Oregon Bulletin
Rule
Caption: Amend rules related to the Oregon
Investment Advantage
Adm.
Order No.: OBDD 4-2011
Filed with Sec. of
State: 8-31-2011
Certified to be
Effective: 9-1-11
Notice Publication
Date: 8-1-2011
Rules Amended: 123-635-0000, 123-635-0100, 123-635-0175,
123-635-0200, 123-635-0400
Subject: Basic housekeeping changes have been made throughout
the division to ensure rule consistency.
Rules Coordinator: Mindee Sublette—(503) 986-0036
123-635-0000
Purpose and Scope
These administrative rules specify procedures and
criteria necessary to guide certification under the Oregon Investment Advantage
Act for the exemption of qualified facilities from State of Oregon business
income or corporate excise taxation, as allowed under ORS 316.778 or 317.391.
These exemptions of taxable income/profits encourage businesses to invest in
new Oregon operations with new full-time employees (earning minimum
compensation levels) at qualifying facilities in counties exhibiting the worst
per capita incomes and unemployment rates statewide.
Stat. Auth.: ORS 285A.075
Stats. Implemented: ORS 285C.495,
285C.500 - 285C.506, 316.778 & 317.391
Hist.: EDD 17-2002, f. 11-27-02,
cert. ef. 12-2-02; EDD 9-2005, f. & cert. ef. 11-4-05; EDD 1-2009, f.
2-23-09, cert. ef. 2-24-09; OBDD 5-2010, f. 1-29-10, cert. ef. 2-1-10; Renumbered
from 123-155-0000, OBDD 1-2011, f. & cert. ef. 1-3-11; OBDD 4-2011, f.
8-31-11, cert. ef. 9-1-11
123-635-0100
Definitions
As used in this division of administrative rules, in
addition to definitions in OAR 123-001 (Procedural Rules), unless the context
dictates otherwise:
(1)
“Business firm” means a person operating or conducting one or more trades or
businesses for profit, and does not include any governmental agency, municipal
corporation or nonprofit corporation, other than a people’s utility district or
e joint operating agency under ORS 262.005.
(2)
“Facility” has the meaning given under ORS 285C.500(4).
(3) “Municipal Corporation” means the following with
respect to the location of a Facility proposed in an application for
preliminary certification:
(a) The county government of the county, the territory
of which contains the Facility, regardless of whether the location is incorporated
or not;
(b) A city government, if the Facility will be located
within the corporate limits or urban growth boundary of the city; and
(c) A Port for which the Facility will be located
within the territorial limits of the port district.
(4) “Qualified Location” means a site for a Facility as
described in OAR 123-635-0150.
(5) “Unique Operations” has the meaning described in
OAR 123-635-0175.
[Publications: Publications
referenced are available from the agency.]
Stat. Auth.: ORS 285A.075
Stats. Implemented: ORS 285C.500
& 285C.503
Hist.: EDD 17-2002, f. 11-27-02,
cert. ef. 12-2-02; EDD 9-2005, f. & cert. ef. 11-4-05; OBDD 5-2010, f.
1-29-10, cert. ef. 2-1-10; Renumbered from 123-155-0100, OBDD 1-2011, f. &
cert. ef. 1-3-11; OBDD 4-2011, f. 8-31-11, cert. ef. 9-1-11
123-635-0175
Unique Operations
Under ORS 285C.503(5)(e), a business firm’s operations
that comprise a Facility proposed for preliminary certification must be new
business operations respective to the site of the Facility and to any other location
in this state where the firm operates, such that:
(1) In the case of the business firm itself, the
business operations at the Facility must be categorically different from any
operations in which that same firm has recently engaged. (As an example, a
business firm may receive certification for a Facility that will manufacture or
distribute certain products here for the first time, even if the firm’s
products were already for sale in this state)
(2) In the case where the business firm has 100-percent
common equity interest or is under common control (by way of corporate,
familial or similar affiliations) with one or more other business firms
operating in this state, the business operations at the Facility must be
significantly dissimilar from any operations in which any other such firm has
recently engaged. (As an example, a corporate subsidiary is certifiable for a
new, first-in-Oregon facility fabricating a laminated wood product, even if
another subsidiary of the same parent company already makes essentially the
same product in this state, but the new operations utilize an advanced
generation of technology with which the product has higher performance
standards or weight-bearing specifications)
(3) Irrespective of section (1) or (2) of this rule,
the acquisition of a preexisting Facility does not qualify as new business
operations, unless both of the following are satisfied:
(a) The business firm invests appreciably in real
property or extensively in terms of installing personal property at the Facility
after applying for preliminary certification; and
(b) The operations that the firm will undertake
pursuant to the new investment are significantly dissimilar from operations
recently performed at the Facility.
(4) For purposes of this rule:
(a) “Categorically different” means that the existing,
in-state business operations produce, render, deliver or provide essentially
another type of good or service that is also for a distinct market segment or
customer base.
(b) “Recently” means during the 12 months before the
date, on which the Department received the application for preliminary
certification.
(c) “Significantly dissimilar” means that the existing,
in-state business operations, or the goods or services arising from them,
utilize different technology, processes, delivery methods, points in supply
chain, marketing, brand names or the like.
(5) How much a Facility’s proposed operations are like
those of any other business existing anywhere in Oregon does not matter, except
as provided under ORS 285C.503(4)(b)(A) and (5)(f), to the extent the
operations will compete with local business(es), see OAR 123-635-0270(4)(b) and
(5).
Stat. Auth.: ORS 285A.075
Stats. Implemented: ORS 285C.500
& 285C.503
Hist.: EDD 9-2005, f. & cert.
ef. 11-4-05; EDD 1-2009, f. 2-23-09, cert. ef. 2-24-09; Renumbered from
123-155-0175, OBDD 1-2011, f. & cert. ef. 1-3-11; OBDD 4-2011, f. 8-31-11,
cert. ef. 9-1-11
123-635-0200
Preliminary Certification
Application
For purposes of ultimately seeking the exemption under
ORS 316.778 or 317.391:
(1) A business firm must complete an application for
preliminary certification and send it to the Department, as follows:
(a) Using the form prescribed by the Department; and
(b) Before the following:
(A) Commencement of construction, installation or
similar activities with respect to any new property or improvements comprising
the proposed Facility; and
(B) Hiring of any employee, who will constitute the
five or more required employees at that location.
(2) The preliminary certification application must
include a fee of $500 in the form of a check or money order payable to the
Department.
(3) Applications shall be submitted to: Business
Development, Business Oregon, State Lands Building Suite 200, 775 Summer Street
NE, Salem OR 97301-1280.
[Publications: Publications
referenced are available from the agency.]
Stat. Auth.: ORS 285A.075
Stats. Implemented: ORS 285C.503
Hist.: EDD 17-2002, f. 11-27-02,
cert. ef. 12-2-02; EDD 9-2005, f. & cert. ef. 11-4-05; OBDD 5-2010, f.
1-29-10, cert. ef. 2-1-10; Renumbered from 123-155-0200, OBDD 1-2011, f. &
cert. ef. 1-3-11; OBDD 4-2011, f. 8-31-11, cert. ef. 9-1-11
123-635-0400
Application Fees, Waivers
With respect to application fees as described in this
division of administrative rules:
(1) The Department may excuse the fee or reduce the
required amount:
(a) If a business firm’s Facility readily qualifies for
certification, but as determined based on Department experience and expertise
relative to general business activity in the county, region or statewide, it:
(A) Is very small in size;
(B) Has minimal employment; or
(C) Will likely have modest revenue prospects and
little likelihood of effectively realizing much benefit from the exemption on
taxable income; or
(b) If it can be demonstrated that such a waiver will
further the goals and objectives of the program and other relevant public
policies, for example, when partial or non-imposition of the fee might promote
business investments in areas of the state where the exemption has not yet been
used.
(2) The Department shall return or refund the amount
collected to the applicant, if it rejects the application or denies the
preliminary or annual certification, pending a final order to that effect.
(3) The moneys collected would defray administrative
costs; in particular, they may be critical for offsetting legal expenses in the
event of contested case appeal.
Stat. Auth.: ORS 285A.075,
285C.503(3) & 285C.506(4)
Stats. Implemented: ORS 285C.503
& 285C.506
Hist.: EDD 17-2002, f. 11-27-02,
cert. ef. 12-2-02; EDD 9-2005, f. & cert. ef. 11-4-05; OBDD 5-2010, f.
1-29-10, cert. ef. 2-1-10; Renumbered from 123-155-0400, OBDD 1-2011, f. &
cert. ef. 1-3-11; OBDD 4-2011, f. 8-31-11, cert. ef. 9-1-11
Notes
1.) This online version of the OREGON BULLETIN is provided for convenience of reference and enhanced access. The official, record copy of this publication is contained in the original Administrative Orders and Rulemaking Notices filed with the Secretary of State, Archives Division. Discrepancies, if any, are satisfied in favor of the original versions. Use the OAR Revision Cumulative Index found in the Oregon Bulletin to access a numerical list of rulemaking actions after November 15, 2010.
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