why:

(a) The prospective investment cannot now qualify under ORS 285C.245(1) or any other provision of ORS 285C.050 to 285C.250, including allowances for changes in an existing enterprise zone boundary; or

(b) The designation of the enterprise zone is nevertheless indispensable to the firm's investment.

(8) If a final investment decision is made by the eligible business firm prior to the designation of the enterprise zone by the Director, no points shall be awarded for that investment. Evidence of such a decision includes but is not limited to a public announcement or action by the firm.

(9) The Department reserves the right to seek information on the creditworthiness and business credibility of the eligible business firm before awarding points under this section.

Stat. Auth.: ORS 285A.075, 285C.060(1), 285C.065(3) & 285C.250(4)
Stats. Implemented: ORS 285C.055, 285C.060, 285C.065 & 285C.250
Hist.: EDD 1-1997, f. & cert. ef. 1-7-97; EDD 1-1999, f. & cert. ef. 1-26-99; EDD 1-2005, f. & cert. ef. 2-25-05

123-065-1590

Competitive Criteria: Miscellaneous

The following criteria relate to how well the proposed enterprise zone will operate and achieve the economic development goals of the state as a whole. Responses may be made at the Applicant's discretion and may consolidate two or more criteria:

(1) A plan for managing the proposed zone, including but not limited to the appointment of a local enterprise zone manager or co-managers through provisions in the application or approved actions by the Sponsoring Governments.

(2) Existing or proposed arrangements for coordinating actions among the Sponsoring Governments, county assessor and other key participants in the proposed zone, including but not limited to the creation or naming of a Zone Association empowered and constituted by resolutions/agreement among the Sponsoring Governments.

(3) Evidence of broad-based public awareness or support for the proposed zone by the local community, including but not limited to:

(a) A record of formal public discussion and involvement in the decisions to make application and to define the area for the zone; and

(b) Resolutions or letters of support for the zone from local organizations, institutions or property tax districts received by the Department within 30 calendar days of the application deadline specified in OAR 123-065-1550(1).

(4) For a proposed urban enterprise zone, the absence within the metropolitan statistical area of any other urban zone that will not be Terminated by Statute before the zone is designated (maximum of 150 points).

(5) The distance between a proposed rural enterprise zone and the nearest current enterprise zone that will not be Terminated by Statute before the zone is designated (2.5 points for every mile of the shortest distance over paved roadways, up to a maximum of 250 points).

(6) Number of cities, ports or counties participating in the proposed zone (40 points for each Sponsoring Government in excess of two).

(7) The results of consultations with local taxing districts under ORS 285C.067.

Stat. Auth.: ORS 285A.075, 285C.060(1), 285C.065(3), 285C.067(2) & 285C.250(4)
Stats. Implemented: ORS 285C.055, 285C.067, 285C.075, 285C.105 & 285C.250
Hist.: EDD 1-1997, f. & cert. ef. 1-7-97; EDD 1-1999, f. & cert. ef. 1-26-99; EDD 9-2000, f. & cert. ef. 5-2-00; EDD 1-2005, f. & cert. ef. 2-25-05; EDD 1-2007(Temp), f. & cert. ef. 1-8-07 thru 7-6-07; EDD 2-2007, f. 6-15-07, cert. ef. 7-1-07

Economic and Strategic Information in Local Applications

123-065-1600

Definitions

In addition to terms defined in OAR 123-065-0000 and 123-065-1500, the following definitions apply to OAR 123-065-1600 to 123-065-1699:

(1) "Magnet Enterprise Zone" means a rural enterprise zone that has:

(a) A Sponsoring Government that is the most populous city of the county or counties in which the zone is located; and

(b) An Enterprise Zone Population equal to or greater than 25 percent of the population of the county or one of the counties in which the zone is located.

(2) "Population" as used in ORS 285C.090 means the number of inhabitants as determined by the most recently available data from the federal Bureau of Census or the Center for Population Research and Census (CPRC) at Portland State University.

(3) "Poverty level" as used in ORS 285C.090 is as defined by the U.S. Bureau of Labor Statistics of the U.S. Department of Labor.

(4) "Regional academic institution" as used in ORS 285C.090 means a nonprofit or not-for-profit center or institute that is engaged in demographic, economic, social or related studies and is associated with an accredited college or university, including but not limited to extension services offices.

(5) "Target Community" means an extensive residential area or group of such areas that:

(a) Is proximate to the proposed enterprise zone boundary;

(b) Dominates much of the proposed zone's immediate vicinity; and

(c) Encompasses the populace that the proposed zone is intended by the Applicant to help through employment opportunities or through relevant public or private activities that would make the Target Community economically stronger and more vital.

Stat. Auth.: ORS 285A.075, 285C.060(1), 285C.065(3) & 285C.250(4)
Stats. Implemented: ORS 285C.065, 285C.075, 285C.090 & 285C.250
Hist.: EDD 1-1997, f. & cert. ef. 1-7-97; EDD 1-1999, f. & cert. ef. 1-26-99; EDD 1-2005, f. & cert. ef. 2-25-05; EDD 1-2007(Temp), f. & cert. ef. 1-8-07 thru 7-6-07; EDD 2-2007, f. 6-15-07, cert. ef. 7-1-07

123-065-1610

Sources of Statistical Measures

Data submitted pursuant to OAR 123-065-1510 and 123-065-1560, as part of an application for designation of an enterprise zone, shall adhere to the following guidelines, unless otherwise stipulated by the Department in its application form:

(1) Statistical measures must be based on annual data (not monthly or quarterly values) from an official source such as:

(a) The federal decennial census;

(b) Other federal agencies or sources;

(d) Center for Population Research and Census (CPRC) at Portland State University;

(e) Regional academic institutions;

(f) Regional service centers or databases, which may include or be obtained from local planning offices, Council of Governments, or public, people's or municipal utilities;

(g) Special studies contracted with and performed by any of the above; or

(h) Published, official or peer-reviewed documents, reports or resources.

(2) No matter what source of data is chosen by an Applicant, the most recently available data from that particular source must be used.

(3) For any given statistical comparison, data for the proposed enterprise zone and data for the state must be of the same origin and cover the same year or years.

(4) In the application the Applicant shall:

(a) Cite sources of data;

(b) Provide bibliographic details; and

(A) Inserts worksheets or analyses, as applicable;

(B) Includes a copy of any special report that is used or referenced in the application; or

(C) Inserts photocopies of the title page and any relevant sections, charts or tables from an official source document, as applicable. (Properly labeled tables that consolidate isolated data from various pages of the same document may be substituted for copies of those pages)

(5) Nothing in this rule is meant to restrict an Applicant's ability to employ private, for-profit consultants, except that all analyses, estimates or conclusions by such consultants must be independently and plainly corroborated through official data.

Stat. Auth.: ORS 285A.075, 285C.060(1), 285C.065(3) & 285C.250(4)
Stats. Implemented: ORS 285C.065, 285C.075, 285C.090 & 285C.250
Hist.: EDD 10-1995, f. & cert. ef. 12-19-95; EDD 1-1997, f. & cert. ef. 1-7-97, Renumbered from 123-065-0070; EDD 1-1999, f. & cert. ef. 1-26-99; EDD 1-2005, f. & cert. ef. 2-25-05

123-065-1620

Correlation with Proposed Zone

For purposes of OAR 123-065-1510, 123-065-1560 and 123-065-1610:

(1) The Applicant of any proposed enterprise zone that is located entirely within a metropolitan statistical area may use equivalent data for the metropolitan statistical area instead of statewide data, regardless of whether the equivalent data represents only the in-state portion of the metropolitan statistical area.

(2) Unless otherwise stipulated, economic measures and statistics for a proposed enterprise zone may rely entirely on:

(a) Zone-specific data averaged/weighted by the population of (for example) respective Census Statistical Units that approximate economic conditions within the proposed boundaries and the immediate vicinity of the zone;

(b) Citywide data averaged/weighted by city population, but only if no less than 75 percent of the inhabitants residing within the proposed boundaries of the zone also reside inside the incorporated area of the same city or cities;

(d) Metropolitan statistical area data, but only for a proposed urban zone.

(3) An Applicant proposing an enterprise zone designation may exercise the following latitude in developing zone-specific economic measures based on or derived from published income, employment, population and other data for Census Statistical Units:

(a) The Applicant may use special studies or documented analyses to estimate or infer the actual population, employment or income levels for the relevant parts of Census Statistical Units intersected by the proposed enterprise zone boundary;

(b) The Applicant may ignore the available data for Census Statistical Units intersected by the proposed enterprise zone boundary, if no more than 25 percent of the inhabitants inside the zone boundary also reside within all ignored Census Statistical Units;

(c) The Applicant must utilize the available data for Census Statistical Units intersected by the proposed enterprise zone boundary, if 75 percent or more of the inhabitants in any utilized Census Statistical Unit also reside within the zone boundary; and

(d) Notwithstanding the specific parameters of subsections (b) and (c) of this section, the Applicant for designation of a proposed urban enterprise zone may use a Target Community that the Applicant identifies and demonstrates as conforming with OAR 123-065-1600(5) to the satisfaction of the Department (not applicable to rural zones).

123-065-1650

Strategic Planning

The Strategic Plan for purposes of OAR 123-065-1570(6) will be evaluated on its relevancy to the proposed enterprise zone and in terms of how completely and effectively it contains, addresses or utilizes the following:

(1) Coordinated economic, human, community and physical development for the zone, local area or region based on goals and a strategic vision for change, arising from a broad-based consensus among local entities and people of various backgrounds.

(2) Involvement of local stakeholders and community institutions from the public, private and nonprofit sectors as full partners in developing and implementing this Strategic Plan, including but not limited to:

(a) Arrangements by the Sponsoring Governments with other local governments throughout a region of this state or with part of a neighboring state;

(b) Partnership roles with state and federal agencies responsible for land use, transportation, human services, housing, environmental protection and so forth; or

(3) Assessments of community and regional circumstances, as well as analyses that identify how to capitalize on:

(a) Local and regional trends, challenges, strengths, opportunities and so forth;

(b) Other elements of this Strategic Plan, in particular the use of measurable outcomes and accountability for sections (9) and (10) of this rule; and

(c) Any type of attribute or resource (whether tangible and intangible) that is capable of enhancing development (for example, infrastructure, other economic incentives, human capital, past successes, desirable quality of life or renowned attractions).

(4) Funding or financing requested or received from any institution or governmental program, especially insofar as such financial resources will be innovatively and effectively integrated with other public or private investments, to support development in the proposed zone.

(5) Linkages to other elements of the application for designation of the proposed zone as described in OAR 123-065-1570 and 123-065-1590.

(6) Efforts aimed at furthering a favorable business climate, an active and involved private sector, locally created enterprises, expansion of existing commerce and industry, or local gains from international trade.

(7) Strategies, programs and projects to improve such matters as local public safety or social support systems for helping individuals and families to overcome personal problems and dependencies that restrict their ability to seize the economic opportunities envisioned by this Strategic Plan or the proposed enterprise zone, or to contribute fully to their local community, over the near and long term.

(8) Strategies, municipal programs for capital improvement, comprehensive land use plans or designations, and so forth, designed to achieve sustainable, high-quality development, and to strengthen the local economy by improving environmental conditions, including but not limited to the redevelopment of potentially contaminated land.

(9) Method or methods for measuring the success of this Strategic Plan, such as benchmarks, performance indicators or statistical techniques, including but not limited to favorable changes in the social or economic data used for OAR 123-065-1560.

(10) An action plan or plans that describe immediate and progressively longer-term programs, activities, projects and so forth, along with a schedule:

(a) For achieving specified results or objectives for particular elements or for this overall Strategic Plan; and

(b) For reviewing the progress toward such results and objectives and for adjusting the Strategic Plan, as appropriate, within the original framework of consensus and partnership.

Stat. Auth.: ORS 285A.075, 285C.060(1), 285C.065(3) & 285C.250(4)
Stats. Implemented: ORS 285C.065, 285C.075, 285C.105 & 285C.250
Hist.: EDD 1-1999, f. & cert. ef.1-26-99; EDD 1-2005, f. & cert. ef. 2-25-05

123-065-1670

Project-Ready Land

OAR 123-065-1510(3), 123-065-1530(4)(b) and 123-065-1570(7) relate to sites for manufacturing and other activities inside the enterprise zone that are essentially ready for development or redevelopment, or that would be, not more than generally six months after an eligible business firm determines to undertake operations at that location, such that:

(1) Any development delay of up to 180 days is:

(a) Subject to rather low probability of further complications or barriers; and

(b) Quantifiable in terms total cost, schedule and other factors affecting final resolution.

(2) Relevant sites shall largely conform to what is necessary for certification according to the process established by the Department under ORS 284.565, but they do not need to be actually certified or to completely satisfy all such criteria.

(3) Consistent with section (2) of this rule, these sites or land parcels shall be:

(a) Available for acquisition at a reasonable price without any significant encumbrance, such as liens, easements or any large, unusable existing structure;

(b) At least 5 acres in size or larger depending on expected uses/development types;

(d) Completely outside the 100-year floodplain;

(e) Zoned outright for expressively permitted uses corresponding to eligible enterprise zone operations, under clear zoning ordinances, consistent with an acknowledged comprehensive plan, and preferably inside an urban growth or unincorporated community boundary;

(f) Suitably surveyed or assessed for protected environmental and cultural resources (contaminants, wetland, species, archaeological sites and historic structures), and documented as free of major impediments arising from such protections; and

(g) Relative to permitted uses and expected business development/operations, effectively:

(A) Accessible in terms of site egress/ingress, as well as local infrastructure, traffic capacity and routes to and onto nearby, major highways; and

(B) Served by on-site connections to systems with sufficient excess capacity for drinking water, sanitary sewage and electric power.

(4) In addition to the enterprise zone map identifying relevant sites, proper evidence or materials about these sites may include but are not limited to:

(a) Copy of a letter of industrial site certification from the Director;

(b) Filled-out application for industrial site certification, with attached copies of key/sample portions from associated documentation;

(c) Letters or testimonials from the property owner, qualified engineering, scientific or archaeological professionals, utility providers, or local/state government officials;

(d) Real estate listing or advertisement;

(e) Copy of recent report by a certified appraiser and title company;

(f) Copy of cover page/executive summary from timely environmental/cultural assessment report by a qualified professional/consulting firm; and

(g) Intelligible and authoritative aerial photography and maps that:

(A) Highlight the site(s) in question and offer local context and orientation for the reader; and

(B) Relate authoritative data about/from the following: Flood plain, topography, geology, ALTA survey, wetlands delineation, existing on-site improvements, land-use zoning, site access, local transportation routes/patterns, and so forth.

(5) The Department may relax its treatment of any stipulation described in this rule for a site that exhibits other offsetting attributes that significantly contribute to the readiness or attractiveness of the site for development by traded-sector industries.

Stat. Auth.: ORS 285A.075, 285C.060(1), 285C.065(3) & 285C.250(4)
Stats. Implemented: ORS 284.565, 285B.283, 285B.286, 285C.055, 285C.060, 285C.065, 285C.075, 285C.105 & 285C.250
Hist.: EDD 1-2005, f. & cert. ef. 2-25-05

Federal Enterprise Zones

123-065-1700

Purpose and Scope

OAR 123-065-1700 to 123-065-1799 are intended to address the way in which the Department and the enterprise zones under ORS 285C.050 to 285C.250 relate to Federal Enterprise Zones for purposes of ORS 285C.085.

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.085
Hist.: EDD 14-1999, f. 10-22-99, cert. ef. 10-23-99; EDD 1-2005, f. & cert. ef. 2-25-05

123-065-1710

Definitions

For purposes of this division of administrative rules:

(1) As used in ORS 285C.085(4)(b), "all areas within both the federal enterprise zone and the city, county or port are included in a state enterprise zone" means that the state enterprise zone will need to encompass all of the Federal Enterprise Zone inside territory of any city, port or county that will sponsor the zone:

(a) Even if such area is also inside an overlapping city, port or county that neither sponsors nor consents to the zone, regardless of OAR 123-065-0010; but

(b) Not such area that overlaps with another existing state enterprise zone.

(2) "Federal Enterprise Zone" for purpose of ORS 285C.085 means any designation as defined under ORS 285C.050(9) by an agency of the federal government, provided that it is:

(a) Not terminated;

(b) Located at least partially in this state;

(c) Delimited by formal boundaries and an established period of existence of at least five years from the time of the federal designation;

(d) Intended at least in part to create or improve economic opportunities and development within the local community;

(e) Provided for by federal law that includes congressionally authorized benefits for purposes of subsection (d) of this section;

(f) Qualified based on federal guidelines, including but not limited to criteria for a level of economic hardship, generally comparable to that indicated under ORS 285C.090; and

(g) Subject to a significant degree of national selectivity and uniqueness, in relation to subsection (f) of this section, such that having more than five of any designation type awarded to this state would be highly unlikely, as an example.

(3) For purposes of its "lead agency" role for a "federal enterprise zone program" under ORS 285C.085(1), the Department may delegate responsibility to and coordinate with other state agencies in undertaking official activities for application, designation or operation of a Federal Enterprise Zone or benefits exclusive to the designation, as appropriate or required under state policies or federal guidelines.

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.050 & 285C.085
Hist.: EDD 5-1999(Temp), f. & cert. ef. 8-20-99 thru 10-23-99; EDD 14-1999, f. 10-22-99, cert. ef. 10-23-99; EDD 1-2005, f. & cert. ef. 2-25-05; EDD 1-2007(Temp), f. & cert. ef. 1-8-07 thru 7-6-07; EDD 2-2007, f. 6-15-07, cert. ef. 7-1-07

123-065-1720

Designation Based on Federal Enterprise Zone Status

For purposes of a local request for designation of an enterprise zone under ORS 285C.085(2):

(1) City, port or county governments may apply (in a manner generally consistent with the provisions of OAR 123-065-1520 to 123-065-1540) for designation of a zone corresponding to the boundary of a single Federal Enterprise Zone located in the government's territory, such that:

(a) Application may occur at any time without regard to deadlines, a Round of Designation or an application form;

(b) Besides a map and legal description of the proposed enterprise zone, the application must document the Federal Enterprise Zone's official existence, location and satisfaction of OAR 123-065-1710(2), except to the extent that the Department is already fully aware of such satisfaction;

(d) The governments must engage in timely communication in accordance OAR 123-065-1050 and are encouraged to pursue further consultation with local taxing districts;

(e) Any cosponsor of a zone terminated by order of the Director under ORS 285C.245(4) or (5) is not excluded from applying;

(f) Application may include a request by a city or county for hotels, motels or destination resorts to be eligible business firms in the zone under ORS 285C.070;

(g) Proposals by a cosponsor for local incentives shall not be binding; and

(h) The designation may not serve as the re-designation of a Preexisting Enterprise Zone.

(2) The designation of the zone may be made without regard to any limitation on the:

(a) Number or location of enterprise zones as authorized by state law; or

(b) Size or dimensions of an enterprise zone as described in OAR 123-065-0080 and 123-065-0090.

(3) The zone must still conform to the requirements for:

(a) Being either urban or rural as described in OAR 123-065-0100, except for a special waiver and determination, at the Director's discretion, as to the more suitable categorization; and

(b) Inclusion of all area in each cosponsor that is inside the Federal Enterprise Zone as described in OAR 123-065-1710(1).

(4) The Director's order of designation shall essentially follow OAR 123-065-1557.

(5) A cosponsor of an existing enterprise zone may not seek designation of another zone as described in this rule, whenever:

(a) The Federal Enterprise Zone overlaps with a portion of the existing enterprise zone; or

(b) The cosponsor is a city with less than 100,000 in population.

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.050, 285C.080, 285C.085 & 285C.090
Hist.: EDD 5-1999(Temp), f. & cert. ef. 8-20-99 thru 10-23-99; EDD 14-1999, f. 10-22-99, cert. ef. 10-23-99; EDD 1-2005, f. & cert. ef. 2-25-05; EDD 1-2007(Temp), f. & cert. ef. 1-8-07 thru 7-6-07; EDD 2-2007, f. 6-15-07, cert. ef. 7-1-07

123-065-1730

Boundary Change to Incorporate a Federal Enterprise Zone

For purposes of a local request to change the boundary of an existing enterprise zone under ORS 285C.085(3):

(1) The request for the boundary change shall be treated like any such request under ORS 285C.115 consistent with OAR 123-065-0300 to 123-065-0399, except for equivalent allowances and exceptions as described in OAR 123-065-1720.

(2) Such a boundary change may add an area to the existing zone, only if the area is located in a county in which the zone is already located or in a contiguous county.

(3) Following the change in the zone boundary, the existing zone shall be Terminated by Statute or may be terminated by order of the Director, as normal under ORS 285C.245, irrespective of the boundary change.

(4) If the Federal Enterprise Zone is prematurely terminated by the federal government for nonperformance, violation of federal guidelines or similarly unusual circumstances, then the Director may rescind the order changing the boundary of the zone, as if that boundary change had never occurred, except that any business firm located in an area removed from the zone shall be treated consistent with the relevant provisions in statute and law for location in a terminated enterprise zone.

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.085
Hist.: EDD 14-1999, f. 10-22-99, cert. ef. 10-23-99; EDD 1-2005, f. & cert. ef. 2-25-05

123-065-1740

Further Changes to Enterprise Zones under this Subdivision

Once an enterprise zone has been designated as described in OAR 123-065-1720 or its boundary changed as in 123-065-1730, a change in the boundary of the zone may be requested and done under ORS 285C.115, as otherwise allowed by applicable provisions, with the following clarifications:

(1) If the total area of the enterprise zone equals or exceeds 12 square miles, additional areas may be included, pursuant to OAR 123-065-1730, only if those areas are located:

(a) In parts of the Federal Enterprise Zone within a city, port or county requesting to become a cosponsor of the zone with the boundary change;

(b) In new parts of the Federal Enterprise Zone, as amended by authority of the federal government; or

(2) If the zone exceeds the maximum overall allowed distance applicable to the zone, additional areas may be included in one of the following ways:

(a) Consistent with section (1) of this rule, whenever total area of the zone will or already does equal or exceed 12 square miles;

(b) Where such areas do not increase the overall distance within the zone consistent with ORS 285C.120(1)(b) and (c); or

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.085 & 285C.115
Hist.: EDD 14-1999, f. 10-22-99, cert. ef. 10-23-99; EDD 1-2005, f. & cert. ef. 2-25-05; EDD 1-2007(Temp), f. & cert. ef. 1-8-07 thru 7-6-07; EDD 2-2007, f. 6-15-07, cert. ef. 7-1-07

123-065-1750

Termination of Enterprise Zones Designated under this Subdivision

For an enterprise zone designated as described in OAR 123-065-1720:

(1) The zone is Terminated by Statute as normal under ORS 285C.245(2), subsequent to the effective date of designation by order of the Director, regardless of any intervening termination of the Federal Enterprise Zone due to programmed operation under federal statutes or repeal of the operative federal law.

(2) The zone may terminate prematurely for the reasons indicated under ORS 285C.245(3).

(3) With respect to termination as described in either section (1) or (2) of this rule, an enterprise zone shall or may, respectively, be designated under ORS 285C.250 to replace the terminated zone, subject to all the regular provisions for a new zone.

(4) In addition, the zone may also be terminated by order of the Director under ORS 285C.085(5), if the federal government prematurely terminates the Federal Enterprise Zone for nonperformance, violation of federal guidelines or similarly unusual circumstances. In this case, there is no provision for a replacement designation under ORS 285C.250, and the Director shall effectively rescind the order designating the zone, as if it had never existed, except that any business firm located in the zone shall be treated consistent with the relevant provisions in statute and law for location in a terminated enterprise zone.

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.085 & 285C.245
Hist.: EDD 14-1999, f. 10-22-99, cert. ef. 10-23-99; EDD 1-2005, f. & cert. ef. 2-25-05

Terminations of Enterprise Zones

123-065-1900

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 eleven tax years after its designation.

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.245 & 285C.250
Hist.: EDD 3-1996, f. & cert. ef. 4-2-96; EDD 5-1998, f. 3-12-98, cert. ef. 3-15-98; Renumbered to 123-065-1900, EDD 1-2005, f. & cert. ef 2-25-05

123-065-1910

After Termination of the Zone

Following the termination of an enterprise zone:

(1) 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.

(2) 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.

(3) Within six months following the termination of the enterprise zone, the sponsor of the terminated zone and the county assessor shall jointly submit to the Department of Revenue, the Department and the contact agency for first-source hiring agreements, a complete list of:

(a) The names of all business firms authorized or qualified in the zone at the time of termination and located outside of any currently designated enterprise zone;

(b) The dates on which each authorization application was submitted and finally approved;

(d) The status of each investment or exemption of the authorized or qualified business firm (for example, "under construction").

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.105, 285C.130, 285C.140 & 285C.245
Hist.: EDD 3-1996, f. & cert. ef. 4-2-96; EDD 5-1998, f. 3-12-98, cert. ef. 3-15-98; EDD 9-2000, f. & cert. ef. 5-2-00; Renumbered to 123-065-1910, EDD 1-2005, f. & cert. ef 2-25-05

123-065-1920

Early Termination of an Unused Zone

Under ORS 285C.245(6), an enterprise zone terminates (in a manner comparable to one Terminated by Statute) if no eligible business firm has effectively used the zone after at least six full years, such that:

(1) The Director shall order the termination effective on December 31 that occurs six years after the December 31 that was or that immediately followed the effective date of the zone's designation.

(2) This rule does not apply if the Department determines that on or before the relevant December-31 date, a business firm qualified in that zone for an exemption under ORS 285C.175.

(3) If the Department finds that during the sixth calendar year of the zone's existence, an actively authorized business firm has placed qualified property in service, termination per this rule shall be treated as provisional and shall be rescinded and reversed when the firm successfully claims the exemption.

(4) Termination of an enterprise zone as described in this rule does not preclude the sponsor or any cosponsor of the zone from applying for designation of another enterprise zone, though not as a Preexisting Enterprise Zone.

(5) This rule has no bearing on:

(a) A reservation enterprise zone; or

(b) Any enterprise zone for which the date of designation preceded January 1, 2004.

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.245 & 285C.250
Hist.: EDD 1-2005, f. & cert. ef. 2-25-05

Additional and Reasonable Requirements of Local Sponsor

123-065-2500

Purpose and Scope

OAR 123-065-2500 to 123-065-2599 are intended to provide guidance and parameters applicable to any situation provided by law, under which the local government or governments that sponsor an enterprise zone may (jointly) impose additional requirements on a business firm that is receiving tax benefits associated with an investment in the enterprise zone.

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.105, 285C.150, 285C.155, 285C.160 & 285C.403
Hist.: EDD 9-2000, f. & cert.. ef. 5-2-00; EDD 1-2005, f. & cert. ef. 2-25-05

123-065-2510

Applicable Situations

OAR 123-065-2500 to 123-065-2599 shall govern the following situations of locally imposed requirements in an enterprise zone:

(1) The written agreement with the zone sponsor for the long-term rural tax incentives, under ORS 285C.403(3)(c).

(2) Whenever the three- to five-year property tax exemption entails any of the following:

(a) A written agreement for the extended abatement for an exemption period of four or five consecutive years in total under ORS 285C.160;

(b) Adoption of a resolution or resolutions by the zone sponsor waiving the usual requirement of an increase in employment in the zone, under ORS 285C.155 and 285C.200(2); or

(c) Policy and standards adopted by the sponsor of an urban enterprise zone under ORS 285C.150, for which further specification is found in OAR 123-065-0230 for such local conditions.

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.105, 285C.150, 285C.155, 285C.160 & 285C.403
Hist.: EDD 9-2000, f. & cert.. ef. 5-2-00; EDD 1-2005, f. & cert. ef. 2-25-05

123-065-2520

Basic Parameters

For purposes of local, additional requirements imposed by an enterprise zone sponsor:

(1) They shall apply to a qualified business firm only:

(a) With respect to operations inside (or nearby and affected by operations in) the enterprise zone; and

(b) Between the time when:

(A) The firm receives authorization (certification in the case of the long-term rural tax incentives); and

(B) The overall enterprise zone exemption period expires on June 30. For example, however, a sponsor may require through contractual agreement, as otherwise permissible by law, that if the business firm later shuts down its eligible operations in the zone, it would be obligated to pay the sponsor an amount equal to some of the tax benefit that the firm had earlier received; this amount might reasonably relate to how soon after expiration of the exemption permanent stoppage of zone operations occurred.

(2) Notwithstanding section (1) of this rule, the zone sponsor and the business firm may mutually agree, subject to possibly certain contingencies, to automatically apply current requirements or provisions of an agreement to identified future situations described in OAR 123-065-2510.

(3) They shall not require that the eligible business firm's hiring, recruitment, promotion, training, compensation or treatment of its actual or potential employees, suppliers, contractors or customers be based on:

(a) Those persons' or businesses' residency or geographic location, consistent with OP-8236, Oregon Attorney General (April 20, 1995); or

(b) Other legally impermissible criteria.

(4) The zone sponsor may offer multiple options from which the eligible business firm freely selects, so long as:

(a) Each optional requirement conforms with OAR 123-065-2500 to 123-065-2599; and

(b) The firm's selection, and thus what the firm is required to satisfy or not satisfy among the options, is specified in the agreement between the firm and the zone sponsor, in resolutions or in other applicable documentation.

(5) Failure by a qualified business firm to satisfy an additional requirement need not result in disqualification or loss of the tax benefits or the exemption on property, if as specifically allowed:

(a) The firm's continuing qualification does not depend on compliance with that requirement; or

(b) The firm may fulfill an alternative requirement to avoid disqualification. (An alternative requirement shall not preclude the firm's disqualification, if the firm later fails to adequately fulfill the alternative requirement or any other requirement)

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.105, 285C.150, 285C.155, 285C.160 & 285C.403
Hist.: EDD 9-2000, f. & cert.. ef. 5-2-00; EDD 1-2005, f. & cert. ef. 2-25-05; EDD 1-2007(Temp), f. & cert. ef. 1-8-07 thru 7-6-07; EDD 2-2007, f. 6-15-07, cert. ef. 7-1-07

123-065-2530

Additional to Statutory Provisions

Requirements imposed on a business firm by an enterprise zone sponsor are in addition to what is provided under applicable statutes or state laws, and shall neither alter nor undermine their effect or intent, such that:

(1) With respect to the following, as established by relevant state provisions, the requirements may in no way:

(a) Affect the basic eligibility or ineligibility of certain business activities or uses of relevant property;

(b) Modify any specified minimum level of investment by the firm; or

(A) Other forms of financial remuneration by the firm are possible; and

(B) The sponsor shall set the total period of tax benefit as provided by the relevant law or statute.

(2) The requirements may neither modify nor in any way effectively decrease or increase the stringency of state requirements for hiring, general employment levels or average pay/compensation associated with jobs or persons employed by the firm, and they shall not even address such issues, except for local requirements that:

(a) Govern employees not affected or covered by the relevant state requirement (for example, construction or temporary workers, or employee remuneration in a Portland-area urban zone);

(b) Set an alternative employment level under ORS 285C.155;

(c) Specify extra demands within the context of a first-source hiring agreement that the firm is otherwise required to enter into; or

(d) Obligate the firm in a reasonable manner with respect to the following: workforce development, hiring/retention from certain sources or groups, the general nature of benefits, or other employment-related matters categorically different from actual requirements under ORS 285C.050 to 285C.250 or 285C.412.

123-065-2540

Reasonableness

This rule offers the following guidance and general criteria, which are not exhaustive, for evaluating whether local additional enterprise zone requirements are reasonable:

(1) The requirements may not vary dramatically or erratically over time for business firms interested in investing in the zone and seeking special benefits or waivers.

(2) The requirements may not be arbitrarily applied, implemented or enforced, in that the sponsor shall be consistent not only in setting conditions, but also in how any compliance issue is handled.

(3) The requirements may be differentiated among relevant business firms, for a given situation as described in OAR 123-065-2510, in terms of investment size, the firm's industry and so forth, but such differentiation must be:

(a) Based on definable characteristics;

(b) Consistently used; and

(4) The requirements may entail economic costs to the firm as a result of payments to the sponsor or other entities, or of actions undertaken by the firm, but these costs (less any other consequent benefit to the firm) shall not effectively undermine the tax benefit for the eligible business firm, in that:

(a) Based on equivalent present-value estimations, these costs shall not exceed one-third of the tax savings associated with the property tax abatement.

(b) With a written agreement in the case of OAR 123-065-2510(1) or (2)(a) the firm may accept higher costs based on its own considerations.

(5) The requirements may not demand procedures, practices or investments in excess of anything undertaken in the firm's industry or related industries throughout the world, such that the sponsor shall be prepared to show that such a demand has been accomplished in the normal course of business elsewhere without apparent, extenuating circumstances.

(6) No requirement may cause or compel actions by the firm that have the potential to pose a significant other legal, financial or business threat to the firm, such as:

(a) Surrendering significant rights, privileges or immunities under state or federal law;

(b) Labor relations that may compromise practices by the firm in other locations where it operates in the United States; or

(c) The release of information that is proprietary, confidential or otherwise threatening to the firm's market competitiveness or contractual obligations or that of any third party.

(7) The criteria in this rule relate to a zone sponsor's underlying policy, hence the recommendations in OAR 123-065-2550 for deliberate and explicit policy-making to cover certain potentialities.

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.105, 285C.150, 285C.155, 285C.160 & 285C.403
Hist.: EDD 9-2000, f. & cert.. ef. 5-2-00; EDD 1-2005, f. & cert. ef. 2-25-05

123-065-2550

Zone Sponsor Policies & Approval of Agreements

(1) In imposing or setting additional requirements on business firms, an enterprise zone sponsor shall consider a policy-making approach to maintain consistency and rationality, especially in view of the following:

(a) Constitutional and other legal protections for business firms; and

(b) General principles of fairness and clarity regarding public purposes and intent.

(2) Such a policy may apply uniformly to the situations as described in OAR 123-065-2510, or it may pertain to only certain situations

(3) Such a policy is relevant to the sponsor's basic elections in granting or refusing special benefits or waivers, as well as the additional requirements imposed or sought when granting the benefit or waiver to a business firm.

(4) Except for conditions imposed by an urban enterprise zone under ORS 285C.150, such a policy for purposes of OAR 123-065-2500 to 123-065-2599 does not need to be prospectively adopted, nor does it need to be based on formal documentation, and it may reflect the cumulative effect of the sponsor's relevant past actions. A formal, explicit and prospective policy is preferable, however, whenever the following or comparable circumstances arise:

(a) Relevant requests by business firms are common or expected to become increasingly frequent;

(b) Sponsor's basic decision to grant or refuse a special benefit or waiver, or to impose additional requirements, is differentiated in terms of business or investment size or other factors;

(c) The requirements imposed are numerous, complicated or otherwise entail various contingencies or matters of judgment suggest the need for definite standards; or

(d) The sponsor departs from a general pattern in terms of granting a special benefit or waiver or imposing certain corresponding requirements.

(5) In an urban enterprise zone that has adopted a policy under ORS 285C.150, any additional requirements imposed for other situations as described in OAR 123-065-2510(2) must:

(a) Formally relate to the policy and standards adopted by the zone sponsor; and

(b) Be in addition to and not replace any condition normally imposed by the sponsor.

(6) A city, port or county government that sponsors two or more enterprise zones is free to have different policies or seek different local additional requirements among those zones.

(7) In an enterprise zone sponsored by more than one city, port or county, the cosponsors must all jointly:

(a) Adopt the same policy, standards, established local conditions and so forth under equivalent authority or method for purposes of this rule and the enterprise zone; and

(b) Approve the same requisite written agreement.

(8) The sponsoring city, port or county governments of an enterprise zone may authorize the written agreement in the case of OAR 123-065-2510(1) or (2)(a) through a number of approaches, which may differ among the cosponsors, including but not limited to the following examples:

(a) Approval by an official empowered to enter into such an agreement under the laws, charters, ordinances and conventions of the cosponsor;

(b) Approval by the specific person or persons formally recognized to conclude such an agreement with the eligible business firm, pursuant to a previous understanding between the firm and the sponsor;

(c) A specific resolution that is approved by the governing body of the cosponsor and that sanctions a draft written agreement proposed by the eligible business firm;

(d) A specific resolution that is approved by the governing body of the cosponsor and that authorizes an agent to conclude such an agreement with the eligible business firm; or

(e) A standing policy adopted by the cosponsor that empowers a particular agent to negotiate such an agreement with all or some eligible business firms on behalf of the cosponsor (for example, the local zone manager).

Local Sponsor Funds Derived through Enterprise Zone

123-065-2700

Purpose and Scope

OAR 123-065-2700 to 123-065-2799 are intended (and are reserved) to provide special guidance as necessary for the appropriate accounting, collection and use of moneys received by the sponsor of an enterprise zone from business firms, such that:

(1) These moneys represent a special resource for an enterprise zone, but they are likely to be significant in only unusual cases.

(2) The sponsor may receive moneys for the following reasons as specified in statute or law:

(a) The authorization filing fee under ORS 285C.140(1)(c);

(b) The payback of one year's tax savings in lieu of disqualification under ORS 285C.240(6); or

(c) The distribution to the sponsor and other taxing districts of 30 percent of the corporate income or excise taxes paid by a corporation under ORS 317.131.

(3) Moneys or funds arising from local additional requirements imposed by the sponsor on a business firm, in accordance with OAR 123-065-2500 to 123-065-2599, may also be subject to these administrative rules.

(4) These administrative rules are in addition to specific guidance governing particular sources of such moneys in this division of administrative rules, including but not limited to OAR 123-065-0220, 123-065-3850 or 123-065-4950 to 123-065-4990.

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.105, 285C.140, 285C.150, 285C.155, 285C.160, 285C.240, 285C.403 & 317.131
Hist.: EDD 9-2000, f. & cert.. ef. 5-2-00; EDD 1-2005, f. & cert. ef. 2-25-05

Long-Term Rural Tax Incentive

123-065-3000

Purpose and Scope

OAR 123-065-3000 to 123-065-3999 specify the effect of provisions under ORS 285C.400 to 285C.420 and 317.124 to 317.131. As such, these administrative rules address determinations, procedures and requirements of the "up-to" 15 years of exemption from property taxes and corporate excise tax credits on a qualifying investment inside a rural enterprise zone (including but not limited to a reservation enterprise zone under ORS 285C.300 to 285C.320) in a county experiencing particular economic hardship. These administrative rules do not control fiscal parameters of actual implementation by the county assessor or the Department of Revenue, and they do not supersede administrative rules in OAR chapter 150 for any such purpose.

Stat. Auth.: ORS 285A.075
Stats. Implemented: ORS 285C.400 - 285C.420 & 317.124 - 317.131
Hist.: EDD 7-1998(Temp), f. & cert. ef. 4-30-98 thru 8-31-98; EDD 14-1998, f. 8-31-98, cert. ef. 9-1-98; EDD 15-2002(Temp), f. & cert. ef. 7-8-02 thru 1-3-03; EDD 3-2003, f. 3-20-03, cert. ef. 3-21-03; EDD 1-2005, f. & cert. ef. 2-25-05; EDD 1-2007(Temp), f. & cert. ef. 1-8-07 thru 7-6-07; EDD 2-2007, f. 6-15-07, cert. ef. 7-1-07

123-065-3030

Relationship to Rest of Division

OAR 123-065-3000 to 123-065-3999 do not affect the administrative rules elsewhere in this division that administer ORS 285C.050 to 285C.250. Unless the context or specific references demand otherwise, such other parts of this division of administrative rules likewise do not apply to OAR 123-065-3000 to 123-065-3999, aside from fundamental matters, such as the existence and attributes of an enterprise zone or the overall enterprise zone.

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.400 - 285C.420 & 317.124 - 317.131
Hist.: EDD 7-1998(Temp), f. & cert. ef. 4-30-98 thru 8-31-98; EDD 14-1998, f. 8-31-98, cert. ef. 9-1-98; EDD 15-2002(Temp), f. & cert. ef. 7-8-02 thru 1-3-03; EDD 3-2003, f. 3-20-03, cert. ef. 3-21-03; EDD 1-2005, f. & cert. ef. 2-25-05; EDD 1-2007(Temp), f. & cert. ef. 1-8-07 thru 7-6-07; EDD 2-2007, f. 6-15-07, cert. ef. 7-1-07

123-065-3110

Definition of Economic Terms

As used in ORS 285C.400(3) (also, see OAR 123-065-3200):

(1) "Most recently revised annual average unemployment rate & available" means the estimated percent of the civilian labor force that is unemployed on average for the entire previous calendar year and other relevant prior years, as benchmarked and published by the Employment Department in cooperation with the United States Bureau of Labor Statistics, as well as subsequent revisions to those percentages.

(2) "Most recently revised & annual per capita income levels available" means the average annual per capita personal income level as published and revised by the Bureau of Economic Analysis of the United States Department of Commerce for the most recent calendar years available, as well as subsequent revisions to those levels.

(3) "Median ratio & of the county to the equivalent & of the entire United States for each year" means that for each year the annual average unemployment rate or average annual per capita personal income for the county is divided by the same year's national figure, and then from among the resulting quotients (ratios) equal numbers of highest and lowest values are ignored, so that the 'median ratio' is the one remaining value or the two remaining quotients added together and divided by two.

(4) "Equal to or less than 0.75 over the last 10 years" means that the relevant median derived per section (3) of this rule is computed for the most recent 10 consecutive years, for which figures as described in section (2) of this rule are available, and that the resulting median is equal to or less than 0.75 rounded to the nearest hundredth.

(5) Using the latest available figures as described in section (1) of this rule, "at least 1.3 over the last 20 years or over the last 10 years" means that the relevant median derived per section (3) of this rule is computed separately for the most recent 20 consecutive years and the most recent 10 consecutive years, and that at least one of the two resulting medians is equal to or greater than 1.3 rounded to the nearest tenth.

(6) "Negative net migration" means the county's change in total population minus natural population change (births - deaths) is equal to or less than negative one (-1), based on the most recent county population estimates available from the Portland State University Center for Population Research and Census, in comparison to the latest official decennial population count by the U.S. Census Bureau at least three entire years before this most recent estimate.

Stat. Auth.: ORS 285A.075
Stats. Implemented: ORS 285C.400
Hist.: EDD 7-1998(Temp), f. & cert. ef. 4-30-98 thru 8-31-98; EDD 14-1998, f. 8-31-98, cert. ef. 9-1-98p; EDD 15-2002(Temp), f. & cert. ef. 7-8-02 thru 1-3-03; EDD 15-2002(Temp), f. & cert. ef. 7-8-02 thru 1-3-03; EDD 3-2003, f. 3-20-03, cert. ef. 3-21-03; EDD 1-2005, f. & cert. ef. 2-25-05

123-065-3130

Definition of Facility

As used in ORS 285C.400 to 285C.420 and 317.124 to 317.131, "facility" or "facility site" has the meaning given in ORS 285C.400(4) and includes all of the following:

(1) A building or structure or group of two or more associated buildings and/or structures that are newly constructed beginning after the application for certification and are located at a common site or proximately adjacent sites entirely inside the boundary of a single rural enterprise zone.

(2) New additions or modifications occurring entirely after the application for certification to any previously constructed or occupied building or structure as otherwise described in section (1) of this rule.

(3) All of the real or personal property located at the site, whether or not it is inside or on a building or structure, as described in section (1) or (2) of this rule:

(a) If newly installed after the application for certification.

(b) Except for any vehicle, as well as device pulled, pushed or carried by a vehicle, that is designed to hold and transport people, goods or property on highways, waterways or railways beyond the zone boundary, including but not limited to aircraft, barges, carriages, railcars, trailers, trucks or ships.

(4) Any property leased by the business firm certified to receive the exemption under ORS 285C.409 and otherwise described in this rule, but only:

(a) For the exemption from property taxes, and not for the corporate excise or income tax credit under ORS 317.124, in which case only personal property may be leased; and

(b) If the firm is fully responsible for and pays all applicable ad valorem taxes potentially levied on such leased property through explicit provisions of the lease agreement.

(5) In first claiming the exemption under ORS 285C.409(1)(a) or (c) with the county assessor, the certified business firm may formally and irreversibly exclude all property as described and categorized in section (1), (2), (3) or (4) of this rule, as might be indicated in the agreement under ORS 285C.403(3)(c). In such a case, that entire category of property is subject henceforth to normal taxation for the entire exemption period.

123-065-3140

Definition of "In Service"

As used in ORS 285C.400 to 285C.420 and 317.124 to 317.131, "in service" has the meaning described in OAR 150-285C.409 (notwithstanding the definition under ORS 285C.050 as used for the exemption under ORS 285C.170 and 285C.175).

123-065-3170

Definition of Sponsor

As used in ORS 285C.400 to 285C.420 and 317.124 to 317.131, "sponsor" or "zone sponsor" has the same meaning as described in OAR 123-065-0140, in that all cosponsors of the zone shall jointly approve or exercise any and all actions under ORS 285C.400 to 285C.420 and 317.124 to 317.131, except for the particular adoption of a resolution as required under ORS 285C.403(3)(a).

123-065-3200

Determining Eligible Rural Enterprise Zones

In determining if a county conforms to the definition of ORS 285C.400(3) of a 'county with chronically low income or chronic unemployment':

(1) With the formal release, publication and availability of benchmarked annual unemployment rates for the previous year and other relevant data, the Department shall analyze these data, along with the most recently revised data available for other relevant prior years, and ascertain which counties in the state satisfy the definition.

(2) The Department shall identify any existing rural enterprise zone in those counties, preparing maps or other such information as feasible and appropriate for use by the general public and business firms, as well as respective local zone managers and county assessors.

(3) The official determination as described in this rule shall first take effect on July 1 next following formal availability of the latest relevant annual data and shall apply until and including June 30 of the next calendar year, pending:

(a) Revisions, if any, as described in OAR 123-065-3230; or

(b) The next annual determination.

(4) Conformance with the definition shall be achieved if OAR 123-065-3110(4), (5) or (6) is true.

Stat. Auth.: ORS 285A.075
Stats. Implemented: ORS 285C.400 & 285C.403
Hist.: EDD 7-1998(Temp), f. & cert. ef. 4-30-98 thru 8-31-98; EDD 14-1998, f. 8-31-98, cert. ef. 9-1-98; EDD 15-2002(Temp), f. & cert. ef. 7-8-02 thru 1-3-03; EDD 3-2003, f. 3-20-03, cert. ef. 3-21-03; EDD 1-2005, f. & cert. ef. 2-25-05; EDD 1-2007(Temp), f. & cert. ef. 1-8-07 thru 7-6-07; EDD 2-2007, f. 6-15-07, cert. ef. 7-1-07

123-065-3230

Revisions to Currently Eligible Rural Enterprise Zones

To ensure that the counties currently deemed as conforming to ORS 285C.400(3) accurately reflect the most recently revised annual data available for the nation and county, following a determination as described in OAR 123-065-3200:

(1) During the course of the year from July 1 to June 30, the Department may obtain an officially and publicly made revision or correction to relevant annual data.

(2) The Department shall review such revised data to determine whether it would alter the status of any county.

(3) Pursuant to section (2) of this rule, if any county is to be thus removed or added to the counties currently identified by OAR 123-065-3200:

(a) The effective date of any such change shall be the first day of the second month following the month in which the revised or corrected data was formally released or published; and

(b) The Department shall notify the county assessor and local zone manager of any rural enterprise zone in such a county and revise and reissue relevant lists, maps and other materials, as appropriate.

(4) A correct, prior determination in accordance with OAR 123-065-3200 or this rule is not subject to retroactive change.

123-065-3300

Written Agreement with Zone Sponsor

For purposes of the written agreement between a business firm and the sponsor of the rural enterprise zone under ORS 285C.403(3)(c) and (d):

(1) The agreement shall consist at a minimum of the following:

(a) Acknowledgment of the planned or pending application for certification under ORS 285C.403(1) and (2);

(b) Concise description of the firm's proposed investments, facility and workforce;

(c) Specification of the obligations that the proposed investments, facility and workforce must satisfy under ORS 285C.412, which the agreement in no way supersedes;

(d) Identification of all the parties to the agreement and their representatives;

(e) Zone sponsor's explicit approval for the firm to receive the exemption under ORS 285C.409 on its qualifying facility;

(f) The sponsor's statement as to the number of consecutive tax years that will comprise the period of exemption beginning after the facility is placed in service, such that this period is only seven such years, if the agreement says nothing to the contrary about it being eight or more years (up to the maximum of 15 years); and

(g) With respect to additional conditions or requirements by the zone sponsor under ORS 285C.403(2)(e) and (3)(c):

(A) Indication that the sponsor is not imposing or requesting any such condition or requirement; or

(B) Specification of any such condition or requirement, in accordance with OAR 123-065-2500 to 123-065-2599, including, at a minimum:

(i) Methods for demonstrating satisfaction of the condition or requirement; and

(ii) Explicit consequences for failure to satisfy the condition or requirement.

(2) The agreement may be:

(a) Part of a broader accord involving parties other than the firm and the sponsor, insofar as such an accord contains and cites the elements listed in section (1) of this rule.

(b) Preauthorized, directly sanctioned by resolution or approved by other means of the zone sponsor or of each cosponsor as described in OAR 123-065-2550.

Stat. Auth.: ORS 285A.075
Stats. Implemented: ORS 285C.403 & 285C.409
Hist.: EDD 7-1998(Temp), f. & cert. ef. 4-30-98 thru 8-31-98; EDD 14-1998, f. 8-31-98, cert. ef. 9-1-98; EDD 15-2002(Temp), f. & cert. ef. 7-8-02 thru 1-3-03; EDD 3-2003, f. 3-20-03, cert. ef. 3-21-03; EDD 1-2005, f. & cert. ef. 2-25-05; EDD 1-2007(Temp), f. & cert. ef. 1-8-07 thru 7-6-07; EDD 2-2007, f. 6-15-07, cert. ef. 7-1-07

123-065-3330

Timing of Written Agreement

For purposes of the requisite written agreement under ORS 285C.403(3)(c) and (d) between a business firm and the sponsor of a rural enterprise zone:

(1) The agreement must be concluded, signed and dated by an authorized representative or representatives of the firm and of the zone sponsor or of each cosponsor:

(a) On or after the effective date on which:

(A) The zone is designated or the facility site is amended into the zone through a change in the boundary of the zone; and

(B) The county containing the facility site is officially determined to conform with the definition of ORS 285C.400(3), pursuant to OAR 123-065-3200 or 123-065-3230; and

(b) Before the corresponding effective date on which:

(A) The zone is terminated; and

(B) The county is not subject to a positive official determination as described in paragraph (a)(B) of this section.

(2) The sponsor shall provide a copy of the concluded, signed and dated written agreement to the Department, which shall review the agreement, and if the following are accurate, the Department shall issue a letter for attachment to the written agreement confirming that:

(a) On the date of the agreement's execution, the county containing the facility site is officially determined to conform with the definition of ORS 285C.400(3), as described in OAR 123-065-3200 or 123-065-3230, and one party to the agreement is the sponsor of the rural enterprise zone; and

(b) The agreement satisfies applicable provisions of OAR 123-065-3300.

(3) Following the certification of the business firm as described in OAR 123-065-3430 or an effective date in subsection (1)(b) of this rule, the agreement may not be substantially modified, replaced, amended, supplemented or terminated, except as:

(a) Explicitly provided in the original version of the agreement; and

(b) Mutually accepted and documented by all parties to the agreement.

Stat. Auth.: ORS 285A.075
Stats. Implemented: ORS 285C.403 & 285C.406
Hist.: EDD 7-1998(Temp), f. & cert. ef. 4-30-98 thru 8-31-98; EDD 14-1998, f. 8-31-98, cert. ef. 9-1-98; EDD 15-2002(Temp), f. & cert. ef. 7-8-02 thru 1-3-03; EDD 3-2003, f. 3-20-03, cert. ef. 3-21-03; EDD 1-2005, f. & cert. ef. 2-25-05; EDD 1-2007(Temp), f. & cert. ef. 1-8-07 thru 7-6-07; EDD 2-2007, f. 6-15-07, cert. ef. 7-1-07

123-065-3360

County/City Resolutions

For purposes of resolutions adopted by the governing body of a county or city under ORS 285C.403(3)(a):

(1) A criterion for certification is adoption of a resolution approving the exemption for the facility by the county and any city in which the facility is located, such that:

(a) Both the county and the city must adopt the resolution if any part of the facility is located in incorporated territory, but only the county, if the facility is located entirely in unincorporated territory;

(b) If such a county or city is the sponsor or a cosponsor of the zone, any authorization or approval of a written agreement pursuant to OAR 123-065-3300 by formal resolution of the city's or county's governing body shall automatically fulfill this criterion; and

(c) If such a county or city is neither the sponsor nor a cosponsor, it may nevertheless be a party to the written agreement in accordance with OAR 123-065-3300, but this criterion necessitating adoption of a formal resolution remains in effect.

(2) A resolution by the governing body of a city or county as described in section (1) of this rule or to approve a written agreement consistent with OAR 123-065-3300 may be adopted at any time with respect to conclusion of the agreement or the effective dates as described in OAR 123-065-3330(1). However, if the resolution substantially implements or provides for all or part of the agreement by the zone sponsor, as opposed to merely authorizing an otherwise operable agreement, the resolution must be adopted after conclusion of the agreement and prior to termination of the zone in order for the business firm to be certified.

Stat. Auth.: ORS 285A.075
Stats. Implemented: ORS 285C.403
Hist.: EDD 7-1998(Temp), f. & cert. ef. 4-30-98 thru 8-31-98; EDD 14-1998, f. 8-31-98, cert. ef. 9-1-98; EDD 15-2002(Temp), f. & cert. ef. 7-8-02 thru 1-3-03; EDD 3-2003, f. 3-20-03, cert. ef. 3-21-03; EDD 1-2005, f. & cert. ef. 2-25-05

123-065-3400

Applying for Certification

For purposes of the application for certification under ORS 285C.403(1) and (2):

(1) In order for a business firm to receive the exemption on its facility under ORS 285C.409:

(a) The firm must do the following before hiring new employees to work at the proposed facility and before commencing any physical work on the facility, such as construction, reconstruction, additions, modifications or installations of any qualifying property or improvements:

(A) Fill out the latest revision of the Department of Revenue form 150-310-073, Certification Application: Long-Term Rural Oregon Tax Incentive, as completely as the firm is capable of doing;

(B) Have the form signed and dated by the owner or authorized representative of the firm;

(C) Submit a signed original of the form to either the local zone manager representing the sponsor of the enterprise zone or the county assessor of the county in which the facility is located; and

(D) Submit an executed copy of the form to either the local zone manager or the county assessor, whichever one does not receive the signed original.

(b) Submission of the application form as described in subsection (a) of this section must occur, with respect to the rural enterprise zone:

(A) On or after the effective date of the zone's designation or of a change to the zone boundary adding the facility site; and

(B) Before the effective date of the zone's termination.

(2) Submission of the application form may occur before or after any relevant resolution, commitment, written agreement or effective date of official determination of rural enterprise zone eligibility in the county.

(3) Estimated numbers, anticipated dates or other expectations indicated in the application form are to be based on the best and most current information available to the business firm and shall not be construed as binding in and of themselves. The business firm shall inform the local zone manager and county assessor in writing of any significant changes to such expectations.

(4) The commitments made by the business firm (as required in the application form or otherwise during the certification process) shall be accepted at face value for purposes of certifying the firm, but such a commitment shall not relieve the firm of actually needing to meet an applicable requirement under ORS 285C.400 to 285C.420 and 307.124 to 307.131.

123-065-3430

Certification

For purposes of ORS 285C.403(3) to (6), following submission of the application for certification as described in OAR 123-065-3400:

(1) The signatures of the local zone manager and county assessor approving the certification application are not valid if either signature occurs:

(a) After any part of the facility is placed in service;

(b) After the operational date specified under ORS 285C.406(2); or

(A) The commitments by the firm in the application to meet requirements under ORS 285C.412;

(B) The relevant written agreement and the corresponding letter of confirmation by the Department as described in OAR 123-065-3330;

(C) Any resolution by the sponsor or a cosponsor of the zone that authorizes or effects the written agreement in paragraph (B) of this subsection; or

(D) The relevant resolution or resolutions by the county/city in which the facility is located under ORS 285C.403(3)(a).

(2) Approval of the certification application may occur after:

(a) The effective date of the termination of the enterprise zone; or

(b) Commencement of applicable hiring or physical work at or for the facility.

(3) Upon satisfaction of the criteria under ORS 285C.403(3), except as qualified in this rule and OAR 123-065-3460(2), the local zone manager and the county assessor shall approve the certification application, at which point:

(a) The business firm is "certified," such that it is eligible for the exemption under ORS 285C.409; and

(b) The zone manager and assessor shall send copies of the signed original certification application form with all relevant attachments to the firm, the Department and the Department of Revenue.

Stat. Auth.: ORS 285A.075
Stats. Implemented: ORS 285C.403, 285C.406, 285C.409 & 285C.412
Hist.: EDD 7-1998(Temp), f. & cert. ef. 4-30-98 thru 8-31-98; EDD 14-1998, f. 8-31-98, cert. ef. 9-1-98; EDD 15-2002(Temp), f. & cert. ef. 7-8-02 thru 1-3-03; EDD 3-2003, f. 3-20-03, cert. ef. 3-21-03; EDD 1-2005, f. & cert. ef. 2-25-05

123-065-3445

Other Enterprise Zone or Construction Exemptions

For purposes of the exemption under ORS 285C.409:

(1) An eligible business firm may seek and receive approval for authorization under ORS 285C.140 or 285C.160, while applying for and being certified under ORS 285C.403, although the zone sponsor and business firm shall clarify and resolve the situation as soon as possible.

(2) However, any property exempted under ORS 285C.170 or 285C.175, whether in the same or another enterprise zone, may not concurrently or subsequently be exempt under any paragraph of ORS 285C.409(1).

(3) Property that is exempt under ORS 285C.409(1)(a) or (b) may not receive an exemption under ORS 285C.175, unless it is qualified property for which exemption would otherwise be allowed under ORS 285C.170, as described in OAR 123-065-4800.

(4) Property may be subject to exemption as otherwise allowed under ORS 307.330, without necessarily jeopardizing the exemption under ORS 285C.409(1)(c).

(5) This rule does not relieve a taxpayer of any requirement to timely file forms, evidence or notice with the county assessor for purposes of (or to reserve the taxpayer's right to) an exemption on property under ORS 285C.170 or 307.330 and 307.340, as well as 285C.409.

Stat. Auth.: ORS 285A.075
Stats. Implemented: ORS 285C.403, 285C.409 & 285C.420
Hist.: EDD 1-2005, f. & cert. ef. 2-25-05

123-065-3460

Post-Certification

With certification as described in OAR 123-065-3430:

(1) In order for a certified business firm's facility to qualify for the exemption under ORS 285C.409, the firm shall submit written notification and information to the county assessor (and to the zone sponsor, Department or Department of Revenue, as requested), including but not limited to easily understood documentation on the following:

(a) All property comprising the facility and how it complies with OAR 123-065-3130;

(b) Ownership of any leased property at the facility and corresponding lease agreements;

(d) When and by what measure the facility has been placed in service.

(2) In the absence of or in addition to, but not in lieu of, applicable provisions in this division of administrative rules or OAR chapter 150, the county assessor may arrange with the business firm in writing for certain methods and mechanisms to verify compliance with section (1) of this rule and the applicable requirements under ORS 285C.412, as a condition of the county assessor's approval of the certification application, regardless of the zone sponsor's concurrence or incorporation of such arrangements in the written agreement under ORS 285C.403(3)(c).

(3) Failure by the county assessor to seek or obtain the arrangements described in section (2) of this rule does not relieve the business firm of the obligation to demonstrate its compliance with and satisfaction of any applicable requirement.

Stat. Auth.: ORS 285A.075
Stats. Implemented: ORS 285C.409, 285C.412, 285C.415 & 285C.420
Hist.: EDD 7-1998(Temp), f. & cert. ef. 4-30-98 thru 8-31-98; EDD 14-1998, f. 8-31-98, cert. ef. 9-1-1998; EDD 15-2002(Temp), f. & cert. ef. 7-8-02 thru 1-3-03; EDD 3-2003, f. 3-20-03, cert. ef. 3-21-03; EDD 1-2005, f. & cert. ef. 2-25-05

123-065-3480

Subsequent Investments

For real or personal property described in OAR 123-065-3130 but newly located, completed and placed in service at the facility site on or after the January 1 "assessment date" cited in ORS 285C.409(1)(c):

(1) Any such property is subject to exemption from property taxes under ORS 285C.409 for the remainder of the 7 to 15 tax years available.

(2) Neither additional operations nor the introduction of such property at the facility shall lengthen or add to the exemption period on that or any property.

(3) A certified business firm may receive another (potentially overlapping) period of exemption affecting additional property at the same facility only if the firm, in accordance with ORS 285C.403, again:

(a) Applies for certification;

(b) Meets relevant criteria and is approved for certification;

(d) Undertakes additional operations at the facility.

(4) The firm or the applicable facility must accomplish the items in section (3) of this rule entirely independent of and in addition to the respective actions and investments pertaining to the certification or qualification for any previously granted exemption under ORS 285C.409.

(5)(a) Additional property of a business firm, certified for purposes of sections (3) and (4) of this rule, shall be subject to exemption as described in sections (1) and (2) of this rule until the earlier of:

(A) Final notice under ORS 285C.415 to the county assessor that all applicable requirements under ORS 285C.412 have been met; or

(B) The underlying/preexisting exemption expires (on June 30), and the certified business firm has not notified the assessor in writing to treat the additional property as a part of the exemption that is expiring.

(b) Upon fulfillment of either paragraph (a)(A) or (B) of this section, the additional property stays exempt until the end of its own period of exemption, but it is subject to the operation of ORS 285C.420 (disqualification for failure to meet or maintain an applicable requirement).

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.403, 285C.409 & 285C.412
Hist.: EDD 7-1998(Temp), f. & cert. ef. 4-30-98 thru 8-31-98; EDD 14-1998, f. 8-31-98, cert. ef. 9-1-98; EDD 15-2002(Temp), f. & cert. ef. 7-8-02 thru 1-3-03; EDD 3-2003, f. 3-20-03, cert. ef. 3-21-03; EDD 1-2005, f. & cert. ef. 2-25-05; EDD 1-2007(Temp), f. & cert. ef. 1-8-07 thru 7-6-07; EDD 2-2007, f. 6-15-07, cert. ef. 7-1-07

123-065-3500

Minimum Size of Investment

For purposes of the minimum investment in the facility under ORS 285C.412(1)(a), (2)(a), (3)(a), (4)(b) or (5)(a) to be made by a certified business firm:

(1) Relevant investment costs for meeting the minimum shall include only expenses that can be documented through existing records or retrospective compilation of evidence, and that are incurred in association with property owned or leased by the firm that is part of the facility, for the following:

(a) Construction, reconstruction, modification or installation of such property, including but not limited to materials, supplies, labor, building contractors, engineering, physical connections to utilities, on-site development, and so forth; or

(b) Purchase of any such property. (Alternatively, the current real market value shall be used for property that is newly moved or transferred to the facility site but that was already owned or leased by the firm/owner of leased property.)

(2) Regardless of association with the facility or property, relevant investment costs do not include:

(a) Cost of financing, public permit or service charges, legal fees, the value of the firm's own management, expenses to maintain finished property and so forth;

(b) Cost or value of property that at the time of certification is already owned or leased by the firm and located at the facility site; or

(c) Expenses associated with purchases or with construction, reconstruction, modifications or installations of property that is not completed until on or after January 1 immediately following the year when the facility is placed in service.

(3) The firm shall provide evidence to the assessor in writing when this requirement is satisfied as soon as possible after such satisfaction is verifiable.

(4) Property excluded by this rule does not necessarily affect what property may be exempt under ORS 285C.409, which depends on being part of the qualifying facility as described in OAR 123-065-3130.

(5) In determining 'real market value of all nonexempt taxable property in the county,' the figure for the most recently available fiscal year shall be used, as printed in the latest edition of "Oregon Property Tax Statistics" (150-303-045), Oregon Department of Revenue, at the time of certification.

Stat. Auth.: ORS 285A.075
Stats. Implemented: ORS 285C.412 & 285C.415
Hist.: EDD 7-1998(Temp), f. & cert. ef. 4-30-98 thru 8-31-98; EDD 14-1998, f. 8-31-98, cert. ef. 9-1-98; EDD 15-2002(Temp), f. & cert. ef. 7-8-02 thru 1-3-03; EDD 3-2003, f. 3-20-03, cert. ef. 3-21-03; EDD 1-2005, f. & cert. ef. 2-25-05

123-065-3530

Minimum Hiring

For purposes of the minimum hiring and employment to be met and maintained at an exempt facility under ORS 285C.412(1)(b), (2)(c), (3)(d), (4)(d) or (5)(c) by a certified business firm:

(1) Employees are persons each working directly or indirectly for the firm in excess of 32 hours per week (consistent with OAR 123-065-4060) in an established, permanent position.

(2) Twelve months prior to when the facility is placed in service, the firm shall establish and make available information showing the total number of employees, each of whose job is located and performed:

(a) At the facility site; and

(b) Within the state as a whole other than at the facility site.

(3) The minimum requirements are met if:

(a) The number of employees located and performing their jobs at the facility site, less the corresponding number of employees per subsection (2)(a), equals or exceeds the respective minimum; and

(b) The number of employees of the firm in the state as a whole other than at the facility site is the same or greater than the corresponding number of employees per subsection (2)(b) of this rule.

(4) The firm shall provide evidence to the assessor in writing when each subsection of section (3) of this rule is satisfied, as soon as possible after such satisfaction is achieved, such that:

(a) For subsection (3)(a) of this rule, this must occur on or before December 31 not more than the following number of years after December 31 of the year in which the facility is placed in service:

(A) Five years for ORS 285C.412(1) or (4); or

(B) Three years for ORS 285C.412(2), (3) or (5).

(b) For subsection (3)(b) of this rule, this must occur at the same time when the assessor is notified that the applicable requirement in subsection (a) is met and for 12 months afterwards.

123-065-3545

Minimum Distance from I-5

For purposes of the minimum distance from the facility of a certified business firm to Interstate Highway 5 under ORS 285C.412(3)(b) or (5)(b):

(1) The distance is measured as:

(a) A straight line; and

(b) The shortest possible gap between the nearest part of the facility site relative to any point along the median of the highway, regardless if that point is in this state or offers access on/off the highway.

(2) Spurs or bypasses such as I-105 or I-205 are excluded.

(3) Distance is rounded to the nearest whole number, such that an eligible location must be effectively farther than 10.4 miles from I-5.

Stat. Auth.: ORS 285A.075
Stats. Implemented: ORS 285C.412 & 285C.415
Hist.: EDD 1-2005, f. & cert. ef. 2-25-05

123-065-3560

Minimum Average Annual Compensation

For purposes of the minimum average annual compensation to be met and maintained at an exempt facility under ORS 285C.412(1)(c), (2)(b), (3)(c), (4)(c) or (5)(d) by a certified business firm:

(1) The total remuneration during a calendar year shall be considered if it is:

(a) In the form of wages, salary, bonuses, shift differential, overtime pay, profit-sharing, paid vacation, or financial benefits such as life insurance, medical coverage or retirement plans, but excluding sales commissions, free meals, club membership, workplace amenities, benefits mandated by federal, state or local law, and so forth; and

(b) Paid to any employee located and performing work directly or indirectly for the firm at the facility site, regardless of hours worked per week or the permanence of the employee's position.

(2) For each job at the facility in which the employee works less than 40 hours per week or for less than the entire calendar-year period, the actual annual compensation described in section (1) of this rule shall be multiplied by the appropriate inverse time factor in order to approximate the equivalent level of annual compensation, as if the job is worked full-time for the entire year.

(3) Each employee's total annual compensation under section (1) or (2) of this rule shall be summed and divided by the number of applicable employees or positions to derive an average.

(4) On or before December 31 five years after December 31 of the year in which the facility is placed in service, this computed average must equal or exceed 150 percent of (1.5 times) the most recent average annual covered payroll per employee for all industries in the county in which the facility site is located, as then currently available and reported by the Employment Department.

(5) The firm shall provide evidence to the assessor in writing when section (4) of this rule is satisfied as soon as possible after such satisfaction is achieved.

123-065-3600

Maintaining Employment and Compensation

(1) Following initial satisfaction of the minimum requirement for total employment or average annual compensation, as described in OAR 123-065-3530 and 123-065-3560 at a facility exempt under ORS 285C.409, the facility's applicable employment or compensation may never be less than the mandatory minimum level, until after December 31 during the final tax year of the exemption period; otherwise, the exemption is disqualified consistent with OAR 150-285C.420.

(2) The mandatory minimum level for average annual compensation at the facility remains fixed, regardless of how much:

(a) The facility's annual average compensation initially exceeded the county's then current average annual wage level; or

(b) The county's average annual wage subsequently rises during the exemption period.

(3) Notwithstanding section (1) of this rule, the facility's applicable employment or compensation may fall below the mandatory minimum level under certain exceptional circumstances, including but not limited to the following:

(a) A natural disaster substantially disrupting the facility's operations;

(b) Six or more months of severe economic troubles or military conflict significantly affecting the United States, other major foreign economies and the firm's industry;

(c) Unforeseen coincidence of vacant positions at the facility, such as the case in which previously hired persons have died, voluntarily quit or been fired for cause; or

(d) Temporary curtailment in the operation of the facility lasting no longer than twelve months to undertake major repairs in response to mechanical breakdowns that are unusual and unexpected within normal engineering parameters and maintenance programming.

Stat. Auth.: ORS 285A.075
Stats. Implemented: ORS 285C.412, 285C.415 & 285C.420
Hist.: EDD 7-1998(Temp), f. & cert. ef. 4-30-98 thru 8-31-98; EDD 14-1998, f. 8-31-98, cert. ef. 9-1-98; EDD 15-2002(Temp), f. & cert. ef. 7-8-02 thru 1-3-03; EDD 3-2003, f. 3-20-03, cert. ef. 3-21-03; EDD 1-2005, f. & cert. ef. 2-25-05

123-065-3800

Request for Tax Credit

For purposes of being approved for the tax credit under ORS 317.124(3), unless otherwise directed by the Governor or by the Director:

(1) A request for the credit shall be formally submitted to the Director from an authorized executive of the corporation, preferably pursuant to relevant local approval and certification under ORS 285C.403.

(2) Official consideration of the request by the Governor shall not be expected prior to such local approval.

(3) The request must explicitly indicate:

(a) That the corporation is seeking gubernatorial approval;

(b) When it would expect to begin claiming such credits; and

(4) The request shall contain the best possible information about the corporation's future income and plans to use the credit, as necessary to estimate the value and applicability of the tax credit.

(5) The Director will forward the request to the Governor, which may be accompanied by a recommendation or (as warranted) by the following:

(a) Background information and analysis about the corporation, the proposed facility, tax impacts, the local community and so forth; and

(b) Summary of consultations with other state agencies including but not limited to the Department of Revenue.

(6) Approval of the request may be conditioned on additional commitments by the corporation as contained in any form of agreement or arrangement with the State.

(7) The following is considered exempt from public release under ORS 192.502 and other laws:

(a) Any information received through the corporation as described in section (4) of this rule; and

(b) The request and any other information associated with it, whether drafted by the Department or otherwise generated, unless and until such time as the Governor has approved the request, thereby deeming such information to be final.

Stat. Auth.: ORS 285A.075
Stats. Implemented: ORS 317.124
Hist.: EDD 3-2003, f. 3-20-03, cert. ef. 3-21-03; EDD 1-2005, f. & cert. ef. 2-25-05

123-065-3830

Tax Credit

(1) To be effective, the Governor's approval of a corporate excise or income tax credit under ORS 317.124 may take the form of a letter, memo or similarly official document that:

(a) Names the corporation and refers to its qualifying facility;

(b) Simply grants the tax credit, approves the corporation's request or directs necessary action by State officials;

(d) Is done and effective by the ultimate due date (including as a consequence of normal extensions) to file a tax return for the corporation's fourth income/excise tax year, in which the facility is first placed in service.

(2) To claim the tax credit, as approved by the Governor, the certified business firm shall fill out the latest revision of the Department of Revenue form 150-102-043, Long-Term Enterprise Zone Facilities Credit, and submit it with the tax return for each applicable income/excise tax year of the corporation.

Stat. Auth.: ORS 285A.075
Stats. Implemented: ORS 317.124
Hist.: EDD 3-2003, f. 3-20-03, cert. ef. 3-21-03; EDD 1-2005, f. & cert. ef. 2-25-05

123-065-3850

Revenue Distribution to Local Zone Sponsor

(1) Consistent with OAR 123-065-2700(2)(c), the sponsor of an enterprise zone containing the facility of a corporation that claims the tax credit under ORS 317.124 might receive funds through the Department of Revenue from the Long Term Enterprise Zone Fund established under ORS 317.127.

(2) The sponsor's receipt of such funds depends on:

(a) The qualifying taxpayer's having claimed the credit;

(b) The taxpayer's making applicable tax payments; and

(3) As to the amounts for distribution and the current state fiscal year:

(a) If they exceed the property taxes that relevant taxing districts would receive without the exemption on the facility under ORS 285C.409 in the corresponding property tax year, then that excess goes to the zone sponsor.

(b) If there is no relevant exemption under ORS 285C.409 in the corresponding property tax year, then the entire amount goes to the zone sponsor.

(4) For purposes of section (3) of this rule, the zone sponsor is responsible for making timely arrangements, so that:

(a) The sponsor can receive distributed funds in a way that effectively ensures the Department of Revenue of having made payment to the zone sponsor (including but not limited to a joint mechanism for all cosponsors, or through a deposit account administered by a single cosponsor on behalf of the entire zone sponsorship); and

(b) The applicable provisions of ORS Chapter 294 and other state or local laws are satisfied with regard to collecting, holding and using such funds.

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 317.131
Hist.: EDD 3-2003, f. 3-20-03, cert. ef. 3-21-03; EDD 1-2005, f. & cert. ef. 2-25-05; EDD 1-2007(Temp), f. & cert. ef. 1-8-07 thru 7-6-07; EDD 2-2007, f. 6-15-07, cert. ef. 7-1-07

Three- to Five-Year Exemption on Taxable Property

123-065-4000

Purpose and Scope

OAR 123-065-4000 to 123-065-4999 clarify, specify and establish elements of ORS 285C.050 to 285C.250 (Oregon Enterprise Zone Act) for the determinations, procedures and requirements relevant to the three- to five-year exemption from property taxes that is available for qualified property of eligible business firms in any enterprise zone. These administrative rule are not meant to interfere with the fiscal parameters or the direct administration of property taxes by county assessors, and they do not supersede administrative rules of the Department of Revenue in OAR chapter 150, as adopted or amended in the future, for purposes necessary under the statutory sections listed in ORS 285C.125(1).

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.045 & 285C.050 - 285C.250
Hist.: EDD 9-2000, f. & cert.. ef. 5-2-00; EDD 1-2005, f. & cert. ef. 2-25-05

123-065-4010

Relationship to Rest of Division

OAR 123-065-4000 to 123-065-4999 do not affect the administrative rules elsewhere in this division that interpret ORS 285C.400 to 285C.420 and 307.124 to 307.131, and unless the context or specific references demand otherwise, such other parts of this division likewise do not apply to OAR 123-065-4000 to 123-065-4999. However, OAR 123-065-0000 to 123-065-2999 (including but not limited to statutory terms, boundary changes, termination or designation of enterprise zones, and the duties and additional requirements of a zone sponsor) do affect and interrelate with these administrative rules.

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.050 - 285C.250
Hist.: EDD 9-2000, f. & cert.. ef. 5-2-00; EDD 15-2002(Temp), f. & cert. ef. 7-8-02 thru 1-3-03; EDD 3-2003, f. 3-20-03, cert. ef. 3-21-03; EDD 1-2005, f. & cert. ef. 2-25-05

123-065-4020

Organization of Subsequent Rules and the Process for Businesses Seeking Exemption

The Oregon Enterprise Zone Act from ORS 285C.125 through 285C.240 provides for an exemption from taxation on property that lasts at least three years, starting when a business firm and the property first qualify, and based on the following elements of OAR 123-065-4000 to 123-065-4999:

(1) The sponsor of the enterprise zone may extend the usual three-year exemption period to four or five consecutive years of tax abatement in total, subject to particular processes, requirements or local approval before authorization (OAR 123-065-4100 to 123-065-4199).

(2) The firm must be an eligible business firm engaged in eligible activities, as determined with authorization (OAR 123-065-4200 to 123-065-4299).

(3) The eligible business firm must obtain authorization (OAR 123-065-4300 to 123-065-4399) by:

(a) Submitting an application form generally prior to beginning any work on the proposed investment; and

(b) Ministerial approval of the local zone manager and the county assessor after special consultation.

(4) The business firm must satisfy certain employment and hiring requirements to initially qualify and must maintain related requirements during the exemption period to remain qualified (OAR 123-065-4400 to 123-065-4499, and see division 070 of this chapter of administrative rules).

(5) The exemption is available (OAR 123-065-4500 to 123-065-4599) only for:

(a) An authorized business firm that timely files with the county assessor to claim the exemption; and

(b) Certain kinds of property based on a number of attributes, one of the most fundamental of which is the property's newness for use and occupancy in the zone, as well as the definition of "qualified property" under ORS 285C.050(16).

(6) OAR 123-065-4600 to 123-065-4999 address other special matters.

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.045 & 285C.050 - 285C.250
Hist.: EDD 9-2000, f. & cert.. ef. 5-2-00; EDD 1-2005, f. & cert. ef. 2-25-05; EDD 1-2007(Temp), f. & cert. ef. 1-8-07 thru 7-6-07; EDD 2-2007, f. 6-15-07, cert. ef. 7-1-07

123-065-4050

Being and Operating a Business

For defining "business firm":

(1) As used in ORS 285C.050(3), "operating or conducting one or more trades or businesses" means to manage or direct commercial affairs, as evidenced by the following activities:

(a) Establishment of a place of business through ownership, renting or leasing;

(b) Approval to do business from the appropriate regulatory authorities, as documented by required licenses or permits;

(d) Acquisition of property that is necessary to perform business operations;

(e) Maintenance of business records such as those related to sales, shipments, personnel or payroll;

(f) Solicitation of orders for goods, supplies or services from other businesses or business operations within the firm; and

(g) Ultimate pursuit of economic profits.

(2) As used in ORS 285C.050(3) and 285C.110, "municipal corporation" means any county, city, port district, school district, union high school district, community college district or any other public or quasi-public corporation, including but not limited to a municipal utility or dock commission, operated by a separate board or commission, or a people's utility district.

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.050 & 285C.110
Hist.: EDD 3-1996, f. & cert. ef. 4-2-96; EDD 13-1997, f. & cert. ef. 11-10-97; EDD 9-2000, f. & cert. ef. 5-2-00, Renumbered from 123-065-0110; EDD 1-2005, f. & cert. ef. 2-25-05

123-065-4060

Employment and Employees

As used in ORS 285C.050(7):

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

(2) "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.

(3) "Temporary or seasonal jobs" mean nonpermanent positions in which the persons filling them are hired, leased or contractually employed for less than a year's time, including but not limited to workers that are assigned to a qualified business firm by an external agency for periods of less than 12 consecutive months or on an ad hoc or as-needed basis.

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.050, 285C.200 & 285C.210
Hist.: EDD 3-1996, f. & cert. ef. 4-2-96; EDD 13-1997, f. & cert. ef. 11-10-97; EDD 9-2000, f. & cert. ef. 5-2-00, Renumbered from 123-065-0120; EDD 1-2005, f. & cert. ef. 2-25-05

123-065-4070

Modification of Existing Property

As defined under ORS 285C.050(12) and used in 285C.050 to 285C.250 and in this division of administrative rules, unless the context indicates otherwise, "modification" includes but is not limited to:

(1) Reconditioning, refurbishment, retrofitting or upgrade of real property machinery or equipment for purposes of ORS 285C.190; and

(2) The alteration or reconstruction of all or part of an existing building or structure, irrespective of any addition to the building or structure, consistent with one of the following terms, as used in ORS 285C.050(12) consistent with OAR 150-285C.180:

(a) "Modernization" meaning to adapt the building or structure to advances, ameliorations or updated practices by altering its style, technology, materials or engineering;

(b) "Remodeling" meaning to change the utilization, layout or appearance of the building or structure by reorganizing space and activities, achieving new operational objectives or correcting physical or economic deficiencies associated with the property; or

(c) "Renovation" meaning to restore, rebuild, redesign, repair or replace worn elements, so that the functionality, quality or attractiveness of the building or structure is equivalent to a former state.

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.050, 285C.175, 285C.180 & 285C.190
Hist.: EDD 13-1997, f. & cert. ef. 11-10-97; EDD 5-1998, f. 3-12-98, cert. ef. 3-15-98; EDD 9-2000, f. & cert. ef. 5-2-00, Renumbered from 123-065-0130; EDD 1-2005, f. & cert. ef. 2-25-05

Standard Exemption: Extended Abatement

123-065-4100

Definitions

For purposes of OAR 123-065-4100 to 123-065-4199:

(1) County Average Annual Wage as defined under ORS 285C.050(4) and used in 285C.160 and 285C.165 means the average annual covered payroll per employee for all industries in the county, as estimated by the Employment Department, that is:

(a) Higher than that of any other county, in which any area of the enterprise zone is located, and thus not necessarily the county where the firm's investment in qualified property is located; and

(b) Most recently available at the time when one of the following effectively occurs (whichever is latest):

(A) Application for authorization is approved under ORS 285C.140(6), pursuant to annual transition date determined by the Department;

(B) Statement of authorization renewal is submitted under ORS 285C.165(1) for purposes of 285C.160(4); or

(C) Exemption claim is initially filed under ORS 285C.220 and 285C.225 by an inactively authorized business firm under ORS 285C.165(4).

(2) Compensation as used in ORS 285C.160 means all remuneration in the form of wages, salary, overtime pay, shift differential, profit-sharing, bonuses, paid vacation or financial benefits such as life insurance, medical coverage and retirement plans, but it does not include sales commissions, free meals, club membership, workplace amenities, benefits mandated by federal, state or local law, and so forth.

(3) Affected Employees means persons, positions or jobs under ORS 285C.050(13), which align with the following criteria:

(a) Included as "employment of the firm" in accordance with OAR 123-065-4400; and

(b) New jobs that are filled for the first time:

(A) After the date of application for authorization under ORS 285C.140(1), even if a person filling the job is already employed by the eligible business firm in another position that is refilled within the zone; and

(B) On or before December 31 during the first tax year of the exemption.

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.050, 285C.160 & 285C.165
Hist.: EDD 3-1996, f. & cert. ef. 4-2-96; EDD 5-1998, f. 3-12-98, cert. ef. 3-15-98; EDD 9-2000, f. & cert. ef. 5-2-00, Renumbered from 123-065-0500; EDD 1-2005, f. & cert. ef. 2-25-05

123-065-4110

Compensation Standard

For purposes of ORS 285C.160:

(1) To qualify for the additional one or two years of exemption on qualified property in an enterprise zone outside the Metro/Portland area regional urban growth boundary:

(a) All of an eligible business firm's Affected Employees must on average receive Compensation of not less than 150 percent of the County Average Annual Wage; and

(b) This requirement must be satisfied for and during each year throughout the exemption's first three years and the additional one or two years.

(2) Under ORS 285C.160(3)(a)(A) or 285C.165, as described in OAR 123-065-4100(1)(b), the County Average Annual Wage is fixed during the entire enterprise zone exemption period.

(3) For purposes of section (1) of this rule, the regular yearlong Compensation (excluding bonuses and so forth) associated with any applicable position that is temporarily vacant due to unforeseen circumstances at any time during the year may be used in computing the annual average Compensation for all such Affected Employees.

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.160, 285C.165 & 285C.240
Hist.: EDD 4-1994, f. & cert. ef. 2-24-94; EDD 3-1996, f. & cert. ef. 4-2-96, Renumbered from OAR 123-065-0050; EDD 5-1998, f. 3-12-98, cert. ef. 3-15-98; EDD 9-2000, f. & cert. ef. 5-2-00, Renumbered from 123-065-0510; EDD 1-2005, f. & cert. ef. 2-25-05

123-065-4120

Written Agreement between Sponsor and Eligible Business Firm

For purposes of the written agreement that is required between the sponsor of an enterprise zone and an eligible business firm under ORS 285C.160 and 285C.175(2)(b):

(1) To receive an additional one or two years of an enterprise zone exemption, the written agreement must be finalized no later than when approval of the application for authorization is fulfilled according to OAR 123-065-4345.

(2) Both the eligible business firm seeking an extended enterprise zone exemption and the sponsor of the zone (see OAR 123-065-2550) must formally authorize the written agreement.

(3) The written agreement shall specify whether the total period of abatement is four or five consecutive years.

(4) Notwithstanding section (1) of this rule, if the zone sponsor rejected a firm's request for an extended tax abatement, and the authorization application is subsequently approved, but the commencement of construction, modification or installation of qualified property has not yet occurred, then the sponsor may reverse its decision and enter into a written agreement, based on a resubmitted application under ORS 285C.140.

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.140, 285C.160 & 285C.175
Hist.: EDD 3-1996, f. & cert. ef. 4-2-96; EDD 5-1998, f. 3-12-98, cert. ef. 3-15-98; EDD 9-2000, f. & cert. ef. 5-2-00, Renumbered from 123-065-0520; EDD 1-2005, f. & cert. ef. 2-25-05

123-065-4130

Additional Reasonable Requirements

For the sponsor of an enterprise zone that approves an extended abatement and requests additional requirements of an eligible business firm under ORS 285C.160:

(1) All such additional requirements must be specified in the required written agreement between the eligible business firm and the zone sponsor as described in OAR 123-065-4120.

(2) Adherence to or satisfaction of such additional requirements shall in no way determine qualification for the first three years of an eligible business firm's enterprise zone exemption under ORS 285C.175.

(3) Such additional requirements shall conform to OAR 123-065-2500 to 123-065-2599.

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.160 & 285C.240
Hist.: EDD 3-1996, f. & cert. ef. 4-2-96; EDD 5-1998, f. 3-12-98, cert. ef. 3-15-98; EDD 9-2000, f. & cert. ef. 5-2-00, Renumbered from 123-065-0530; EDD 1-2005, f. & cert. ef. 2-25-05

123-065-4140

Appeal Rights

In regard to an extended abatement under ORS 285C.160 and the requirements therein, an eligible business firm shall have the same rights of appeal as provided elsewhere in ORS 285C.050 to 285C.250 for the authorization and qualification of an enterprise zone exemption, and no part of this division of administrative rules shall interfere with those rights, subject to the determination of appellate authorities.

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.160 & 285C.175
Hist.: EDD 3-1996, f. & cert. ef. 4-2-96; EDD 5-1998, f. 3-12-98, cert. ef. 3-15-98; EDD 9-2000, f. & cert. ef. 5-2-00, Renumbered from 123-065-0540; EDD 1-2005, f. & cert. ef. 2-25-05

Standard Exemption: Business Eligibility

123-065-4200

Definitions

(1) "Destination resort" as used in ORS 285C.070 and 285C.135(5)(c) (consistent with OAR 150-285C.180) means a facility with hotel accommodations at which visitors stay in order to access amenities connected to the resort, including but not limited to a development that satisfies the criteria under ORS 197.435 to 197.467.

(2) "Hotel" or "motel" as used in ORS 285C.070 and 285C.135(5)(c), consistent with ORS 699.005 (and OAR 150-285C.180), means a facility that:

(a) Offers rooms, suites of rooms, cabins, houses or other such units for transient lodging to persons typically from beyond the local area through direct overnight rental, time-share arrangements or other types of limited transactions;

(b) May include one or more visitor-oriented services, facilities or recreational activities, including but not limited to restaurants, laundry, conference rooms, golf course, swimming pool, tennis courts, ski runs, marinas or bicycle paths; and

(3) "Separate" as used in ORS 285C.135(3) means a definitive and physical demarcation, including but not limited to a wall between eligible and ineligible activities, sufficient to distinguish the employees and qualified property pertaining to either activity or group of like activities.

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.070 & 285C.135
Hist.: EDD 3-1996, f. & cert. ef. 4-2-96; EDD 5-1997, f. 4-14-97, cert. ef. 4-15-97; EDD 5-1998, f. 3-12-98, cert. ef. 3-15-98; EDD 9-2000, f. & cert. ef. 5-2-00, Renumbered from 123-065-0600; EDD 1-2005, f. & cert. ef. 2-25-05

123-065-4220

Basic Eligibility for Business Firms and Operations

For purposes of determining the eligibility of a business under ORS 285C.135(1) to be authorized or to qualify for an enterprise zone exemption under ORS 285C.175:

(1) The firm must (when qualified) produce, sell or provide goods, commodities, products, merchandise, work or services to other businesses or business operations, or be capable of doing so, through eligible activities.

(2) Such eligibility may be indicated if the firm's relevant operations are:

(a) Performed for internal purposes of the firm;

(b) Reimbursed through sales to another business firm;

(c) Equivalent to what is done for other business firms, even if the actual customer is a governmental agency, municipal corporation or nonprofit corporation; or

(d) Undertaken to create or add value to goods, products or services for ultimate exchange with persons or entities residing beyond the local economy.

(3) Besides manufacturing, assembly, fabrication, processing, shipping or storage, eligible activities include (subject to other provisions of ORS 285C.135) but are not limited to:

(a) Industrial processes or services such as cleaning, coating, curing, kiting, labeling, laminating, packaging, refining, smelting, sorting or treating;

(b) Generation or co-generation of electricity, steam or heat;

(d) Nonretail, in-shop refurbishment or restoration of equipment or machinery;

(e) Maintenance service or repair work on vehicles, products, parts or devices, performed on a nonretail basis at a permanent location, facility or shop, including but not limited to warranty service contracted or paid for by the manufacturer;

(f) Technical/customer support that is performed for internal purposes of the firm or is contracted or paid for by a nonretail third party such as the distributor or manufacturer;

(g) Standardized product testing, quality control or laboratory work;

(h) Bulk clerical processing;

(i) Development of standardized computer software products;

(j) Printing or mass document production;

(k) Distribution;

(l) Wholesaling, which may include complex transactions for single-item purchases by other businesses of large equipment involving contracts, factory-ordered specifications or other attributes distinguishing the sale from retail; or

(m) Production of agricultural, mineral, timber or other primary goods or commodities.

(4) As a matter of principle, eligibility and ineligibility are mutually exclusive for purposes of ORS 285C.135, such that if a firm or an activity of the firm is eligible, it is 'not' ineligible, and to be not eligible, it must be ineligible.

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.135
Hist.: EDD 5-1997, f. 4-14-97, cert. ef. 4-15-97; EDD 5-1998, f. 3-12-98, cert. ef. 3-15-98; EDD 9-2000, f. & cert. ef. 5-2-00, Renumbered from 123-065-0620; EDD 1-2005, f. & cert. ef. 2-25-05

123-065-4230

Ineligible Activities

For purposes of ORS 285C.135(2):

(1) The following activities are ineligible, and property used in these activities may not qualify for an enterprise zone exemption, regardless of the activity being performed for other businesses:

(a) Retail sales of goods or services;

(b) Retail food service or serving of meals;

(d) Entertainment or recreation provided directly to the patron or user;

(e) Child care or similar services;

(f) Provision of health care, medical services or similar services to patients;

(g) Professional services, such as accounting, communications, design, engineering, legal advice or management;

(h) Actuary, appraisal, banking, brokerage, extension of credit, insurance, investment, money lending or similar financial services;

(i) Leasing or management of real estate;

(j) Provision of residential housing for purchase or lease;

(k) Construction or modification of real property at the location where that real property is used or occupied;

(l) Installation of fixtures, machinery or equipment;

(m) Recreational vehicle parks; or

(n) Other similar activities.

(2) Notwithstanding OAR 123-065-4220, an activity is eligible in the following cases, despite being listed in:

(a) Subsection (1)(d) through (i) or (n) of this rule, in the case of a facility described and allowed by OAR 123-065-4280 (Headquarter Facilities);

(b) Subsection (1)(a), (d), (g), (h) or (n) of this rule, in the case of operations described and allowed by OAR 123-065-4270 (Call Centers);

(c) Subsection (1)(a) through (h) or (n) of this rule, in the case of Electronic Commerce operations, as described in OAR 123-065-7100, and located in an area designated as described in OAR 123-065-7200 to 123-065-7500; or

(d) Subsection (1)(a) through (e) or (n) of this rule, in the case of a hotel, motel or destination resort in an enterprise zone identified or described in OAR 123-065-4260, if the activity is:

(A) Located at the same general location as the hotel, motel or destination resort;

(B) Operated by the hotel, motel or destination resort; and

(C) Fifty percent or more of its receipts are derived from guests staying overnight at the hotel, motel or destination resort.

(3) A business firm is eligible, regardless of the presence within the enterprise zone of one or more activities listed in section (1) of this rule, if the requirements of OAR 123-065-4240 or 123-065-4250 are satisfied.

(4) Activities described in subsections (1)(b) through (i) or (n) of this rule (and the associated employees and property) are eligible, if performed:

(a) In direct support of an eligible business firm's operations, or as amenities for eligible employees/personnel;

(b) Within the same enterprise zone; and

(c) To support or benefit operations/personnel located mostly inside the zone, such that if more than 25 percent of the activity supports or benefits the firm's operations outside the zone in terms of person-time or costs, then the requirements of OAR 123-065-4280 for headquarter-type facilities must be fulfilled.

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.135 & 285C.185
Hist.: EDD 5-1997, f. 4-14-97, cert. ef. 4-15-97; EDD 5-1998, f. 3-12-98, cert. ef. 3-15-98; EDD 9-2000, f. & cert. ef. 5-2-00, Renumbered from 123-065-0630; EDD 16-2002, f. 9-12-02 cert. ef. 9-15-02; EDD 1-2005, f. & cert. ef. 2-25-05

123-065-4240

Eligible Business Firm with Ineligible Activities

For purposes of ORS 285C.135(3):

(1) A business firm is eligible and may qualify for an enterprise zone exemption:

(a) If the firm is, when qualified, engaged in an eligible activity in the enterprise zone;

(b) Provided that any ineligible activity of the firm is at a separate operation of the firm; and

(2) An eligible business firm's "employees of the firm work a majority of their time in eligible operations," as used in ORS 285C.200(3)(b):

(a) Includes any employee who performs any of the firm's eligible activities as described in OAR 123-065-4220 for 50 percent or more of the time spent at the employee's job;

(b) Includes any employee whose work is predominantly concerned with the provision of direct administration or technical support to the eligible business firm's eligible activities within the enterprise zone, consistent with OAR 123-065-4230(4); and

(c) Excludes positions and persons dedicated primarily to ineligible activities such as those listed in OAR 123-065-4230(1).

(3) Any requirement of an eligible business firm to hire, maintain or compensate employees under ORS 285C.050 to 285C.250 applies only to employees "included" in section (2) of this rule that work at locations inside the enterprise zone (or within 30 miles as applicable).

(4) An eligible business firm or the local zone manager shall see that the authorization application indicates distinctions relevant to this rule, and the local zone manager shall be prepared to assist the firm and the county assessor in determining the property or portions of such property that qualify according to OAR 123-065-4325(3)(e)(A) and 123-065-4510(1).

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.135, 285C.200 & 285C.210
Hist.: EDD 3-1996, f. & cert. ef. 4-2-96; EDD 5-1997, f. 4-14-97, cert. ef. 4-15-97; EDD 5-1998, f. 3-12-98, cert. ef. 3-15-98; EDD 9-2000, f. & cert. ef. 5-2-00, Renumbered from 123-065-0640; EDD 1-2005, f. & cert. ef. 2-25-05

123-065-4250

Gross Receipts Test

(1) A gross receipts test may be used in determining the eligibility of a business firm or business operation that partially involves an ineligible activity, but only if:

(a) There are Applicable Gross Receipts;

(b) The firm is not eligible as described in OAR 123-065-4230(2); and

(c) For lack of definitive or physical separation, the ineligible activity cannot be effectively isolated from eligible activities.

(2) The business firm or operation passes the gross receipts test and may otherwise be eligible for authorization or qualification in the enterprise zone, if the ratio of Applicable Gross Receipts to Ineligible Receipts equals or exceeds 4.0.

(3) In order for this gross receipts test to be effective, the local zone manager shall see that the application for authorization includes:

(a) An explanation of the eligibility of the firm or operation consistent with this rule; and

(b) Arrangements to substantiate this for the firm's future qualification, as appropriate.

(4) Applicable Gross Receipts as used in this rule are based on:

(a) Sales revenue derived directly from a party external to the firm in exchange for goods, products, commodities, merchandise, work or services;

(b) Operations located entirely inside the enterprise zone;

(d) An annual total for the most recent fiscal year or calendar year; and

(e) The firm's commercial state of affairs, as realized when the firm is qualified for the property tax exemption being sought, which is estimated for purposes of the application for authorization.

(5) Ineligible Receipts as used in this rule are that subset of the same Applicable Gross Receipts that arise from an ineligible activity described in OAR 123-065-4230(1), including but not limited to receipts that entail:

(a) Consumption by an end-user that is a member of the general public;

(b) Sales directly to a household or individual that is neither another business firm nor operating as such; and

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.135 & 285C.140
Hist.: EDD 5-1997, f. 4-14-97, cert. ef. 4-15-97; EDD 5-1998, f. 3-12-98, cert. ef. 3-15-98; EDD 9-2000, f. & cert. ef. 5-2-00, Renumbered from 123-065-0650; EDD 1-2005, f. & cert. ef. 2-25-05

123-065-4260

Local Option for Hotels, Motels and Destination Resorts

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

(a) Satisfy all applicable requirements; and

(b) Locate in a zone or portion of a zone where such firms are eligible under ORS 285C.070 (or section 56(1), chapter 662, Oregon Laws 2003), as described in section (2) or (3) of this rule.

(2) For subsection (1)(b) of this rule, allowable zones include at the time of the last amendment of this rule (subject to later revocation):

(a) The entire area of any one of the following 32 Enterprise Zones: Baker City/County, Bay Area, Cascade Locks/Hood River, CTUIR Tribal, Coquille Valley, Cottage Grove/Southern Lane County, Forest Grove, Fossil, Grant County, Grants Pass Area, Grande Ronde, Harney County/Burns/Hines, Harrisburg, Huntington, Jackson County, Josephine Champion, Klamath Falls/Klamath County, Lake County/Lakeview, Lower Columbia Maritime, Lower Umpqua, Malheur County, Molalla, Prineville/Crook County, Roberts Creek, St. Helens/Columbia City, Sherman County, South Douglas County, Sutherlin/Oakland, Sweet Home, The Dalles/Wasco County, Tillamook or Willow Creek Valley;

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

(d) The Lincoln County Enterprise Zone, except for areas in the incorporated territory of the cities of Depoe Bay and Lincoln City; and

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

(3) For subsection (1)(b) of this rule, an allowable zone includes but is not limited to a future enterprise zone that is acknowledged by Director in the order of designation as having opted to exempt such qualified property under ORS 285C.070 as described in OAR 123-065-1520(7).

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.070, 285C.135 & 285C.185
Hist.: EDD 9-2000, f. & cert.. ef. 5-2-00; EDD 1-2005, f. & cert. ef. 2-25-05; EDD 1-2007(Temp), f. & cert. ef. 1-8-07 thru 7-6-07; EDD 2-2007, f. 6-15-07, cert. ef. 7-1-07

123-065-4270

Call Centers

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

(1) A business firm and its operations are eligible, regardless of retail or financial services, if:

(a) They serve the firm's clients through computer, electronic, telephony or other telecommunication methods;

(b) Such customers of the firm's client are not contacted without some sort of prior elicitation, but rather the firm responds to an unsolicited order or other prior instruction, including but not limited to:

(A) Follow-up to pledge or expression of interest, which need not have been made to the firm itself;

(B) Checking with users of client-supplied goods or services, for example, to continue or renew recently expired membership, contract, etc.;

(D) Other comparable activities distinct from telemarketing; and

(c) No more than 10 percent of the customers or business transactions come from inside the local calling area, in which telephone calls are normally made to and from the firm's location in the enterprise zone without long distance telephone charges.

(2) The percentage in subsection (1)(c) of this rule is:

(a) First substantiated by a written explanation of the proposed operations by the firm or local zone manager in the application for authorization;

(b) Not predicated on the actual transaction or customer communication being conducted through a paid telephone call, but only on relative location, as if it were;

(c) Calculated by dividing the number of customers or transactions in the local calling area by the firm's total, arising from the operations in the zone; and

(d) Not dependent on precise calculation or verification, if the generally regional or national extent of the firm's activities allow for reasonable assumption of compliance, otherwise the firm shall provide specific evidence thereof.

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.135
Hist.: EDD 9-2000, f. & cert.. ef. 5-2-00; EDD 1-2005, f. & cert. ef. 2-25-05

123-065-4280

Headquarter Facilities

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

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

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

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

(c) In approving the application for authorization, the local zone manager includes a formal finding of the sponsor under ORS 285C.140(7), consistent with section (2) of this rule.

(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;

(b) State that the proposed investment is significant for the enterprise zone and the local economy; and

(A) Size of the firm's anticipated operations relative to local measures of commerce or economic size;

(B) Relative quantity or type of new employees or job opportunities associated with the investment;

(D) Enhancement or fulfillment of strategic, marketing or visibility objectives of the zone; or

(E) Immediate impacts of investment.

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

(4) The local zone manager may modify the formal finding prior to an authorized business firm qualifying for the exemption.

(5) For purposes of requirements described in OAR 123-065-4400 to 123-065-4499, as provided under ORS 285C.200(7)(b)(B), the employees working at a facility that is eligible only as described in this rule shall be counted apart from all other eligible employees of the firm.

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.135, 285C.140, 285C.180 & 285C.200
Hist.: EDD 9-2000, f. & cert.. ef. 5-2-00; EDD 1-2005, f. & cert. ef. 2-25-05

Standard Exemption: Authorization

123-065-4300

Definitions

(1) For purposes of OAR 123-065-4300 to 123-065-4399:

(a) Application means the latest revision of the Department of Revenue form 150-303-029, Oregon Enterprise Zone Authorization Application, inclusive of attachments.

(b) Approval Form means the latest revision of the Department of Revenue form 150-303-082, Oregon Enterprise Zone Authorization Approval.

(c) Firm/applicant means a business firm that is seeking to have an Application approved in order to be authorized in an enterprise zone as defined in ORS 285C.050(2).

(2) As used in ORS 285C.140(1), "eligible employees" means employees engaged in eligible activities or operations as described in OAR 123-065-4200 to 123-065-4299, who will be associated with the proposed investment or investments, for which the eligible business firm is applying for authorization.

(3) As used in ORS 285C.140(2), "estimate" and "estimated" mean current expectations of the owners, managers and executives of an eligible business firm, based on the best information available at the time, and shall not be construed as binding in and of themselves.

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.140
Hist.: EDD 5-1997, f. 4-14-97, cert. ef. 4-15-97; EDD 5-1998, f. 3-12-98, cert. ef. 3-15-98; EDD 9-2000, f. & cert. ef. 5-2-00, Renumbered from 123-065-0700; EDD 1-2005, f. & cert. ef. 2-25-05

123-065-4310

Applying for Authorization

For purposes of ORS 285C.140(1):

(1) In applying for authorization with the sponsor of an enterprise zone and the county assessor, the Firm/applicant shall:

(a) Fill out the Application as completely as the Firm/applicant is capable of doing;

(b) Have the Application signed and dated by an owner, executive officer or legally authorized representative of such an owner or officer of the Firm/applicant; and

(2) In order for the sponsor to accept the Application from the Firm/applicant for potential approval, all of the actions described in section (1) of this rule must happen before:

(a) The Firm/applicant's hiring of any eligible employee to qualify under ORS 285C.200; and

(b) Any physical work, such as construction or reconstruction of a building or structure, construction of an addition or modifications to an existing building or structure, or installation of machinery or equipment, comprising all or part of the qualified property, for which the Firm/applicant proposes to claim the exemption under ORS 285C.175.

(3) Physical work for purposes of subsection (2)(b) of this rule includes site preparation that leads directly to construction, modification or installation of qualified property, such as fill, grading or leveling on raw land or the installation of underground utilities and utility connections, and as such the following are not included:

(a) Offsite development; or

(b) On-site preparations that are incidental or unrelated to the subsequent work on qualified property, such as prior improvements to the land, for example, in order to:

(A) Ready it for sale or for another project that did not go forward;

(B) Prevent erosion or otherwise maintain the land in good condition; or

(4) A faxed, e-mailed or similarly furnished copy of the Application may be used in lieu of subsection (1)(c) of this rule, if the copy is:

(a) Received by the zone sponsor before the time described in section (2) of this rule;

(b) Promptly followed up by a hard-copy, signed original to the local zone manager; and

(5) Zone officials may verify conformity with this rule, as necessary, by:

(a) Final documents for transfer of ownership, sale closing or execution of a lease;

(b) Building permit or contract;

(d) Similar forms of written and independently substantiated proof.

(6) The Firm/applicant shall pay an authorization filing fee, if directed to do so by the local zone manager, as described in OAR 123-065-0220.

(7) In the event that the local zone manager does not timely receive an Application as described in this rule, the manager may still accept it if the Firm/applicant produces dated evidence to the satisfaction of the zone manager and assessor that the Application was sent in a timely manner.

(8) In the event that an Application is appropriately replaced under ORS 285C.140(3) or otherwise, the original submission date of the previously completed Application may be used to satisfy sections (1) and (2) of this rule if the originally proposed investment would have served comparable business purposes.

(9) OAR 123-065-4313 lists exceptions to section (2) of this rule.

Stat. Auth.: ORS 285A.075, 285C.060(1) & 285C.140(1) & (12)
Stats. Implemented: ORS 285C.140 & 285C.145
Hist.: EDD 4-1994, f. & cert. ef. 2-24-94; EDD 3-1996, f. & cert. ef. 4-2-96, Renumbered from OAR 123-065-0060; EDD 5-1997, f. 4-14-97, cert. ef. 4-15-97; EDD 5-1998, f. 3-12-98, cert. ef. 3-15-98; EDD 9-2000, f. & cert. ef. 5-2-00, Renumbered from 123-065-0710; EDD 1-2005, f. & cert. ef. 2-25-05; EDD 1-2007(Temp), f. & cert. ef. 1-8-07 thru 7-6-07; EDD 2-2007, f. 6-15-07, cert. ef. 7-1-07

123-065-4313

Late Application Submission

For purposes of applying for authorization in an enterprise zone:

(1) An Application may be accepted after certain physical work, in accordance with OAR 150-285C.180(3)(b), and/or if the physical work consists only of:

(a) Demolition, cleanup and so forth;

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

(c) Construction or the like that occurred and completely ceased six months or longer beforehand (insofar as any such unfinished property was not assessed before the effective date of the enterprise zone's designation or relevant boundary change).

(2) The Application may be accepted after the commencement of hiring or physical work (but not later than December 31 immediately before the first year in which the exemption under ORS 285C.175 is initially claimed) if it:

(a) Is approved in accordance with OAR 123-065-4315 for a building/structure that is bought or leased by the Firm/applicant; or

(b) Replaces a previously submitted Application, consistent with OAR 123-065-4310(8), for any of the following reasons:

(A) To account for a change in the Firm/applicant's name, nature and so forth;

(B) To recognize a change in ownership of property as described in OAR 123-065-4380; or

(C) To effect extensive amendment or corrections to information in the original Application, including but not limited to a change in the location of qualified property within the same zone.

(3) Under ORS 285C.140(11) and (12), an Application may be accepted after the commencement of hiring or physical work, if it is approved before the qualified property is subject to property taxes:

(a) As specifically allowed in an administrative rule in this division or in chapter 150; or

(b) Pursuant to a waiver issued by the Department of Revenue consistent with OAR 150-285C.140(12).

(4) Physical work or hiring may even be completed when the Application is submitted as described in section (2) or (3) of this rule.

(5) This rule does not:

(a) Necessarily allow property previously assessed for taxation inside the zone to be exempt under ORS 285C.170 or 285C.175 (even if that is possible for other reasons, see OAR 123-065-4540).

(b) Relieve the Firm/applicant of any requirement, procedure, deadline or the like related to:

(A) Being authorized under ORS 285C.140;

(B) Renewing the authorization under ORS 285C.165; or

Stat. Auth.: ORS 285A.075, 285C.060(1) & 285C.140(12)
Stats. Implemented: ORS 285C.140 & 285C.145
Hist.: EDD 1-2005, f. & cert. ef. 2-25-05

123-065-4315

Authorization with Newly Acquired Buildings

A qualified building, structure or portion thereof may receive an enterprise zone exemption even if construction, reconstruction or modifications commenced prior to submission of the relevant Application, such that under ORS 285C.145(2):

(1) The submission and approval of the Application must occur before the Firm/applicant begins to actually use or occupy any portion of the building or structure for commercial operations.

(2) The Firm/applicant shall include a copy of an executed lease or purchase agreement for the qualified building or structure with the Application, in order for the Application to be approved.

(3) This rule does not apply to the following:

(a) Any machinery or equipment, in that installation of machinery or equipment must commence after submission of the Application, except for newly installed real property machinery or equipment that is included in the same lease or sales contract as the building or structure;

(b) Buildings or structures that are or were actually owned or leased by the Firm/applicant at any time before the commencement of construction, reconstruction or modifications; or

(c) A Firm/applicant that has any familial, employment, corporate or other such entity relationship with the (prior) owner of the building or structure.

(4) A building or structure that is authorized as described in this rule may be granted the exemption under ORS 285C.175, even though it had been previously assessed for taxation, if:

(a) Assessment did not precede the effective date of the enterprise zone's designation or relevant boundary change;

(b) The building, structure or applicable portion thereof has not previously been used or occupied; and

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.140 & 285C.145
Hist.: EDD 5-1997, f. 4-14-97, cert. ef. 4-15-97; EDD 5-1998, f. 3-12-98, cert. ef. 3-15-98; EDD 9-2000, f. & cert. ef. 5-2-00, Renumbered from 123-065-0750; EDD 1-2005, f. & cert. ef. 2-25-05

123-065-4318

Amending the Application

Whether before or after approval under ORS 285C.140(6), an Application may be amended:

(1) Such amendment by the Firm/applicant through written explanation to the local zone manager and county assessor is strongly encouraged, whenever information in the submitted Application is significantly inaccurate because of:

(a) An inadvertent error or omission;

(b) A change in plans; or

(2) An amendment is not usually necessary to secure an exemption under ORS 285C.170 or 285C.175 on qualified property, as information in the Application about property and timing does not serve a regulatory function, but it does need to be revised if it:

(a) Materially misstates the existing employment of the firm in the zone (or at sites within 30 miles from which jobs will be transferred) such that a revised, lower figure must be clearly substantiated;

(b) Gives the wrong location for the property;

(c) Describes or estimates the value of qualified property in a way that will be substantially inconsistent with the actual investment, but only in relation to OAR 123-065-4280(3) or 123-065-8400(2); or

(d) Does not in any way identify a general type of otherwise qualified property that will be part of the actual investment, per 123-065-4355(2) and (3).

(3) Notwithstanding the fact that failure to amend the Application may prevent an exemption under ORS 285C.175 on all or only certain otherwise qualified property, no amendment may occur after December 31 immediately before the first year, in which the exemption is initially claimed.

(4) An authorization renewal statement under ORS 285C.165 shall include appropriate revisions to information in the Application, especially with respect to anticipated timing for the investment.

(5) Once the Application is approved, and the Firm/applicant is authorized, such an amendment may not be used to make or alter a determination, waiver, extension or the like under ORS 285C.150, 285C.155, 285C.160, 285C.200(2) and 285C.205.

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.140, 285C.145, 285C.165, 285C.180 & 285C.220
Hist.: EDD 1-2005, f. & cert. ef. 2-25-05

123-065-4320

Processing of Application by Local Zone Manager

Following submission of an Application:

(1) The local zone manager may collect an authorization filing fee as described in OAR 123-065-0220.

(2) The local zone manager shall deny the Application if finding that:

(a) The Firm/applicant does not fulfill any basis for eligibility under ORS 285C.135;

(b) The Firm/applicant is unwilling or unable to unambiguously commit to an action/obligation as required under ORS 285C.140(2);

(d) Location of proposed qualified property is outside the enterprise zone boundary and no relevant boundary change is pending (or possible); or

(e) Other reason that precludes authorization.

(3) When authorization is denied per section (2) of this rule, the local zone manager shall within 15 business days of the denial:

(a) Refund any authorization filing fee that was paid;

(b) Write a letter to the Firm/applicant that justifies the denial;

(d) Ensure that the letter:

(A) Is sent to the Firm/applicant through certified mail or in such a way that the date of receipt can be verified; and

(B) Contains information on the Firm/applicant's rights of appeal under ORS 305.404 to 305.560 to the Magistrate Division of the Oregon Tax Court.

(4) If there is no apparent reason to deny authorization, per section (2) of this rule, then the local zone manager shall conduct a preauthorization consultation and prepare a summary about it, as described in OAR 123-065-4323 and 123-065-4325.

(5) With respect to a sponsor's failing to authorize under ORS 285C.140(9), a Firm/applicant may proceed with an appeal after 30 days following the submission of the Application, if no formal action is yet to be taken as described in this rule or in response to special circumstances, such as those indicated in OAR 123-065-4340(4) and (5).

123-065-4323

Pre-Approval Consultations

The preauthorization consultation under ORS 285C.140(4) is a trouble-shooting exercise to increase the certainty of a Firm/applicant's compliance with enterprise zone requirements through anticipatory issue-identification and preparations for verification:

(1) The consultation must occur after:

(a) A substantially complete Application is available for review; and

(b) Providing notice and reasonable opportunity for the county assessor's office to participate, according to local practices and understandings.

(2) The consultation may be:

(a) Conducted informally, by conference call and so forth for purposes of convenience and expediency;

(b) Handled by an assistant or designee of the local zone manager;

(d) Undertaken (and summarized) in the same context and more or less simultaneously with the completion and submission of the Application or subsequent processing of the Approval Form.

(3) Besides concerns about the Firm/applicant's eligibility or suitability for authorization, the consultation shall address matters affecting future qualification, including but not limited to the following:

(a) Request for extended abatement or other special cases as described in OAR 123-065-4328(2) or (3) or 123-065-4340(4) or (5), if germane;

(b) Confirmation of the computed annual average employment before the Application's submission;

(c) Level of confidence that new hiring (and compensation if applicable) will satisfy minimum requirements for employment of the firm in the zone:

(A) To initially qualify; and

(B) Throughout the exemption period;

(d) Arrangements for Firm/applicant to enter into a first-source hiring agreement under ORS 285C.215 as described in division 070 of these administrative rules;

(e) Adequacy of descriptions of proposed qualified property for purposes of OAR 123-065-4355(1) to (3);

(f) Specific, relevant restrictions for what comprises 'qualified property' that may be exempt, such as cost minima or required lease provisions; and

(g) Submissions or filings under ORS 285C.165, 285C.170, 285C.220 and 285C.225 to:

(A) Renew unused authorization after two years;

(B) Exempt qualified property assessed while in the process of construction/installation (see OAR 123-065-4800); and

(4) The local zone manager/designee shall also contact and consult with:

(a) Any local provider of emergency or other services, other than an agency of a sponsoring government, for which the manager reasonably expects the Firm/applicant's proposed investment in qualified property to create special needs or safety factors. (Local arrangements established per OAR 123-065-1080 with comparable purpose supersede this subsection)

(b) The Department, if any of the following (potential) problems surface:

(A) The investment in the zone could relate to the decrease and transfer of employment from another place in this state outside that zone;

(B) Firm/applicant might wish/need to delay or avoid entering into a first-source hiring agreement;

(D) Site is outside current zone boundary, whether or not a boundary change is possible or pending; or

(E) An especially unusual situation.

(5) If the Firm/applicant's proposed qualified property will be subject to central assessment as 'utility property,' the local zone manager or assessor shall contact the Department of Revenue and advise the Firm/applicant that no exemption applies while construction is underway.

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.140, 285C.150, 285C.155, 285C.160, 285C.180, 285C.l85, 285C.200, 285C.210, 285C.215, 285C.220, 285C.225 & 285C.230
Hist.: EDD 1-2005, f. & cert. ef. 2-25-05; EDD 1-2007(Temp), f. & cert. ef. 1-8-07 thru 7-6-07; EDD 2-2007, f. 6-15-07, cert. ef. 7-1-07

123-065-4325

Written Summation

For the summary under ORS 285C.140(5), pursuant to the preauthorization consultation:

(1) The local zone manager or designee shall prepare a brief record of the consultation and see that it attached to or included with the Application.

(2) For most proposed enterprise zone investments that are technically unremarkable and are fully expected to generate ample new employment, the summary will need to do little more than indicate the apparent absence of significant issues, as well as when and with whom the consultation occurred.

(3) It is recommended that the summary always mention the checking of certain critical issues, including but not limited to the following:

(a) The accuracy, contiguity and in-zone location of the site identified in the Application;

(b) Firm/applicant's awareness and (non-) interest in an extended tax abatement under ORS 285C.160;

(d) Expected timing and process for obtaining a first source hiring agreement (and that county assessor will be notified otherwise); and

(e) Whether or not only a portion of a building or structure will be subject to exemption under ORS 285C.180(5), because parts/units of the property will:

(A) House ineligible activities;

(B) Have separate lease or ownership; or

(4) For any unusual circumstance, concern about compliance or the like, as identified in the consultation, the summary shall note relevant follow-up, duties and contingencies, including but not limited to:

(a) Reason for special attention;

(b) Next steps, subsequent process and so forth;

(d) Who does what; and

(e) When steps, corroboration or communications (to the county assessor's office) are expected to occur, such as before or at the time:

(A) Approval Form is finalized;

(B) Construction, modification or installation of property is either commenced or completed; or

(5) For example, if there is some doubt about the future increase in employment of the Firm/applicant, the summary might run through the following:

(a) How the expected increase could be close to or difficult to discern relative to required minimum;

(b) The records or reports that the Firm/applicant will assemble or produce to demonstrate its eligible employment in the zone:

(A) After authorization but on or before April 1 of the first exemption year; and

(B) As an annual average during exemption period;

(d) Further communication or confirmation by the local zone manager or Firm/applicant, as the county assessor could/would request or need with the filing of exemption claims.

123-065-4328

Approval by Local Zone Manager

After the preauthorization consultation and the attachment of the written summary:

(1) The local zone manager shall approve the Application in order to authorize the Firm/applicant under ORS 285C.140(6), unless determining to deny it as described in OAR 123-065-4320(2) and (3).

(2) For any special case of eligibility, the local zone manager shall address relevant matters as described in OAR 123-065-4240 or shall attach to the Application any finding or explanation needed for OAR 123-065-4250, 123-065-4270 or 123-065-4280.

(3) If the Firm/applicant's proposed investment in qualified property will be located in an urban enterprise zone that imposes additional conditions under ORS 285C.150 in effect at the time of authorization, the local zone manager shall:

(a) Approve the Firm/applicant for authorization, only if the Firm/applicant has made acceptable commitments to satisfy such conditions; and

(b) Include a standardized attachment to the Application documenting the commitments of the Firm/applicant as described in OAR 123-065-0230.

(4) Within five business days of approval, the local zone manager shall:

(a) Fill out and sign the Approval Form except for the section pertaining to the county assessor;

(b) See that the county assessor is furnished with the Approval Form and a copy of the Application (with all current attachments);

(d) Inform the local contact agency for the first-source hiring agreement as described in division 070 of this chapter of administrative rules; and

(e) Send a standardized advisory to all local taxing districts that levy taxes on property within the zone and to the Special Districts Association of Oregon (Attn: Government Affairs), providing a basic description of the proposed project's location, size and other relevant attributes. This advisory may also include other information such as readily available, existing data that could serve to foster better understanding about approximate economic and revenue impacts over the long term. (Local arrangements established per OAR 123-065-1080 with comparable purpose supersede this subsection).

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.135, 285C.140, 285C.150 & 285C.215
Hist.: EDD 1-2005, f. & cert. ef. 2-25-05; EDD 1-2007(Temp), f. & cert. ef. 1-8-07 thru 7-6-07; EDD 2-2007, f. 6-15-07, cert. ef. 7-1-07

123-065-4330

Processing by County Assessor

For purposes of completing the Approval Form:

(1) The county assessor shall approve or deny the Application in accordance with ORS 285C.140(6) within a reasonable period after receiving the Approval Form from the local zone manager.

(2) Within five business days of taking action as described in section (1) of this rule, the county assessor shall:

(a) Enter a signature and date in the appropriate place on the Approval Form;

(b) Verify the information on the Approval Form as it pertains to future steps required for the eligible business Firm/applicant to qualify;

(d) Return the remainder of the Approval Form to the local zone manager.

(3) In the event that authorization is denied for any reason as described in OAR 123-065-4320(2), the county assessor shall include a written explanation with the materials returned to the local zone manager.

(4) For purposes of this rule, authorized county assessment staff may act on behalf of the county assessor.

(5) The county assessor may refuse to approve the Application on condition of:

(a) Seeing a finalized version of any applicable item as described in OAR 123-065-4340(5); or

(b) Receiving other reasonably critical information from the Firm/applicant or zone sponsor, including but not limited to the resolution of a question or concern that arose in the preauthorization consultation.

123-065-4340

Final Processing of Application

With the completion of an Approval Form by both the local zone manager and county assessor:

(1) The local zone manager shall have a photocopy made of the Approval Form (with original signatures) for the records of the enterprise zone sponsor.

(2) Within five business days, the local zone manager shall see that the Firm/applicant is informed of the action taken by the county assessor relative to OAR 123-065-4330(1).

(3) If the county assessor denied the Firm/applicant's authorization, the local zone manager or county assessor shall within 15 business days of the denial:

(a) Refund any authorization filing fee that was paid.

(b) Have the respective top and colored copies of the Approval Form and the county assessor's written explanation distributed to the:

(A) Firm/applicant;

(B) Department of Revenue;

(D) Local contact agency for the first-source hiring agreement.

(c) Ensure that the information for paragraph (b)(A) of this section is sent to the Firm/applicant through certified mail or in such a way that the date of receipt can be verified.

(4) If the Firm/applicant requested an extended period of tax abatement from the sponsor of the enterprise zone under ORS 285C.160, the local zone manager shall:

(a) Delay final processing or distribution of the Application and Approval Form until either the written agreement has been approved as described in OAR 123-065-4120 or the zone sponsor has rejected the request;

(b) Fill in the relevant space in the Application if the request is accepted; and

(c) Provide a copy of the Application as revised per subsection (b) of this section to the Firm/applicant and (as necessary) to the county assessor.

(5) The local zone manager shall have copies of the following documents attached to the Application and (as necessary) provided to the county assessor:

(a) Written agreement between the sponsor of the enterprise zone and the Firm/applicant, if the period of property tax abatement is to be longer than three years under ORS 285C.160 and 285C.175(2)(b);

(b) Resolution or resolutions of the governing body or bodies of the zone sponsor under ORS 285C.155 for a local waiver of the employment increase requirement (see OAR 123-065-4450); or

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.140, 285C.145, 285C.155 & 285C.160
Hist.: EDD 5-1997, f. 4-14-97, cert. ef. 4-15-97; EDD 5-1998, f. 3-12-98, cert. ef. 3-15-98; EDD 9-2000, f. & cert. ef. 5-2-00, Renumbered from 123-065-0740; EDD 1-2005, f. & cert. ef. 2-25-05

123-065-4345

Authorization

Subject to both the local zone manager and county assessor approving the application, and to any special issue related to OAR 123-065-4325 or 123-065-4340(4) and (5) being wrapped up:

(1) The local zone manager shall have the respective top and colored copies of the Approval Form distributed in a timely fashion to the:

(a) Firm/applicant;

(b) Department of Revenue;

(d) Local contact agency for the first-source hiring agreement.

(2) Distributions for subsection (1)(a), (b) or (c) shall include copies of the Application and attachments as appropriate or requested.

(3) For purposes of ORS 285C.050 to 285C.250 and this division of administrative rules, the Firm/applicant is not officially authorized until fulfillment of section (1) of this rule.

(4) To receive an exemption under ORS 285C.170 while work is in progress, such authorization must have occurred, although the Firm/applicant may apply as described in OAR 123-065-4800 and receive exemption under ORS 307.330.

(5) In order for the eligible business firm to be granted the exemption under ORS 285C.175:

(a) The zone sponsor/county assessor shall authorize the firm before it files its initial claim for exemption with property schedule under ORS 285C.220 and 285C.225.

(b) Such an exemption claim may be provisionally filed pending authorization that has been delayed for extenuating circumstances that are no fault of the Firm/applicant, but authorization must occur before the firm may qualify for the exemption.

Stat. Auth.: ORS 285A.075) & 285C.060(1)
Stats. Implemented: ORS 285C.140, 285C.170, 285C.175, 285C.220 & 285C.225
Hist.: EDD 1-2005, f. & cert. ef. 2-25-05

123-065-4355

Authorization's Effect on Exemption

Authorization is primarily intended to establish and address critical issues related to a Firm/applicant's knowledge of the enterprise zone, the eligibility of its business activity, existing employment level and so forth, and as such, property is not being 'authorized' for exemption under ORS 285C.170 or 285C.175. However:

(1) Under ORS 285C.180(2)(e), otherwise qualified property may be exempt only if located as indicated in the Application, such that this location:

(a) Must represent a single area of operation;

(b) May encompass a complex of contiguous lots or parcels of land or a comparably proximate set of multiple sites; and

(2) An authorized business firm's exemption is not normally restricted by what is or is not contained in the Application's description or estimated value of qualified property to be constructed, added, modified or installed, but there are two exceptions where the description really matters:

(a) Special cases in relation to OAR 123-065-4280(3) or 123-065-8400(2), in which substantial consistency is required; and

(b) As described in section (3) of this rule (except for qualified property of a firm engaged in electronic commerce in a so-designated area).

(3) Under ORS 285C.180(2)(f) and consistent with section (2) of this rule, the following property may not be exempt, if not at least generically identified in the Application's description:

(a) A distinct building or structure for which the cost of construction, reconstruction or modifications is $50,000 or more.

(b) A basic category of property, regardless of cost, in that something must be included in terms of:

(A) Newly constructed buildings/structures;

(B) Additions to or modifications to existing buildings, structures or portions thereof;

(D) Modifications to real property machinery or equipment under ORS 285C.190; or

(E) Newly installed personal property.

(4) For purposes of this rule, information in the Application shall be used either as originally submitted or as amended consistent with OAR 123-065-4318.

(5) The Application provides for the exemption of qualified property, as otherwise allowed by this rule, over not more than three successive years under ORS 285C.225(2)(b), such that:

(a) Once an exemption is claimed and granted pursuant to the Application, subsequent exemptions may be claimed pursuant to the same Application only in one or both of the next two years;

(b) Such exempt additional qualified property must be placed in service during the first or second year of the initial exemption;

(c) Additional qualified property covered by each such subsequent exemption must be included in a property schedule filed with the exemption claim for that and the prior property; and

(d) Each exemption as described in this section shall enjoy its own exemption period of equal length, and they shall overlap.

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.140, 285C.170, 285C.175, 285C.180, 285C.185, 285C.l90, 285C.220 & 285C.225
Hist.: EDD 1-2005, f. & cert. ef. 2-25-05

123-065-4365

Further Applications

Although amendment of a single existing Application as described in OAR 123-065-4218 is encouraged to minimize the number of Applications that an authorized business firm has outstanding, a firm may be concurrently approved for two or more Applications. Moreover:

(1) Authorization under another Application is necessary for situations that may not be dealt with by a single Application, as described in OAR 123-065-4355, such as investments in qualified property:

(a) At more than one distinct location in the enterprise zone;

(b) Beyond the three-year time frame; or

(c) That are not adequately described in terms of representation by a basic class of property (or where substantial consistency is demanded) and the first assessment date for the initial exemption has occurred.

(2) For any subsequent Application even if for proposed property at the same site:

(a) It must be timely submitted, as described in OAR 123-065-4310 and 123-065-4313; and

(b) It establishes unique employment criteria under ORS 285C.200 and 285C.210 for exempting qualified property, with which it is specifically associated (see OAR 123-065-4480).

(3) Neither OAR 123-065-4318, 123-065-4355 nor this rule shall be construed in any way as prohibiting an exemption on qualified property of a properly authorized business firm as otherwise allowed under ORS 285C.050 to 285C.250.

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.140, 285C.170, 285C.175, 285C.180, 285C.185, 285C.l90, 285C.220 & 285C.225
Hist.: EDD 1-2005, f. & cert. ef. 2-25-05

123-065-4375

Renewal of Active Status

Under ORS 285C.165 an eligible business firm's authorization in an enterprise zone becomes 'inactive' after more than two years, such that:

(1) The authorization remains active for:

(a) The remainder of the year after the Application is fully approved as described in OAR 123-065-4345;

(b) The two-year period that immediately follows; and

(c) Each two-year period directly thereafter, subject to a statement of renewal as described in subsection (2)(b) of this rule.

(2) Authorization remains 'active' if immediately after the timeframe, as described in section (1) of this rule, the actively authorized business firm:

(a) Files under ORS 285C.220 and 285C.225 to claim the exemption on qualified property that was placed in service during such timeframe, pursuant to the Application; or

(b) Submits a written statement between January 1 and April 1 (as promptly received by both the local zone manager and the county assessor's office) that:

(A) Comes from and is endorsed by the firm consistent with authority required for Application;

(B) Says/affirms that the firm still intends to complete its proposed investment in qualified property inside the zone and to claim the exemption;

(C) Revises or amends information in the Application with respect to at least the expected timing of investment activities; and

(D) Formally accepts a resetting of the county average annual wage applicable to any compensation standard as described in OAR 123-065-4100(1)(b)(B).

(3) An inactively authorized business firm retains its right to claim the exemption after the timeframe described in section (1) of this rule, but letting active status lapse has the following consequences:

(a) The claim must be accompanied by the filing fee under ORS 285C.165(3); and

(b) The county average annual wage applicable to any compensation standard is reset as described in OAR 123-065-4100(1)(b)(C).

(4) Moreover, an inactively authorized business firm may not receive exemption under ORS 285C.170, while qualified property is in the process of construction, modification or installation, but it may still seek exemption under applicably comparable provisions of ORS 307.330 and 307.340.

(5) This rule no longer applies once:

(a) Exemption is granted under ORS 285C.175; or

(b) The zone terminates under ORS 285C.245 (see OAR 123-065-4600 to 123-065-4649).

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.140, 285C.170, 285C.175, 285C.180, 285C.185, 285C.l90, 285C.220 & 285C.225
Hist.: EDD 1-2005, f. & cert. ef. 2-25-05

123-065-4380

Selling or Leasing of Property by Authorized Firms

(1) If ownership of an authorized business firm changes hands, the relevant rights and requirements of authorization automatically transfer along with ownership of the firm, regardless of a change in the name or mailing address of the firm.

(2) Subject to amendment of the Application, an eligible business firm that purchases or leases qualified property owned or leased by an actively authorized business firm may claim the exemption under ORS 285C.220 and 285C.225.

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.140, 285C.175, 285C.220 & 285C.225
Hist.: EDD 5-1997, f. 4-14-97, cert. ef. 4-15-97; EDD 5-1998, f. 3-12-98, cert. ef. 3-15-98; EDD 9-2000, f. & cert. ef. 5-2-00, Renumbered from 123-065-0780; EDD 1-2005, f. & cert. ef. 2-25-05; EDD 1-2007(Temp), f. & cert. ef. 1-8-07 thru 7-6-07; EDD 2-2007, f. 6-15-07, cert. ef. 7-1-07

Standard Exemption: Employment of Firms

123-065-4400

Definitions

(1) As used in ORS 285C.050 to 285C.250, "employee" means a position or person under ORS 285C.050(7), as explicated in OAR 123-065-4060 (and not otherwise excluded by section (2) of this rule), who:

(a) Is employed directly by the eligible business firm as defined in ORS 285C.050(6); or

(b) Works for and was individually selected by the firm, but whose services are retained through a lease or contract with the person or third-party employer.

(2) As used in ORS 285C.200 and 285C.210, "employees of the firm" or "employment of the firm" includes employees except for those who are:

(a) Working 32 hours or less per week;

(b) Hired, leased or contracted for on a seasonal basis or for less than a year's time;

(c) Expected to be temporarily employed with the firm, including but not limited to persons acquired and receiving compensation through an outside agency on a short-term or as-needed basis;

(d) Engaged solely in the construction, modification or installation of qualified property;

(e) Regularly performing their work for the firm at a site located outside the boundary of the enterprise zone (For purposes of OAR 123-065-4420(5) or 123-065-4430(5), though, all employees at relevant sites within 30 miles of the zone boundary are considered); or

(f) Spending the majority of their time working in ineligible operations that:

(A) Are not associated with permitted activities described in OAR 123-065-4230(2); or

(B) Do not directly support eligible operations of the firm consistent with OAR 123-065-4230(4).

(3) Consistent with subsection (2) of this rule, only persons indefinitely hired for a permanent position that exists year-around at an eligible business firm's operations in the enterprise zone are normally counted. However, for purposes of OAR 123-065-4420 or 123-065-4430, temporary workers filling permanent positions may be counted, if the county assessor and the local zone manager conclude that:

(a) The 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 are not hired permanently by the firm, because they do not meet reasonable minimum hiring standards of the firm, such as a high school diploma or equivalency.

(4) For purposes of OAR 123-065-4400 to 123-065-4499 (see123-065-4410):

(a) Annual Employment means the employment of the firm as averaged over the course of an assessment (calendar) year of exemption under ORS 285C.175.

(b) Claim Employment means the actual employment of the firm on the date when an exemption claim is filed under ORS 285C.220 or the corresponding April 1, whichever is earlier.

(c) Existing Employment means the employment of the firm as averaged over the 12 months preceding the date on which the authorization application is submitted under ORS 285C.140.

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.050, 285C.200 & 285C.210
Hist.: EDD 14-1997, f. & cert. ef. 12-4-97; EDD 9-2000, f. & cert. ef. 5-2-00, Renumbered from 123-065-0800; EDD 1-2005, f. & cert. ef. 2-25-05

123-065-4410

Computation of Average Employment

(1) Annual Employment or Existing Employment is calculated such that:

(a) The actual employment of the firm at the end of each period (such as pay periods, calendar months or quarters of a year) that concludes during either the assessment year or the 12-month interval before the application for authorization shall be summed and then divided by the total number of periods.

(b) Periods longer than a quarter of a year may not be used in averaging employment, and such quarters of a year that may be used shall begin on the first of January, April, July and October.

(2) For purposes of determining Existing Employment relative to the submission of the application for authorization:

(a) The time when applicable physical work began shall be used instead of the submission date, whenever appropriate or necessary for special situations arising with OAR 123-065-4310 and 123-065-4313 other than123-065-4315.

(b) If such physical work has not yet begun, an authorized business firm may submit a replacement authorization application to establish a lower level of Existing Employment; otherwise, the number from the original submission date must be used.

(c) The computed level may be revised to correct for a miscalculation as described in OAR 123-065-4318, including but not limited to erroneous counting of part-time, temporary, seasonal or ineligible employees.

(d) After the first (January-1) assessment date for exemption under ORS 285C.175, Existing Employment may be altered only to correct for a gross error, subject to a formal finding of good cause by the Department.

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.140, 285C.200 & 285C.210
Hist.: EDD 14-1997, f. & cert. ef. 12-4-97; EDD 9-2000, f. & cert. ef. 5-2-00, Renumbered from 123-065-0810; EDD 1-2005, f. & cert. ef. 2-25-05

123-065-4420

Employment Requirements to Qualify

In order to receive and begin an exemption from taxation on qualified property in an enterprise zone under ORS 285C.175, an authorized business firm must qualify by filing under ORS 285C.220 and 285C.225 (as described in OAR 123-065-4560), such that:

(1) The initial Claim Employment must equal or exceed the greater of one plus or 1.1 times the 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 prior to January 1 but after the application of authorization, as explained in an attachment to the claim form)

(2) For a subsequent exemption on additional qualified property pursuant to the same authorization application, as described in OAR 123-065-4355(5), the requirement of section (1) of this rule is already satisfied and does not need to be met again.

(3) Required employment levels may be satisfied only through newly created jobs, which do not include any employees associated with a merger with another business firm or the purchase of another firm's operations or property, except for positions of the other firm that were vacant for more than 60 days at the time of the purchase or merger and were otherwise not reasonably expected to be reinstated.

(4) 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 of the authorized business firm, unless the requirement was waived by the sponsor of the enterprise zone under ORS 285C.155 and 285C.200(2) as described in OAR 123-065-4450.

(5) Under ORS 285C.200(5), if any employees, jobs or positions are transferred into the enterprise zone from a site that is outside but within 30 miles of the zone's boundary, then an additional requirement must be met with respect to section (1) of this rule, such that the respective definitions for Claim Employment and Existing Employment are also broadened to include employees located at any such site, as well as those inside the zone, unless the transfer occurred entirely:

(a) Before the application for authorization; or

(b) After April 1 of the first filing to claim the exemption on qualified property.

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.050, 285C.175, 285C.200, 285C.220 & 285C.225
Hist.: EDD 14-1997, f. & cert. ef. 12-4-97; EDD 9-2000, f. & cert. ef. 5-2-00, Renumbered from 123-065-0820; EDD 1-2005, f. & cert. ef. 2-25-05

123-065-4430

Maintaining Sufficient Employment

For purposes ORS 285C.200(1)(e) and 285C.210, a qualified business firm shall report to the county assessor and the local zone manager under ORS 285C.220 (as described in OAR 123-065-4570, directly after each calendar year while the enterprise zone exemption is received), such that:

(1) Failure occurs if any of the following is not true (unless waived under ORS 285C.155 and 285C.200):

(a) The latest Annual Employment equals or exceeds the greater of one plus or 1.1 times the Existing Employment;

(b) The current Claim Employment is not less than 15 percent of any previous Claim Employment; or

(c) The current Claim Employment and the one from the prior year's claim form are both not less than 50 percent or more of any previous Claim Employment.

(2) If failure occurs relative to section (1) of this rule, then the qualified business firm shall notify both the local zone manager and the county assessor in writing at the latest by July 1 of the year after the year in which the failure occurred, which may be:

(a) Satisfied through the filing of the exemption claim under ORS 285C.230(5).

(b) Accomplished by the owner of any qualified property that is leased by the qualified business firm.

(3) Notification of failure as described in section (2) of this rule shall result in the loss of the tax abatement covered by the same requirement pursuant to the same authorization application, such that either:

(a) The firm reimburses to the enterprise zone sponsor the amount of property taxes exempted in the year, in which failure occurred, under ORS 285C.240(6), as described in OAR 123-065-4950 to 123-065-4999; or

(b) The assessor disqualifies the firm under ORS 285C.240, including:

(A) Loss of future years of the exemption; and

(B) Retroactive payment with the next tax bill of applicable back taxes.

(4) If failure is discovered by the assessor or zone sponsor, but there is not timely notification as described in section (2) of this rule, then disqualification as described in subsection (3)(b) of this rule shall include the 20-percent penalty under ORS 285C.240(4) on back taxes.

(5) Consistent with the conditions in OAR 123-065-4420(5), an additional requirement must be met with respect to section (1) of this rule but only for the first year of exemption, such that the respective definitions for Annual Employment, Claim Employment and Existing Employment are also broadened to include employees located at any such site outside but within 30 miles of the zone's boundary, as well as jobs inside the zone.

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.200, 285C.210, 285C.220, 285C.230 & 285C.240
Hist.: EDD 14-1997, f. & cert. ef. 12-4-97; EDD 9-2000, f. & cert. ef. 5-2-00, Renumbered from 123-065-0830; EDD 1-2005, f. & cert. ef. 2-25-05

123-065-4440

Diminishing Employment outside the Zone

Under ORS 285C.200(1)(d), (4) and (5), an authorized business firm seeking an exemption in any enterprise zone may not qualify or remain qualified if the firm transferred operations into the enterprise zone in association with closures, curtailment of operations, downsizing, employment reductions, layoffs or job losses anywhere else in this state, unless:

(1) Any such originating location is 30 miles or less from the boundary of the zone, in which the business firm is seeking the exemption, and the firm meets the requirements under ORS 285C.200(5) and 285C.210(2)(c) described in OAR 123-065-4420(5) and 123-065-4430(5).

(2) The firm demonstrates, with or without the assistance of the zone sponsor, to the satisfaction of the county assessor or the Department that any closure/job losses more than 30 miles from the zone:

(a) Occurred entirely before the time of application for authorization;

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

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

(d) Pertain to business operations that the firm does not control in any way through common ownership, corporate affiliation or contracts governing relevant operations or through other comparable intra/inter-firm relationships;

(e) Are completely unrelated to investments in the zone, such that the curtailed operations or jobs are not being transferred into the zone and would have occurred anyway; or

(f) Have only de minimis impact on the local economy, in that the job losses are less than one-tenth of 1 percent (0.1%) of the most recently available figure from this state's Employment Department for annual average covered employment of the county containing the lost employment.

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.200, 285C.210 & 285C.240
Hist.: EDD 14-1997, f. & cert. ef. 12-4-97; EDD 9-2000, f. & cert. ef. 5-2-00, Renumbered from 123-065-0840; EDD 1-2005, f. & cert. ef. 2-25-05; EDD 1-2007(Temp), f. & cert. ef. 1-8-07 thru 7-6-07; EDD 2-2007, f. 6-15-07, cert. ef. 7-1-07

123-065-4450

Local Waiver of Employment Increase inside Zone

For purposes of ORS 285C.155, 285C.200(2) and 285C.205, in which the local enterprise zone sponsor waives the required increase in the employment of the firm, in order for an eligible business firm to qualify:

(1) The requirements as described in OAR 123-065-4420(1) or 123-065-4430(1) do not apply, but those related to not decreasing employment outside the zone still do, consistent with OAR 123-065-4420(5), 123-065-4430(5) and 123-065-4440, if relevant.

(2) To use the provisions of either ORS 285C.200(2)(b)(A) or (B), each governing body of the sponsor must adopt a resolution:

(a) Before the eligible business firm is authorized;

(b) Stipulating the minimum employment level to be maintained during the exemption as described in section (4) of this rule; and

(A) Jointly agreed to among the cosponsors;

(B) Implemented according to the same, commonly adopted language for standards, verification and so forth; and

(3) The resolution(s) described in section (2) of this rule shall incorporate:

(a) The minimum investment cost under ORS 285C.200(2)(b)(A) to be satisfied by qualified property that is placed in service and contained in property schedules over as many as three successive years, as otherwise allowed pursuant to the authorization or to two or more authorizations for concurrent investments at different locations inside the same zone; or

(b) For purposes of ORS 285C.200(2)(b)(B), the zone sponsor's specifications and methods for managing, measuring and enforcing the requirements under ORS 285C.205, to increase productivity by 10 percent, and to dedicate 25 percent of the property tax savings to employee training.

(4) The minimum employment as stipulated in the resolution(s):

(a) Is a single, stated number of employees;

(b) May be determined, as indicated in the resolution(s), by way of either Annual Employment or Claim Employment; and

(A) May be lower for purposes of ORS 285C.200(2)(b)(A); or

(B) Shall be at least the same under ORS 285C.200(2)(b)(B).

(5) Final processing and distribution of the authorization application shall be delayed until final approval of the resolution or resolutions in section (2) of this rule, copies of which shall be included with materials distributed, as described in OAR 123-065-4340(5)(b).

(6) Prior to July 1 of the first tax year of the exemption, the sponsor may (jointly) modify its resolution in accordance with sections (2) to (4) of this rule, but only if so requested by the firm.

(7) Failure to satisfy the minimums, requirements or conditions, as described in this rule, shall result in the exemption's denial or disqualification consistent with OAR 123-065-4430(2) to (4), although the county assessor is in no way obligated to consider compliance with any requirement arising under ORS 285C.155 or 285C.205 without formal communication from the zone sponsor.

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.155, 285C.200, 285C.205, 285C.230 & 285C.240
Hist.: EDD 14-1997, f. & cert. ef. 12-4-97; EDD 9-2000, f. & cert. ef. 5-2-00, Renumbered from 123-065-0850; EDD 1-2005, f. & cert. ef. 2-25-05; EDD 1-2007(Temp), f. & cert. ef. 1-8-07 thru 7-6-07; EDD 2-2007, f. 6-15-07, cert. ef. 7-1-07

123-065-4460

Commonly Owned Corporate Entities

Under ORS 285C.135(4):

(1) Employment of the firm as defined in OAR 123-065-4400 does not include jobs located at and employed by any company operating inside the enterprise zone other than the eligible business firm, regardless of the extent to which the firm and the other company have common ownership.

(2) Section (1) of this rule is not applicable if the following criteria are met:

(a) The common ownership is total, such that:

(A) The firm owns 100 percent of the other company;

(B) The other company owns 100 percent of the firm; or

(b) Before the first, initial exemption claim under ORS 285C.220, the firm notifies the local zone manager and the county assessor in writing that employees of the firm and employees of the other company are to be combined for purposes of applicable requirements of the enterprise zone exemption.

(3) If total common ownership is achieved according to paragraph (2)(a)(B) or (2)(a)(C) of this rule, the written notice as described in subsection (2)(b) of this rule must include the signed and dated authorization of an owner, executive officer or legally authorized representative of such an owner or officer of the company or corporation with 100-percent ownership of the firm or any such jointly owned company or companies.

(4) If the firm exercises the exception in section (2)(b) of this rule, then all relevant definitions and requirements of ORS 285C.050 to 285C.250 and this division of administrative rules apply to the combined hiring, compensation, employment levels and so forth of the qualified business firm and any such jointly owned company or companies in the zone.

(5) An eligible business firm is not bound by the definitions and requirements as indicated in section (4) of this rule for any other exemption received in the same or another enterprise zone and may retract the election made for subsection (2)(b) of this rule prior to the first filing of an exemption claim.

(6) Notwithstanding section (5) of this rule, the election of a qualified business firm in effect at the time of the termination of the enterprise zone shall apply consistently to all exemptions allowed under ORS 285C.245(1) in the terminated zone.

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.135, 285C.200, 285C.220 & 285C.245
Hist.: EDD 14-1997, f. & cert. ef. 12-4-97; EDD 9-2000, f. & cert. ef. 5-2-00, Renumbered from 123-065-0860; EDD 1-2005, f. & cert. ef. 2-25-05

123-065-4470

Sale or Leasing of Exempted Property

For purposes of ORS 285C.175(2)(c):

(1) A qualified business firm as defined in ORS 285C.050(15) may sell or lease qualified property without triggering disqualification on such property under 285C.240, such that the exemption continues for the remainder of its normal period.

(2) Section (2) of this rule depends on all of the following:

(a) The qualified property continues to be located and eligibly used inside the enterprise zone.

(b) The purchaser or lessee is an eligible business firm under ORS 285C.050(6).

(A) The combined Annual Employment of the purchaser/lessee and the originally qualified business firm equals or exceeds what it otherwise would need to be, plus 100 percent of the annual average employment of the purchaser/lessee in the zone (as computed consistent with OAR 123-065-4410) immediately prior to the change in ownership/lease; and

(B) The combined Claim Employment sufficiently compares to previous Claim Employment, plus the total employment of the purchaser/lessee in the zone at the time of the change in ownership/lease.

(d) That the purchaser/lessee and the qualified property comply with all other applicable requirements of ORS 285C.050 to 285C.250.

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.050, 285C.175, 285C.210 & 285C.240
Hist.: EDD 14-1997, f. & cert. ef. 12-4-97; EDD 9-2000, f. & cert. ef. 5-2-00, Renumbered from 123-065-0870; EDD 1-2005, f. & cert. ef. 2-25-05; EDD 1-2007(Temp), f. & cert. ef. 1-8-07 thru 7-6-07; EDD 2-2007, f. 6-15-07, cert. ef. 7-1-07

123-065-4480

Property, Jobs and Multiple Authorizations

For purposes of concurrent exemptions under ORS 285C.175 on qualified property constructed, modified or installed pursuant to two or more applications for authorization by the same eligible business firm, consistent with OAR 123-065-4365:

(1) Separate exemption claims and property schedules shall be filed, as described in OAR 123-065-4560 and 123-065-4570, to correspond to each application and the qualified property best associated with it.

(2) Qualification shall depend on the satisfaction of employment requirements arising from the application, with which the particular property is most clearly associated.

(3) For qualified property that cannot be definitively associated with any outstanding application, qualification shall depend on satisfaction of the most effectively stringent requirement from among the outstanding applications.

(4) If qualified property is specifically identified in two or more outstanding applications, then qualification may depend on satisfaction of the least effectively stringent requirement from among the outstanding applications.

Standard Exemption: Property

123-065-4500

Definitions

For purposes of OAR 123-065-4000 to 123-065-4999, as used in 285C.050 to 285C.250, consistent with the definitions in ORS Chapter 307 and OAR 150-285C.180:

(1) "Addition" means one or both of the following as indicated by the statutory context:

(a) The re-construction of an existing building or structure to expand or enlarge its area, volume, dimensions or structural capacity; or

(b) The newly erected or created space, enclosure or annex of the building or structure, per the re/construction described in subsection (a) of this section.

(2) "Building" means a real property improvement erected on the land, mostly enclosed by walls and roofing, and designed for human use, occupancy or shelter, including structural components necessary to make the building usable and habitable such as wiring, plumbing, foundation, fixtures, lighting and heating and cooling system.

(3) "Commercial" relates to the principal undertaking by a qualified business firm in the direct furtherance of the production of income through the handling, making or provision of goods, products or services for ultimate (though not typically direct) sale.

(4) The "completion of the construction, addition, modification or installation" of property has the same meaning as placing property 'in service' under ORS 285C.050(11) and means that qualified property is legally operable and practically ready for use or occupancy by an authorized business firm, including but not limited to the installation, testing or proving of safety, information or other equipment or systems essential to the property's commercial operation, but excluding training of personnel and other similarly intangible activities however critical they might be.

(5) "Cost" means expenses that can be documented through existing records or retrospective compilation of evidence, and that are incurred for:

(a) Construction, reconstruction modification or installation of qualified property, including but not limited to materials, supplies, labor, paint, contractor charges, equipment usage, engineering, architectural fees and physical connections to utilities and other property, but excluding the costs associated with maintenance, financing, legal fees, off-site improvements, the authorized business firm's own management and so forth; or

(b) Purchase of real or personal property machinery or equipment or of ready-made buildings or structures directly prior to installation or occupancy. Real market value shall be substituted for purchase price in the case of existing property that has not been recently sold (for example, leased property).

(6) "Installation" means the actual placement, affixing, connection or integration of machinery or equipment or personal property in or with a building, structure or other machinery or equipment for purposes of being used and does not mean the purchase, onsite delivery or storage of such property.

(7) Subject to further definition in OAR chapter 150 under ORS 285C.185(6)(b), "item" means any personal property that may be effectively appraised or assessed as a unit, including but not limited to an entire conveyance, information or other system, the various components of which are mechanically, electrically or similarly integrated.

(8) "Land" means raw undeveloped land and any improvements to the land for site development.

(9) "Located in/inside the enterprise zone" means that the qualified property is used and operated for trade or business within the current boundary of the enterprise zone and is not removed from it during the exemption period, except for incidental reasons or for purposes of the property's repair, maintenance and so forth.

(10) "Modification" has the meaning explicated in OAR 123-065-4070.

(11) "Personal property" means any tangible property (readily movable as opposed to effectively fixed or stationary) that is used in the business process or activity and is otherwise subject to ad valorem taxation, including but not limited to devices, tools and (former) spare parts that are put to use (see OAR 123-065-4520).

(12) "Production of tangible goods" means any physical process or manipulation of materials, commodities or products including but not limited to manufacturing, assembly, sorting, cooking, heating, freezing, mixing, sorting, wrapping, onsite conveyance, packaging or bulk printing.

(13) "Real property machinery or equipment" means real property (fixed or stationary and immovable due to weight, size or attachment to or integration with other real property) used in the business process or activity that is not otherwise described in this rule including but not limited to devices, fixtures, specialized pipes, venting, air filtration systems, special wiring, electrical panels or switches, or other non-structural forms of assembled apparatus.

(14) "Structure" means a real property improvement on or under the land other than buildings, machinery or equipment, including but not limited to ramps, docks, parking lots, outdoor free-standing signs, subterranean compartments and outdoor lighting, as well as associated fixtures, wiring, pipes, foundations and so forth.

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.050 - 285C.250
Hist.: EDD 5-1998, f. 3-12-98, cert. ef. 3-15-98; EDD 9-2000, f. & cert. ef. 5-2-00, Renumbered from 123-065-0900; EDD 1-2005, f. & cert. ef. 2-25-05

123-065-4510

Authorization & Eligible Utilization of Property

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

(1) It must be exclusively for use in one or more eligible activities as described in OAR 123-065-4220, and it must not be used for any ineligible activity listed in OAR 123-065-4230(1).

(2) Consistent with section (1) of this rule, some property will typically not qualify for the exemption, including but not limited to the following examples:

(a) Commercial fixtures and space in a retail setting;

(b) A commercially operated kitchen and associated fixtures and appliances;

(d) Medical devices; or

(e) Construction machinery.

(3) Sections (1) and (2) of this rule are excepted in the case of otherwise qualified property that is used for operations and at facilities as described in OAR 123-065-4230(2) or (4), including but not limited to being used in association with electronic commerce operations in a so-designated area, as described in OAR 123-065-7200 to 123-065-7500.

(4) Any such property must also:

(a) Belong to the authorized business firm by virtue or ownership or formal lease agreement;

(b) Adequately relate to the authorization application in accordance with OAR 123-065-4355; and

(c) Be constructed, added to, modified or installed in the zone to serve commercial/non-personal purposes, for which it is all but exclusively utilized.

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.135, 285C.180, 285C.185 & 285C.240
Hist.: EDD 5-1998, f. 3-12-98, cert. ef. 3-15-98; EDD 9-2000, f. & cert. ef. 5-2-00, Renumbered from 123-065-0910; EDD 1-2005, f. & cert. ef. 2-25-05

123-065-4520

Mechanical, Personal and Unqualified Property

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

(1) Real property machinery or equipment or personal property may qualify for the exemption, despite prior usage outside the zone (or as allowed under ORS 285C.190), taking account of the usual factors of appraisal, such as age, deterioration and obsolescence, as well as any reconditioning, refurbishment or restoration.

(2) Neither real property machinery or equipment (except as allowed under ORS 285C.190) nor personal property may qualify for the exemption, if more than three months before submission of the authorization application it was already both:

(a) Owned or leased by the business firm; and

(b) Located in the county containing the site of the property inside the zone.

(3) An item of personal property machinery or equipment with a cost of less than $50,000 may qualify for the exemption only if used:

(a) Exclusively in the production of tangible goods, which by itself will usually preclude furniture and most simple, ordinary communication, design, information, office or video machines/systems; or

(b) In Electronic Commerce as described in OAR 123-065-7100 and at a location in a so-designated area as described in OAR 123-065-7200 to 123-065-7500. (No other special eligibility exception replaces subsection (a) of this section)

(4) For purposes of subsection (3)(a) of this rule, the exemption shall apply to any personal property item of machinery or equipment that does the following:

(a) Serves the business firm's commercial activity, consistent with OAR 123-065-4500(12), even if the tangible good in question is not actually created or manufactured from raw inputs, but is instead modified, processed, restored, repaired, measured, sized, imprinted, packaged, conveyed, shipped or comparably affected in a physical manner.

(b) Maintains, calibrates, adjusts, monitors, tests or fixes qualified property directly involved with tangible output or production, or is used to assure quality control of tangible output or production, including but not limited to research and development equipment incorporated into production activities.

(5) Regardless of any other provision of this division of administrative rules, the following property may not qualify for the exemption:

(a) Land and improvements "to" raw land, such as site preparation.

(b) Any item of personal property with a cost of less than $1,000.

(d) Any machinery, equipment or device that moves by its own motive power under the control of its operator/driver, including but not limited to forklifts.

(e) Any self-propelled motorized vehicle.

(f) Any device or item that is pulled, pushed or carried by a vehicle and designed to hold and transport people, goods or property on highways, waterways or railways beyond the zone boundaries, including but not limited to trailers, rolling stock, barges, carriages or railroad cars.

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.180, 285C.185 & 285C.190
Hist.: EDD 5-1998, f. 3-12-98, cert. ef. 3-15-98; EDD 9-2000, f. & cert. ef. 5-2-00, Renumbered from 123-065-0920; EDD 16-2002, f. 9-12-02 cert. ef. 9-15-02; EDD 1-2005, f. & cert. ef. 2-25-05

123-065-4530

Buildings, Structures & Other Real Property

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

(1) No building, structure or newly installed real property machinery or equipment may qualify, unless the total cost of all such property in a single property schedule (as attached to an exemption claim under ORS 285C.225) equals at least $50,000.

(2) Qualified property, including but not limited to a building or structure, is severable under ORS 285C.180(5), 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, including but not necessarily as anticipated per OAR 123-065-4325(3)(e); 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.

(3) As determined by the county assessor, a golf course or elements thereof may be classified as a structure or structures in the case of a hotel, motel or destination resort under ORS 285C.185(4).

(4) The exemption on qualified additions or modifications to an existing building or structure under ORS 285C.175(3)(b) (or to existing real property machinery or equipment under ORS 285C.190) is measured in each year of the period of exemption by:

(a) Identifying the new improvements to property attributable to those same qualified additions or modifications;

(b) Accounting for all other concurrent property improvements, retirements or adjustments that affect the valuation of the taxable property containing the new improvements identified for purposes of subsection (a) of this section;

(c) Computing the assessed value (using either the real market value or the maximum assessed value whichever is lower in each case) of such taxable property:

(A) With such new improvements; and

(B) Without such new improvements (that is, the assessed value that would have been subject to taxation during the period of exemption).

(d) Taking the difference between the values described in paragraphs (c)(A) and (c)(B) of this section, such that any negative difference is equated to zero.

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.175, 285C.180, 285C.185 & 285C.190
Hist.: EDD 5-1998, f. 3-12-98, cert. ef. 3-15-98; EDD 9-2000, f. & cert. ef. 5-2-00, Renumbered from 123-065-0930; EDD 1-2005, f. & cert. ef. 2-25-05

123-065-4540

Property Already Entered on Rolls

Qualified property is not necessarily prohibited from receiving an enterprise zone exemption under ORS 285C.170 and 285C.175, even if it is already entered on the assessment roll of the county (after the effective date of the zone's designation or the area's amendment into the zone), including but not limited to the following examples, for when assessment might occur before property may be exempt:

(1) Property while in the process of construction, modification or installation is ineligible under ORS 285C.170 or 307.330, because of failure to make timely application, fulfill applicable criteria or the like.

(2) Machinery or equipment located elsewhere in the county is subsequently acquired by the authorized business firm and installed in the enterprise zone.

(3) While an administrative or judicial appeal is pending.

(4) The authorized business firm missed the first-year filing deadline but receives the remaining years of the exemption as described in OAR 123-065-4565.

(5) Other circumstances that do not necessarily nullify the exemption under ORS 285C.175.

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.170, 285C.175, 285C.180 & 285C.220
Hist.: EDD 5-1998, f. 3-12-98, cert. ef. 3-15-98; EDD 9-2000, f. & cert. ef. 5-2-00, Renumbered from 123-065-0940; EDD 1-2005, f. & cert. ef. 2-25-05

123-065-4550

Obligations for All Leases, Lessors and Lessees

(1) Qualified property that is not owned by the authorized business firm is exempt in an enterprise zone under ORS 285C.185(3) subject to all other applicable requirements, if used, occupied or operated by the firm under a lease agreement executed no later than July 1 of the first tax year of exemption under ORS 285C.175. The term of the lease must also extend until the end of the final tax year of exemption, unless the qualified business firm will or does assume ownership of the property by such time.

(2) The owner of leased qualified property may be any person or corporation, including but not limited to a governmental body or an owner of the firm.

(3) The lease agreement must effectively operate as a net lease, inasmuch as:

(a) The firm/lessee directly pays all ad valorem taxes assessed against any property covered by the lease agreement; or

(b) The firm/lessee will compensate the owner of the property in full for such property taxes in addition to rent or other costs throughout the period of the lease.

(4) The stipulation of a net lease is irrelevant if the owner and lessee have common ownership and are subject to treatment as a single eligible business firm according to OAR 123-065-4460.

(5) The owner of any such qualified property (even machinery or equipment) must join the firm in filing the property schedule as an attachment to the exemption claim form under ORS 285C.225(4)(d) for the first exemption year, such that the owner or the owner's authorized legal agent signs one of the following:

(a) The same property schedule that has the original signature of the firm's representative; or

(b) An attachment to the schedule that provides for equivalent acknowledgment by the owner.

(6) For purposes of this rule, a lessee that sub-leases property to the firm may substitute for the "owner."

(7) The owner has the same right as the firm to timely notify the county assessor and the zone sponsor under ORS 285C.240(1) if a requirement is not met, in order to avoid penalties under ORS 285C.240(4).

(8) A copy of the lease agreement is not required with the authorization application or the exemption claim, except as described in OAR 123-065-4315, or as requested by the county assessor.

123-065-4560

Mandatory First-Year Claim with Property Schedule

For purposes of being granted an enterprise zone exemption on qualified property under ORS 285C.175:

(1) The authorized business firm:

(a) Must file the latest revision of the following Department of Revenue forms with the county assessor under ORS 285C.220 and 285C.225 to begin the exemption period:

(A) 150-310-075, Oregon Enterprise Zone Exemption Claim; and

(B) 150-310-076, Oregon Enterprise Zone Property Schedule (as an attachment that lists and identifies all of the property to be exempt);

(b) May do so only after December 31 of the year, in which the re/construction, modification or installation of qualified property is completed;

(d) Is in no way bound by dates for such completion or filing as anticipated in or with the authorization application.

(2) The property may not have been placed in service at a location inside the zone before January 1 of the year directly prior to filing the exemption claim as described in section (1) of this rule.

(3) Subsection (1)(b) of this rule is synonymous with qualified property being 'placed in service' during that year, which:

(a) May be only a portion of the entire investment proposed with authorization; and

(b) Does not include property (even if physically operable or finished) that pending completion of further work on the overall facility or investment is:

(A) Incapable of effective use or occupancy for commercial purposes; or

(B) Not yet intended to be so used or operated, subject to testing, shakedown or other general startup steps.

(4) Sections (1) to (3) of this rule dovetail and are mutually exclusive with criteria for exemption under ORS 285C.170, as described in OAR 123-065-4800.

(5) The filing as described in section (1) of this rule shall be due no later than the corresponding April 1, but may be submitted/revised later:

(a) By June 1 with a late fee under ORS 285C.220(7);

(b) By June 1 to amend a timely filed schedule form under ORS 285C.225(5); or

(6) The county assessor may deny the exemption under ORS 285C.175(6) if unable to obtain critical and reasonably requested clarification, confirmation or substantiation of information missing from or supplemental to the filed forms from the:

(a) Firm under ORS 285C.220(3); or

(b) Zone sponsor under ORS 285C.230(1)(b).

(7) The county assessor shall deny the exemption to any authorized business firm with inactive status, as described in OAR 123-065-4375, if the filing does not include the fee under ORS 285C.165(3) (in addition to subsection (4)(a) of this rule if applicable).

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.165, 285C.170, 285C.175, 285C.220, 285C.225 & 285C.230
Hist.: EDD 5-1998, f. 3-12-98, cert. ef. 3-15-98; EDD 9-2000, f. & cert. ef. 5-2-00, Renumbered from 123-065-0960; EDD 1-2005, f. & cert. ef. 2-25-05

123-065-4565

Very Late Filing for Exemption Net First Year

Under ORS 285C.220(10), for purposes of receiving the remainder of an exemption less the first year for the late submission of an exemption claim and property schedule to the county assessor under ORS 285C.220 and 285C.225:

(1) Any authorized business firm missing the April 1 due date (as well as the June 1 late filing deadline) must submit the claim form and schedule on or before April 1 of the next year; and

(2) The firm must have complied with all applicable requirements as if the exemption were in effect during that first year.

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.220 & 285C.225
Hist.: EDD 5-1998, f. 3-12-98, cert. ef. 3-15-98; EDD 9-2000, f. & cert. ef. 5-2-00, Renumbered from 123-065-1090; Renumbered from 123-065-4690, EDD 1-2005, f. & cert. ef. 2-25-05

123-065-4570

Filing Latter-year Claims

In order for qualified property to be exempt in an enterprise zone throughout the entire period under ORS 285C.175:

(1) The qualified business firm shall file annually under ORS 285C.220:

(a) Using the latest revision of Department of Revenue form 150-310-075, Oregon Enterprise Zone Exemption Claim;

(b) With the county assessor and a copy to the zone sponsor;

(d) In addition to the first-year filing described in OAR 123-065-4560.

(2) The claim form shall also serve the exemption of other property pursuant to the same authorization, consistent with OAR 123-065-4355(5), including but not limited to the attachment of another property schedule for any new, additional qualified property.

(3) Despite section (2), this rule addresses the claim form that is filed simply for purposes of compliance in maintaining an ongoing exemption.

(4) If such a filing is not timely received by either the assessor's office or the zone sponsor, it may be accepted until August 31 under ORS 285C.220(8), but only if:

(a) Furnished to both entities; and

(b) Accompanied with the progressively larger late filing fee to the assessor.

(5) The local zone manager shall promptly alert the county assessor in the event that the zone sponsor's copy was not received or timely sent.

(6) The assessor may henceforth deny the exemption for the remainder of the period, subject to notice under ORS 285C.175(6):

(a) Pursuant to an unrequited request as described in OAR 123-065-4560(6); or

(b) Without further reason or formal procedure if:

(A) The claim form is not received (at the latest on August 31); or

(B) It is filed after April 1 but without a sufficient amount for the late filing fee.

(7) The zone sponsor or the county assessor may exercise the procedure under ORS 285C.235 to demand corroborating evidence of the firm by time/receipt-verified mail, such that:

(a) This would be the logical recourse if a claim form were not filed after the final year of exemption;

(b) This procedure is always available if the submitted information and the compliance of the firm with employment/other requirements is suspect; and

(A) Automatically, if the firm does not satisfactorily respond within 60 days; or

(B) Most likely with the penalty under ORS 285C.240(4), in the event that provided evidence shows that the qualified business is required to have given notice under ORS 285C.240(1)(b), (c) or (d).

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.175, 285C.220, 285C.225, 285C.230, 285C.235 & 285C.240
Hist.: EDD 5-1998, f. 3-12-98, cert. ef. 3-15-98; EDD 9-2000, f. & cert. ef. 5-2-00, Renumbered from 123-065-0970; EDD 1-2005, f. & cert. ef. 2-25-05

123-065-4580

Disqualification of Particular Property

An ongoing enterprise zone exemption under ORS 285C.175 is not forfeit for all qualified property of a qualified business firm, if only certain property fails to satisfy a relevant requirement, such that:

(1) Disqualification (including back taxes) shall ensue under ORS 285C.240 for any such property. (The one-year payback of tax savings under ORS 285C.240(6) does not apply)

(2) Such disqualification pertains when the exempt property no longer satisfies a relevant criterion under ORS 285C.175, 285C.180, 285C.185 or 285C.190.

(3) Section (2) of this rule includes but is not limited to the following events that occur during a calendar year while the exemption is being received, in that the particular property is:

(a) Removed from the enterprise zone;

(b) Sold, exchanged or leased to another business firm, except as described in OAR 123-065-4470; or

(4) Property is also disqualified if it is not actually used or occupied (notwithstanding its being placed in service):

(a) On or before June 30 of the first assessment year of exemption; or

(b) For at least 180 consecutive days concluding in any subsequent exemption year.

(5) In order for the qualified business firm to avoid the 20-percent penalty on the back taxes associated with such property-specific disqualification, notice under ORS 285C.240(1)(a), (e) or (f) is due by July 1 after the year in which failure occurred.

123-065-4590

Designation/Amendment of an Enterprise Zone

Irrespective of any other provision for receiving an enterprise zone exemption on qualified property:

(1) No such property may receive an exemption if located in the zone prior to the effective date of:

(a) The designation of that zone; or

(b) That location's inclusion in the zone by a change in the zone boundary.

(2) The restriction in section (1) of this rule does not apply if the property:

(a) Would have been allowed to qualify in a terminated zone under ORS 285C.245(1), as described in OAR 123-065-4600 to 123-065-4649, and the business firm is/remains actively authorized; or

(b) Is in the process of being constructed, added to, modified or installed, and such physical work is specifically excluded by OAR 123-065-4313(1) for purposes of authorizing an eligible business firm.

(3) Only as described in subsection (2)(a) (not OAR 123-065-4540 or subsection (2)(b)) of this rule may qualified property receive an enterprise zone exemption if actually listed on the assessment rolls of the county, at any site in the county on or before an effective date as described in section (1) of this rule.

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.175
Hist.: EDD 5-1998, f. 3-12-98, cert. ef. 3-15-98; EDD 9-2000, f. & cert. ef. 5-2-00, Renumbered from 123-065-0990; EDD 1-2005, f. & cert. ef. 2-25-05

Standard Exemption in Terminated Zone

123-065-4600

Purpose and Scope

OAR 123-065-4600 to 123-065-4649 address operation of the three- to five-year exemption under ORS 285C.175 on taxable property in situations where the enterprise zone is terminated. Only as provided under ORS 285C.245(1) may an exemption be granted on qualified property within the former boundary of such an enterprise zone, subject to the usual requirements of ORS 285C.050 to 285C.250.

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.175 & 285C.245
Hist.: EDD 1-2005, f. & cert. ef. 2-25-05

123-065-4610

Authorization

For purposes of claiming and being granted the enterprise zone exemption under ORS 285C.175:

(1) An eligible business firm is "authorized" if:

(a) Before the effective date of the zone's termination, the local zone manager receives the application for authorization; and

(b) The zone sponsor and the county assessor subsequently approve it under ORS 285C.140.

(2) Likewise, termination of the zone does not affect a previously authorized eligible business firm if its authorization is still active when the zone terminates, except as specified in this rule or OAR 123-065-4640.

(3) Following termination, for an authorized business firm described in section (1) or (2) of this rule:

(a) ORS 285C.165 (active status of authorization) is irrelevant for qualified property remaining outside of a current enterprise zone;

(b) The firm may not effectively reapply for authorization for a proposed investment under ORS 285C.245(1)(b) at the same site, unless it is also qualified in the terminated zone, and the requirements listed in OAR 123-065-4620 are met; and

(A) No longer remains authorized under ORS 285C.245(1)(a)(B)(ii); and

(B) May receive exemption only on qualified property placed in service before that date.

(4) An authorized business firm described in section (1) of this rule may not apply for authorization at any site in the terminated zone under ORS 285C.245(1)(b), with the same exception as described in subsection (3)(b) of this rule.

(5) Consistent with OAR 123-065-4590(2)(a), an authorization automatically belongs to a newly designated zone, if:

(a) The zone encompasses the site of the authorized business firm's proposed investment; and

(b) The authorization is:

(A) Active under ORS 285C.165; and

(B) Not expired as described in subsection (3)(c) of this rule.

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.140, 285C.175 & 285C.245
Hist.: EDD 5-1997, f. 4-14-97, cert. ef. 4-15-97; EDD 5-1998, f. 3-12-98, cert. ef. 3-15-98; EDD 9-2000, f. & cert. ef. 5-2-00, Renumbered from 123-065-0790; Renumbered from 123-065-4390, EDD 1-2005, f. & cert. ef. 2-25-05; EDD 1-2007(Temp), f. & cert. ef. 1-8-07 thru 7-6-07; EDD 2-2007, f. 6-15-07, cert. ef. 7-1-07

123-065-4620

Grandfathering in a Terminated Zone

(1) After the termination of an enterprise zone, an enterprise zone exemption shall be granted under ORS 285C.245(1)(b) for qualified property that is located outside of a current enterprise zone, and that is owned or leased by an eligible business firm, if all of the following requirements are met:

(a) Within ten years after the effective date of the termination of the zone, the eligible business firm submits a complete application for authorization pursuant to the applicable provisions of ORS 285C.140;

(b) The qualified property is to be located entirely within the boundaries of the terminated zone, as they existed at the time of termination;

(c) On the effective date of termination, the eligible business firm was actively authorized or qualified in that same zone, except as restricted by OAR 123-065-4610(3)(b) or 123-065-4630;

(d) The eligible business firm has not been disqualified under ORS 285C.245(1)(c) in the terminated zone;

(e) Construction, modification or installation of the qualified property commences on or before June 30 of the tax year in which the firm's last outstanding exemption in the zone concludes;

(f) The eligible business firm's application for authorization is approved:

(A) By the county assessor and the local manager of the terminated zone or the manager's successor;

(B) Lacking a local zone manager, by the county assessor and either the Department or a formal action of the zone sponsor; or

(g) Completion of construction, modification or installation occurs in accordance with OAR 123-065-4640;

(h) Timely exemption claim is made to the county assessor under ORS 285C.220 and 285C.225; and

(i) The authorized business firm complies with all applicable requirements of ORS 285C.050 to 285C.250 in effect when the zone terminated, including but not limited to any requirement arising from or associated with authorization.

(2) Disqualification for purposes of ORS 285C.245(1)(c) does not include either:

(a) Loss of an extended abatement under ORS 285C.240(3)(b); or

(b) Payment to the zone sponsor of the equivalent of one year's tax savings under ORS 285C.240(6).

(3) The sponsor of a terminated enterprise zone may consider, approve and enter into a written agreement with an eligible business firm for an extended abatement under ORS 285C.160, prior to final action for subsection (1)(f) of this rule.

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.140, 285C.175 & 285C.245
Hist.: EDD 3-1996, f. & cert. ef. 4-2-96; EDD 5-1998, f. 3-12-98, cert. ef. 3-15-98; EDD 9-2000, f. & cert. ef. 5-2-00; Renumbered from 423-065-0420, EDD 1-2005, f. & cert. ef. 2-25-05

123-065-4630

Purchase of Grandfathered Firm

An authorized or qualified business firm may not apply for authorization under ORS 285C.245(1)(b) in an enterprise zone that has terminated, if since termination, the firm has been purchased by and integrated into another business or corporation, except in the case where the firm remains essentially intact as a corporate entity, such as becoming a subsidiary to the purchasing corporation operating much as it did before the merger or acquisition.

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.140, 285C.175 & 285C.245
Hist.: EDD 5-1998, f. 3-12-98, cert. ef. 3-15-98; Renumbered from 423-065-0430, EDD 1-2005, f. & cert. ef. 2-25-05

123-065-4640

Timely Completion of Construction

For purposes of a proposed investment in qualified property by a business firm that is authorized in a terminated enterprise zone under ORS 285C.245(1)(a)(B)(iii) and (b):

(1) Completion of "construction, addition modification or installation within a reasonable time" means the property is placed in service no later than 18 months after the date on which any relevant construction, reconstruction, modification or installation activity commenced.

(2) "Without interruption" means for any such activity that qualified property does not remain in an unfinished state for more than six months without significant progress toward the completion of activities as described in section (1) of this rule.

(3) The property may not qualify and receive the exemption under ORS 285C.175, if section (1) or (2) of this rule is violated, except as allowed in section (4) of this rule.

(4) Section (3) of this rule is waived, and the exemption is allowed, if the Department issues a written finding to the county assessor that the violation of section (1) or (2) is reasonable and not excessive, given the nature and extent of the authorized business firm's investment or of inadvertent circumstances.

(5) The prohibitions and allowances of this rule are irrelevant if the application for authorization is:

(a) Denied or not approved, subject to appeal;

(b) Invalid in terms of its submission and so forth;

(d) Expired as described in OAR 123-065-4610(3)(c).

(6) Nothing in this rule shall be construed as influencing or restricting the qualification of an exemption in an enterprise zone that still exists and is not terminated.

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.175 & 285C.245
Hist.: EDD 9-2000, f. & cert. ef. 5-2-00; Renumbered from 423-065-0440, EDD 1-2005, f. & cert. ef. 2-25-05

Standard Exemption: General Lawfulness

123-065-4700

Purpose and Scope

OAR 123-065-4700 to 123-065-4760 implement ORS 285C.200(1)(f), pertaining to a business firm's compliance with other laws in order to receive an exemption on property in an enterprise zone. They have been adopted pursuant to specific Legislative direction for such rules under ORS 285C.200(6).

Stat. Auth.: ORS 285A.075, 285C.060(1) & 285C.200(6)
Stats. Implemented: ORS 285C.200
Hist.: EDD 13-2000, f. & cert. ef. 8-15-00; EDD 1-2005, f. & cert. ef. 2-25-05

123-065-4710

Definitions

For purposes of OAR 123-065-4700 to 123-065-4760, with respect to an eligible business firm:

(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 123-065-4740; and

(b) Not cured in accordance with OAR 123-065-4750.

(3) Illegal Act means an action, omission, chain of occurrences or similar failing or failings by the firm or by its officer or agent in the conduct of the firm's operations and activities that effectively takes place after the firm's application for authorization and on or before December 31 of the last year of exemption, and that causes 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 thereunder:

(a) The United States Congress;

(b) The Oregon Legislative Assembly; or

(5) Substantial Falsification means that information in a 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 the false swearing under ORS 305.990(5); or

(b) Contradicts OAR 123-065-4720(1), in that at the time of the relevant declaration, the firm failed to disclose an Illegal Act, of which it is reasonably expected to have been aware, including but not limited to one that is ongoing at the time of authorization, subject to a Determination.

Stat. Auth.: ORS 285A.075, 285C.060(1) & 285C.200(6)
Stats. Implemented: ORS 285C.200
Hist.: EDD 13-2000, f. & cert. ef. 8-15-00; EDD 1-2005, f. & cert. ef. 2-25-05

123-065-4720

Declarations and Responsibilities

(1) For any form or document issued by the Department of Revenue for submission or filing by a business firm in association with an enterprise zone exemption, the written declaration that is made under penalties of false swearing (as to the truth and correctness of the form or document under ORS 305.810 and 305.815) shall also include a statement to the effect that the firm is in compliance with all applicable laws described in OAR 123-065-4710(4).

(2) Without 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(6)
Stats. Implemented: ORS 285C.125 & 285C.200
Hist.: EDD 13-2000, f. & cert. ef. 8-15-00; EDD 1-2005, f. & cert. ef. 2-25-05

123-065-4730

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 disqualification of the exemption under ORS 285C.240 (including back taxes).

(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 in accordance with ORS 305.275(1)(c).

(4) The county assessor may reverse a decision or action in section (1) or (2) of this rule, for the following reasons:

(a) Reconsideration of an issue listed in OAR 123-065-4760(1); or

(b) A successful appeal that negates the Determination.

(5) As necessary to effect a reversal for section (4) of this rule, the assessor may reinstate the exemption and refund taxes paid on qualified property to the firm consistent with provisions of ORS 311.806 and 311.812.

(6) 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, and the assessor may add interest to any back taxes to have been collected during the intervening time period until the next general property tax roll, but for the appeals process, consistent with provisions for the imposition of interest on uncollected taxes under ORS 311.206.

(7) 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(6).

Stat. Auth.: ORS 285A.075, 285C.060(1) & 285C.200(6)
Stats. Implemented: ORS 285C.125 & 285C.200
Hist.: EDD 13-2000, f. & cert. ef. 8-15-00; EDD 1-2005, f. & cert. ef. 2-25-05

123-065-4740

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; and

(b) Illicit intent associated with firm personnel or decisions inside the zone may be circumstantially indicated in the Determination, but still be immaterial, if having no 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(6)
Stats. Implemented: ORS 285C.200
Hist.: EDD 13-2000, f. & cert. ef. 8-15-00; EDD 1-2005, f. & cert. ef. 2-25-05

123-065-4750

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

(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, prior to when the Illegal Act occurred. According to stipulations in the sponsor's declaration, this level or levels shall be equal to or greater than:

(a) Twenty-five thousand dollars, for a fine or fines levied by a regulatory agency under a single citation or for closely related violations; and

(b) One hundred thousand dollars, overall, including but not limited to court-imposed damages.

(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 in OAR 123-065-4710(1) 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 completely eliminated and resolved, such that further Noncompliance by the firm of a comparable or more serious nature is not expected to occur; and

(d) Reasonable efforts have been made to compensate other substantially harmed parties uninvolved with any court action.

(4) The decision to consider a Noncompliance cured is made on a one-time basis and shall be subject to neither ongoing action by the firm nor continual verification.

Stat. Auth.: ORS 285A.075, 285C.060(1) & 285C.200(6)
Stats. Implemented: ORS 285C.200
Hist.: EDD 13-2000, f. & cert. ef. 8-15-00; EDD 1-2005, f. & cert. ef. 2-25-05

123-065-4760

Interpretation

With respect to the interpretation and application of OAR 123-065-4700 to 123-065-4760 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? ...for example, after the authorization application?

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

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

(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 the notice provided in OAR 123-065-4730(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 the affected business firm, the Department of Revenue and the Department are sent copies; and

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

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

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

(B) The assessor certifies whether a conclusive response by the Director shall bind the assessor's action in OAR 123-065-4730;

(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, which shall be treated as official state interpretation of this division of administrative rules.

Stat. Auth.: ORS 285A.075, 285C.060(1) & 285C.200(6)
Stats. Implemented: ORS 285C.200
Hist.: EDD 13-2000, f. & cert. ef. 8-15-00; EDD 1-2005, f. & cert. ef. 2-25-05

Work-in-Progress before Standard Exemption

123-065-4800

Exemption Prior to Being 'In Service'

Under ORS 285C.170 qualified property of an actively authorized business firm in the enterprise zone is exempt from ad valorem taxation for up to two years, such that:

(1) Consistent with OAR 123-065-4560(4), this exemption precedes and complements the one under ORS 285C.175, in that

(a) It applies only to property that is not yet placed in service before the (January-1) assessment date; and

(b) It may not be used for property that may/must start the three- to five-year exemption period in the present assessment year.

(2) This exemption is largely interchangeable with the one under ORS 307.330 and 307.340 (Commercial Facilities Under Construction); common elements are:

(a) The firm must file with the county assessor:

(A) Not later than April 1 of each assessment year when the property exists in the zone/county; and

(B) Using the latest revision of the Department of Revenue form 150-310-020, Application for Cancellation Of Assessment On Commercial Facilities Under Construction, as described in OAR 150-285C.170;

(b) Any (utility) property that is or will be centrally assessed by the Department of Revenue under ORS 308.505 to 308.665 is completely inapplicable;

(d) The relationship to ORS 285C.175 as described in section (1) of this rule is the same on relevant property (including but not limited to section (4) of this rule).

(3) The following may be exempt in the zone, but would not be under ORS 307.330:

(a) Property at a project site where there is no construction of or additions to a building or structure;

(b) Mere modifications to a building or structure;

(d) Additional property that is not yet placed in service, even though a portion or element of the project, facility or structure has been completed, consistent with ORS 285C.180(5); or

(e) Machinery or equipment, even if it will:

(A) Not be installed in or affixed to a building, structure or addition thereto; or

(B) Remain personal property after installation.

(4) Irrespective that property might qualify under ORS 285C.175, the following situations are excluded from this exemption, although property may be exempt under ORS 307.330 to some extent:

(a) Property had been exempt already at the same site in the zone under ORS 307.330 (for one year);

(b) The business firm is a hotel, motel or destination resort, regardless if the zone is listed in OAR 123-065-4260;

(d) An eligible business firm that has applied but not been approved for authorization consistent with OAR 123-065-4345 by the April-1 filing due date; or

(e) As of the January 1 assessment date:

(A) Authorization is inactive under ORS 285C.165;

(B) Property is not yet located inside the boundary of the designated zone; or

(5) Pending approval for authorization as noted in subsection (4)(d) of this rule, the firm may file per subsection (2)(a) of this rule, and have property exempted as allowed under ORS 307.330, such that:

(a) After approval, exemption under ORS 285C.170 may be extended to other qualified property subject to criteria described in this rule; and

(b) The ongoing exemption of property shall continue to be ascribed to ORS 307.330 if allowed.

(6) The county assessor shall not exempt property specifically under ORS 285C.170, if the assessor has a reasonable and definitive reason to believe that:

(a) The property is or will not be qualified property, consistent with OAR 123-065-4500 to 123-065-4550 or 123-065-4590, when placed in service;

(b) The authorized business firm will not qualify under ORS 285C.200; or

(7) In the face of significant doubts about conformance with the requirements of ORS 285C.170, the assessor may depend on reasonably requested information or confirmation from the firm or zone sponsor, before determining to the grant the exemption.

(8) Consistent with subsection (2)(c) of this rule, property exempted under ORS 285C.170 may not receive further exemption under ORS 307.330 beyond the cumulative two-year period, in cases where it may not (yet) qualify under ORS 285C.175.

(9) The exemption as described in this rule is not necessarily jeopardized in any way, even for such property that would not normally be exempt under ORS 307.330, in the event that the anticipated exemption under ORS 285C.175 is:

(a) Unclaimed under ORS 285C.220;

(b) Denied -- that is, not granted; or

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.165, 285C.170 & 307.330
Hist.: EDD 1-2005, f. & cert. ef. 2-25-05

Payback in Lieu of Disqualifying Standard Exemption

123-065-4950

Purpose and Scope

OAR 123-065-4950 to 123-065-4990 implement how a qualified business firm receiving a three to five-year enterprise zone exemption from property taxes may avoid disqualification by paying the zone sponsor one year's worth of the exemption, in the event that the firm fails to meet a requirement under ORS 285C.240(1) that determines the firm's general qualification for receiving all of the exemption.

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.240
Hist.: EDD 9-2000, f. & cert.. ef. 5-2-00; EDD 1-2005, f. & cert. ef. 2-25-05

123-065-4960

Applicability of Payback Provisions

For purposes of ORS 285C.240(6), a qualified business firm's avoidance of disqualification through payment of the firm's enterprise zone tax savings for one year is allowed, only if:

(1) The firm fails to meet an employment, compensation, waiver or locally established requirement affecting an overall exemption on qualified property, pursuant to ORS 285C.240(1)(b), (c) or (d), and not for any requirement pertaining to the status of particular qualified property (see OAR 123-065-4580) or to the firm's eligibility under ORS 285C.135;

(2) The firm provides written notice under ORS 285C.240 to the zone sponsor or the county assessor by not later than July 1 of the year following the year in which failure as described in section (1) of this rule occurred;

(3) The firm maintains the business operations, for which the qualified property was being used or occupied, unless the firm can demonstrate that any discontinuation (shutdown) is only temporary;

(4) The firm has not previously used ORS 285C.240(6) to avoid disqualification of the exemption for any failure covered by section (1) of this rule; and

(5) The firm provides written proof to the county assessor that it has paid the full amount of the year's tax savings to the zone sponsor, not later than August 31 of the year following:

(a) The year in which the failure occurred; or

(b) The fourth year of exemption, in the case of failure to meet a requirement for an additional two years of exemption under ORS 285C.160, during (only) one of the first four exemption years.

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.240
Hist.: EDD 9-2000, f. & cert.. ef. 5-2-00; EDD 1-2005, f. & cert. ef. 2-25-05

123-065-4970

Payment of Tax Savings

For purposes of the payment by a qualified business firm described in OAR 123-065-4960(5):

(1) The firm shall pay to the sponsor of the enterprise zone an amount equal to the additional taxes due, as the county assessor computed under ORS 285C.175(7), on all of the qualified property receiving the exemption in:

(a) The year in which the failure occurred; or

(b) The fourth year of exemption, consistent with OAR 123-065-4960(5)(b).

(2) The sponsor of the enterprise zone is responsible for enabling the firm to make the payment, by doing the following in a timely manner:

(a) Issuing an invoice for such payment to the firm (as necessary);

(b) Receiving such moneys; and

(3) In collecting, invoicing, holding or spending any money paid by the firm, the zone sponsor shall establish the necessary accounts, special funds, procedures or documentation in accordance with ORS chapter 294 and applicable local laws.

(4) If the county assessor does not receive proof that sufficient and timely payment has been made by the firm, the assessor shall disqualify the exemption or exemptions covered by the requirement as described in OAR 123-065-4960(1), as normally provided under ORS 285C.240.

(5) If the assessor disqualifies the firm for an overall exemption, such that the firm owes taxes on the formerly exempt property, then the assessor shall reduce the back taxes by any amount previously paid to retain the same exemption under ORS 285C.240(6), in accordance with this rule.

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.240
Hist.: EDD 9-2000, f. & cert.. ef. 5-2-00; EDD 1-2005, f. & cert. ef. 2-25-05; EDD 1-2007(Temp), f. & cert. ef. 1-8-07 thru 7-6-07; EDD 2-2007, f. 6-15-07, cert. ef. 7-1-07

123-065-4980

Distribution of Payment among Cosponsors

In the case of an enterprise zone sponsor comprising two or more city or county governments or port districts:

(1) Any cosponsor may act as the initial depository for collecting the qualified business firm's payment as described in OAR 123-065-4970 and providing the firm with the requisite proof of payment, but at least one cosponsor must do so.

(2) The cosponsors may create joint mechanisms and arrangements to receive, hold or use such payments.

(3) The cosponsors may distribute the amount of any such payment among themselves through any mutually agreed method or formula.

(4) If distribution does not happen within six months of receipt of payment, unless pending a joint effort among the cosponsors as described in OAR 123-065-4990, the government or entity holding the funds shall distribute the full amount in equal portions to each city, port or county government that sponsors the zone without assessing any administrative fee.

(5) There is no obligation to maintain or repeat for future payments any of the sponsor's elections and methods utilized in accordance with this rule for a given payment.

123-065-4990

Utilization of Payments

In accordance with ORS 285C.240(6)(b), the expenditure of moneys collected from a qualified business firm shall benefit residents of the enterprise zone and its immediate vicinity, such that:

(1) For a rural zone, the immediate vicinity will generally encompass (but is not necessarily limited to) the entire incorporated and urban growth area of any city sponsoring the zone, unless the city is relatively large, and only some parts of the zone boundary are in or near the city.

(2) Public, public/private or community-based activities, efforts or programs that acceptably serve residents of the zone and its local area include but are not limited to the following:

(a) Job training, placement, skill development, career counseling and similar programs predominately involving such residents;

(b) Better educational opportunities, facilities and so forth that serve such residents;

(c) Planning, analyses or support for infrastructure, public safety or other public/community services or facilities that have the potential to stimulate commerce and employment growth in association with the zone;

(d) Programs that assist with financing or other matters for businesses largely started by or employing such residents;

(e) Improvements to environmental conditions, recreational resources or other qualities of the community; or

(f) Reasonable contributions to the management, marketing or other needs of the enterprise zone itself.

(3) Combining these moneys with funds obtained from authorization filing fees or other resources associated with the enterprise zone or the local community is allowable.

(4) If the payment per cosponsor is less than $1,000, the zone sponsor may:

(a) Delay spending the moneys for an indefinite period of time, pending complementary opportunities or resources; and

(b) Spend the moneys on existing programs and projects that are likely to benefit such residents, even if not exclusively.

(5) If the payment per cosponsor is between $1,000 and $10,000, the zone sponsor may:

(a) Postpone spending the moneys for up to two years; and

(b) Spend the moneys on existing programs and projects, but the sponsor shall make reasonable efforts to ensure that such residents in particular are beneficiaries of the additional expenditures.

(6) If the payment per cosponsor exceeds $10,000, the zone sponsor shall see that the moneys go to ongoing programs, special projects and so forth, but only if such expenditures have a direct and particular impact on such residents.

(7) There is no obligation to maintain or repeat for future payments any of the elections and methods utilized in accordance with this rule for a given payment.

Electronic Commerce

123-065-7000

Purpose & Scope

OAR 123-065-7000 to 123-065-7999 specify matters related to Electronic Commerce areas and the tax incentives therein, including but not limited to enterprise zones authorized for electronic commerce, such that:

(1) In these areas, businesses engaged in Electronic Commerce are eligible for the standard enterprise zone exemption and may qualify for a State tax credit based on their Electronic Commerce investment.

(2) These administrative rules:

(a) Have no bearing on enterprise zones without electronic commerce status;

(b) Do not control the fiscal parameters for the actual implementation of tax abatements by the Department of Revenue; and

Stat. Auth.: ORS 285A.075, 285C.050(5), 285C.060(1) & 285C.095(2)
Stats. Implemented: ORS 285C.050, 285C.095, 285C.100, 285C.135, 285C.185, 315.507 & 315.508
Hist.: EDD 16-2002, f. 9-12-02 cert. ef. 9-15-02; EDD 1-2005, f. & cert. ef. 2-25-05

123-065-7100

Definition of Electronic Commerce

As used in these administrative rules, for purposes of Electronic Commerce under ORS 285C.050(5):

(1) "Predominantly" means that the share of applicable transactional activity represented by Electronic Commerce exceeds 50 percent, as measured by receipts, number of orders or clients served (or an equivalent quantitative determination).

(2) Electronic Commerce means business activity and related investments that:

(a) Involve dealings with customers, suppliers, clients or other transactional entities external to the eligible business firm, predominantly by means of:

(A) Direct Internet use; or

(B) A computer network that utilizes the Internet as a platform.

(b) Entail, support or relate to the sale or purchase of goods, property or services, whether conducted on a wholesale, commercial, business-to-business, retail or other basis, in addition to subsection (1) of this rule.

(3) Electronic Commerce may include facilities, equipment, services, networks or software that are produced, operated or supplied by a third party, who facilitates, fosters or makes possible business transactions by means of Electronic Commerce consistent with sections (1) and (2) of this rule. Such a third party may be the qualified business firm for purposes of tax abatement.

(4) Electronic Commerce is not limited to the initiation or consummation of the sale, purchase or arms-length exchange, but rather may include a significant element of the transaction's overall completion or delivery, if that element:

(a) Is conducted predominantly by means of Electronic Commerce, as otherwise described in this rule, such as customer service, technical support, claims processing, client evaluation, performance measurement and so forth, even if the actual sale, purchase or contract was initiated or consummated through non-electronic means; or

(b) Naturally serves, underpins or arises from the sale or purchase of goods, property or services that are predominantly transacted by Electronic Commerce, as otherwise described in this rule, including but not limited to the following: Distribution, made-to-order assemblage, non-electronic customer support, shipping, warehousing, warranty service or any similar operation or order fulfillment-type activity.

(5) Section (4) of this rule may be understood in terms of a flowchart representing the totality of operations within the zone related to Electronic Commerce, such that if a critical node in that flowchart is handled more than 50 percent through Internet-based transactions, then:

(a) Substantially related activities both upstream and downstream of the node are also included in the definition of Electronic Commerce; and

(b) Qualified property or investment in capital assets are covered by the respective tax benefits, as much as they are otherwise allowed to be.

Stat. Auth.: ORS 285A.075, 285C.050(5) & 285C.060(1)
Stats. Implemented: ORS 285C.050, 285C.135, 285C.180, 285C.185 & 315.507
Hist.: EDD 16-2002, f. 9-12-02 cert. ef. 9-15-02; EDD 1-2005, f. & cert. ef. 2-25-05

123-065-7200

Enterprise Zones and Electronic Commerce

For purposes of an enterprise zone authorized/designated for Electronic Commerce under ORS 285C.095:

(1) It may be any enterprise zone designated by the Director and defined under ORS 285C.050(8), regardless of how or when, or whether it is urban or rural, but the effective date of designation of the enterprise zone must precede or coincide with its authorization for Electronic Commerce status.

(2) If for whatever reason the underlying enterprise zone terminates, Electronic Commerce status ends too, without harm to any exemption from property taxes due to an authorized business firm consistent with ORS 285C.245(1).

(3) Electronic Commerce status applies fully to the entire area of an enterprise zone including areas added by a subsequent change to the zone's boundary.

(4) The sponsor of an enterprise zone with Electronic Commerce status may revoke that status by resolution(s), such that:

(a) The Director shall order the revocation of Electronic Commerce status in that zone, setting the effective date thereof;

(b) Any business firm eligible only on that basis shall be treated for purposes of exemptions, as if the zone had terminated on the date specified by the Director; and

(5) Respective to section (2) or (4) of this rule, the Department shall seek applications from zone sponsors, either subsequently, or in anticipation that an existing enterprise zone with Electronic Commerce status will terminate by operation of law. Such a preexisting (Electronic Commerce) enterprise zone needs to also reapply for Electronic Commerce in order to be re-designated as such, for which it has no special claim except as described in OAR 123-065-7300(5).

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.095
Hist.: EDD 16-2002, f. 9-12-02 cert. ef. 9-15-02; EDD 1-2005, f. & cert. ef. 2-25-05; EDD 1-2007(Temp), f. & cert. ef. 1-8-07 thru 7-6-07; EDD 2-2007, f. 6-15-07, cert. ef. 7-1-07

123-065-7300

Application and Designation

(1) An application by an enterprise zone in accordance with ORS 285C.095 must consist of at least two sets of items:

(a) Copy of a resolution newly adopted by each governing body of the zone sponsor, consistent with its charter, by-laws or ordinance, that requests designation for Electronic Commerce; and

(b) A completed form as prescribed by and available from the Department and any supporting materials.

(2) The Department shall evaluate the general merit of authorizing the applicant zone for Electronic Commerce status (through comparative evaluation of multiple applications, if necessary) based on the responses from the applicant zone sponsor respective to the following factors:

(a) Significance associated with the location and attributes of the cities, business sites and so forth that are in the current zone boundary, as well as future boundary change requests (to be considered, any such boundary change must be acknowledged in the sponsor's resolution or resolutions of application);

(b) Strategic or marketing plans, resources and readiness of the enterprise zone for local development relating to Electronic Commerce, especially as a result of major public investments;

(c) Past success in using the statutory and local incentives of the enterprise zone for inducing business development, and other comparable programs or tools;

(d) Interest and support among local businesses, community organizations and the general public for having the enterprise zone obtain Electronic Commerce status;

(e) Other local assets that support and complement Electronic Commerce activity or investments (for example, training institutions, telecommunication infrastructure, environmental initiatives);

(f) Prospective, qualifying Electronic Commerce investments that could depend on the tax incentives; or

(g) One other factor of the applicant's choosing.

(3) The Director may accept applications for or make designation of an enterprise zone for Electronic Commerce contingent on the existence of an eligible business firm that is ready to be authorized and to make a significant investment in Electronic Commerce operations in the zone, pursuant and according to policies or criteria prescribed by and available from the Department.

(4) In determining designation of an applicant enterprise zone for Electronic Commerce, the Director shall consider the results of analysis by staff or from external parties of factors in section (2) of this rule.

(5) The Director may set aside sections (2) to (4) of this rule in the case of a zone sponsor reapplying for an enterprise zone that will terminate by operation of law and seeking re-designation of its Electronic Commerce status, if such status is less than three years old.

(6) The Director shall make a final determination, which is not subject to appeal, about whether to order Electronic Commerce designation for an applicant zone.

(7) The Department shall promptly give written notification to any applicant zone sponsor rejected for Electronic Commerce designation.

Stat. Auth.: ORS 285A.075, 285C.060(1) & 285C.095(2)
Stats. Implemented: ORS 285C.095
Hist.: EDD 16-2002, f. 9-12-02 cert. ef. 9-15-02; EDD 1-2005, f. & cert. ef. 2-25-05; EDD 1-2007(Temp), f. & cert. ef. 1-8-07 thru 7-6-07; EDD 2-2007, f. 6-15-07, cert. ef. 7-1-07

123-065-7400

Enterprise Zone Designations

(1) If the Legislature allows additional Electronic Commerce designations under ORS 285C.095, the Department shall seek applications in accordance with OAR 123-065-7300 through the local zone managers of all existing enterprise zones.

(2) January 1, 2002, is the effective date of designation for the four initial Electronic Commerce enterprise zones.

(3) At the time of the last amendment of this rule (in order to establish matters for the record), the enterprise zones designated for Electronic Commerce are Cascade Locks/Hood River, Florence, Grants Pass Area, Harney County/Burns/Hines, Lincoln County, Medford Urban, Roberts Creek and Salem.

Stat. Auth.: ORS 285A.075, 285C.050(5), 285C.060(1) & 285C.095(2)
Stats. Implemented: ORS 285C.095, 285C.135, 285C.180, 285C.185 & 315.507
Hist.: EDD 16-2002, f. 9-12-02 cert. ef. 9-15-02; EDD 1-2005, f. & cert. ef. 2-25-05; EDD 1-2007(Temp), f. & cert. ef. 1-8-07 thru 7-6-07; EDD 2-2007, f. 6-15-07, cert. ef. 7-1-07

123-065-7500

Other Electronic Commerce Areas

(1) The City of North Plains in Washington County is a city designated for Electronic Commerce under ORS 285C.100, effective on March 4, 2002.

(2) All areas then or later inside the city limits or urban growth boundary of the City of North Plains are equivalent to an enterprise zone, but only for purposes of Electronic Commerce and business firms that are eligible only on that basis, under ORS 285C.050 to 285C.250 and 315.507.

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

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.100, 285C.185 & 315.507
Hist.: EDD 16-2002, f. 9-12-02 cert. ef. 9-15-02; EDD 1-2005, f. & cert. ef. 2-25-05; EDD 1-2007(Temp), f. & cert. ef. 1-8-07 thru 7-6-07; EDD 2-2007, f. 6-15-07, cert. ef. 7-1-07

123-065-7600

Enterprise Zone Eligibility

(1) A business firm engaged in Electronic Commerce and located in an Electronic Commerce enterprise zone may be eligible in other ways under ORS 285C.135, but it shall not be subject to the requirements or restrictions that these other ways entail.

(2) If an eligible business firm that originally sought eligibility based on Electronic Commerce is found to not satisfy the definition thereof, it may still be authorized or its qualified property exempt subject to another way of eligibility and the applicable requirements of the law.

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.135
Hist.: EDD 16-2002, f. 9-12-02 cert. ef. 9-15-02; EDD 1-2005, f. & cert. ef. 2-25-05

123-065-7700

Enterprise Zone and Electronic Commerce Tax Credit

For purposes of the tax credit under ORS 315.507:

(1) The capital assets comprising the Electronic Commerce investment under ORS 315.507(2) do not necessarily correspond to qualified property exempted under ORS 285C.175, although there will likely be some overlap, and such assets must:

(a) Be located in the enterprise zone (or other such designated area); and

(b) Concurrently relate to the investment in qualified property as described in section (2) of this rule.

(2) The investment in Electronic Commerce capital assets by the business firm engaged or preparing to engage in Electronic Commerce must be effectively made:

(a) During the remainder of the income/excise tax year after the firm is authorized;

(b) In an income/excise tax year that begins while the firm remains actively authorized but ends before July 1 of the first property tax year of exemption; or

(c) In an income/excise tax year that ends on or after July 1 of a property tax year, in which the qualified property is exempt under ORS 285C.175, as subject to satisfaction of applicable requirements under ORS 285C.050 to 285C.250.

(3) The third year after a credit is claimed as described in subsection (2)(a) or (b) of this rule must be a year described in subsection (2)(c) of this rule, in order to receive and keep the tax credit.

(4) This tax credit is not available in conjunction with the exemption under ORS 285C.409 (Long-Term Rural Tax Incentives).

(5) The tax credit is allowed only:

(a) For an eligible Electronic Commerce business firm that applies for authorization on or after the effective date of the Electronic Commerce designation but prior to a revocation of that designation.

(b) On applicable investments in capital assets that are made on or after the effective date of the Electronic Commerce designation but before the effective date of termination of the enterprise zone under ORS 285C.245, irrespective of any prior revocation of the Electronic Commerce designation.

Stat. Auth.: ORS 285A.075, 285C.050(5) & 285C.060(1)
Stats. Implemented: ORS 285C.050, 285C.095, 285C.100, 285C.135, 285C.140, 285C.175, 285C.180, 285C.185, 315.507 & 315.508
Hist.: EDD 16-2002, f. 9-12-02 cert. ef. 9-15-02; EDD 1-2005, f. & cert. ef. 2-25-05

Rural Renewable Energy Development Zones

123-065-8000

Purpose and Scope

OAR 123-065-8000 to 123-065-8499 specify matters related to the creation and operation of an "RREDZ," which as used in these administrative rules means a rural renewable energy development zone under ORS 285C.350 to 285C.370, such that:

(1) For an eligible business firm in an RREDZ, the standard enterprise zone exemption and associated requirements under ORS 285C.050 to 285C.250 apply essentially as they do inside an enterprise zone, except:

(a) That the firm and the firm's property qualify only insofar as they relate to facilities and activities that generate electricity from a "renewable energy resource" under ORS 469.185, including but not limited to the support or maintenance of relevant facilities; and

(b) As described in OAR 123-065-8300 and 123-065-8400.

(2) The primary purpose of RREDZs is the extension of this enterprise zone incentive to renewable energy projects, which may be far-flung or widely dispersed, in lieu of what might often involve an infeasible or physically complex amendment to the boundary of an existing enterprise zone.

(3) These administrative rules:

(a) Have no bearing on true enterprise zones, including but not limited to an enterprise zone or an eligible business firm or qualified property in an enterprise zone encompassed by an RREDZ;

(b) Do not necessarily control the fiscal parameters for the actual implementation of tax abatements by the county assessor or Department of Revenue; and

Stat. Auth.: ORS 285A.075 & 285C.370
Stats. Implemented: ORS 285C.350 - 285C.370
Hist.: EDD 1-2005, f. & cert. ef. 2-25-05

123-065-8100

Basic Points about RREDZs

(1) An RREDZ does not terminate by operation of law after any maximum length of time

(2) An RREDZ covers the entire territory of the designated:

(a) City including subsequent annexations; or

(b) County or counties whether outside corporate limits or not.

(3) An RREDZ is permitted anywhere in this state, except in one of the counties listed in OAR 123-065-0090(5).

(4) RREDZs come in one of only the following three types:

(a) City RREDZ, in that a single city's governing body applied to the Department for designation, and the city is the sponsor of the RREDZ;

(b) County RREDZ, in that a single county's governing body applied to the Department for designation, and the county is the sponsor of the RREDZ; or

(c) Multi-county RREDZ, in that each governing body of two or more counties jointly applied to the Department for designation, such that:

(A) The counties are contiguous one to another, but do not necessarily all share a single common border in the case of three or more counties; and

(B) Only one of the counties serves as the zone sponsor.

(5) In appointing the local RREDZ manager, the sponsor is encouraged to select someone, who also serves as local zone manager for an enterprise zone, whenever possible.

(6) There is no particular limit on the number of RREDZs statewide, although a city or county may not have two or more concurrent designations, with the following distinctions:

(a) A city may have a designation, even if inside a county designated as an RREDZ; or

(b) A county may itself be designated an RREDZ and be part of an RREDZ with one or more other counties, but it may not belong to two or more different, multi-county RREDZs.

(7) The RREDZ exemption under ORS 285C.362 on the qualified property of a qualified business firm may not be derived from more than one overlapping RREDZ designation, except if there are two or more authorizations covering property in different tax lots.

Stat. Auth.: ORS 285A.075 & 285C.370
Stats. Implemented: ORS 285C.350 - 285C.370
Hist.: EDD 1-2005, f. & cert. ef. 2-25-05

123-065-8200

Designation of a Rural Renewable Energy Development Zone

(1) To apply for designation of an RREDZ under ORS 285C.353, the city, county or multiple counties shall furnish the Department with the following:

(a) Copy of the resolution(s) requesting designation, as duly adopted by each jurisdiction within the past 90 days;

(b) The documentation as stipulated in OAR 123-065-1050 and any further indication of consultations with local taxing districts; and

(A) The jurisdiction(s) to be so designated, and in the case of a multi-county RREDZ, the county that would act as the sponsor; and

(B) The status of any previous RREDZ designation in the jurisdiction(s), including but not limited to the unused portion of the exemption limitation under ORS 285C.353(4).

(2) Subject to the accuracy and completeness of the materials provided consistent with this rule and any other information as the Department may request, as well as adherence to applicable laws and these administrative rules:

(a) The Director shall order the designation;

(b) The Director may make the date of designation effective as early as when the Department received a complete application, if so requested by the applicant; and

(3) Termination of an RREDZ may occur in accordance with ORS 285C.245(4) or (5) (with equivalent protection and allowances under ORS 285C.245(1) for any authorized or qualified business firm in the RREDZ at that time, as would apply to termination of an enterprise zone):

(a) For a multi-county RREDZ all counties must adopt a resolution seeking termination under ORS 285C.245(4), not only the sponsor.

(b) The Director shall not re-designate any RREDZ that corresponds to one so terminated.

(4) If the application is for a subsequent additional designation corresponding to an existing RREDZ, then the existing RREDZ ceases, and the new designation replaces it effective on January 1 directly following the last date on which a resolution of application was adopted, so that:

(a) Any authorized business firm in the previously existing RREDZ belongs to the newly designated RREDZ for qualification of property first placed in service as of an assessment year beginning on or after the January-1 date, on which the new RREDZ takes effect (regardless of the application of authorization's date of submission or approval); and

(b) Any unused portion of the previous RREDZ's exemption limitation under ORS 285C.353(4) ceases to exist, and only the new RREDZ's exemption limitation is available for exemptions beginning in subsequent tax years.

Stat. Auth.: ORS 285A.075 & 285C.370
Stats. Implemented: ORS 285C.350 - 285C.370
Hist.: EDD 1-2005, f. & cert. ef. 2-25-05; EDD 1-2007(Temp), f. & cert. ef. 1-8-07 thru 7-6-07; EDD 2-2007, f. 6-15-07, cert. ef. 7-1-07

123-065-8300

Limitation of Exempt Real Market Value

Under ORS 285C.353(4), each RREDZ designation allows for cumulative exemptions on qualified property up to but not exceeding a certain amount of value over the life of the RREDZ:

(1) Such value is the property's real market value (RMV) on the assessment date of the first year that the authorized business firm claims the exemption (see OAR 123-065-8200(4) in the case of a subsequent additional RREDZ).

(2) The sponsor shall coordinate with the county assessor to track the amount of this limitation that former/ongoing exemptions have used and the remaining, unused portion. (If the assessor later disqualifies affected property and collects the property taxes back, then the RMV of the disqualified property increases the unused portion for future use in the same RREDZ)

(3) The exemption limitation described in this rule equals the amount specified in the resolution(s) adopted by the city, county or counties in applying for the RREDZ, and any such specified amount must be:

(a) Less than or equal to the maximum under ORS 285C.353(4)(d); and

(b) In the event of a subsequent additional RREDZ, greater than the unused portion of the previous RREDZ's exemption limitation.

(4) If any such resolution fails to specify an exemption limitation for the RREDZ or two or more such resolutions comprising a joint application disagree as to the amount, then the limitation for that RREDZ defaults to the maximum allowed by law.

(5)(a) If new qualified property first subject to exemption in a single year will exhaust the exemption limitation, then the exemption or exemptions are allowed only up to the point at which the property's RMV equals the unused portion; and

(b) In the case of two or more qualified firms, the assessor shall pro-rate the unused portion among them commensurate with the total value of each one's property.

123-065-8400

Further Distinctions from an Enterprise Zone Exemption

Other differences for an RREDZ exemption in contrast to the provisions of ORS 285C.050 to 285C.250 include (but are not necessarily limited to) the following:

(1) The application for authorization must 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 what is described in the application.

(3) For purposes of a business firm's being authorized 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 relates only to employees engaged a majority of their time in eligible renewable energy operations within the RREDZ.

(4) 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 written agreement is executed, 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.

(5) As used in ORS 285C.350, "renewable energy" necessitates that electricity is derived to a significant degree from the combustion, harnessing or utilization of the renewable energy resource, but it may also be converted (even for the most part) into other energy forms, including but not limited to steam, heat or mechanical power.

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