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The Oregon Administrative Rules contain OARs filed through July 15, 2014
 
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OREGON BUSINESS DEVELOPMENT DEPARTMENT

 

DIVISION 623

STRATEGIC INVESTMENT PROGRAM

General for SIP Projects

123-623-1000

Purpose

This division of administrative rules clarifies, specifies and establishes procedures, standards and criteria for operation of the Strategic Investment Program (SIP) under ORS 285C.600 to 285C.626 and 307.123, whether inside or outside of a Strategic Investment Zone (SIZ).

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

123-623-1100

Definitions

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

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

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

(3) “Application” means the form, prescribed by the Department, and all supplemental attachments, exhibits and so forth that the Applicant completes or furnishes to the Department for the Strategic Investment Program.

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

(a) Is not Existing Property;

(b) The Applicant owns or leases;

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

(d) Conforms with the project definition established with the determination of the Commission.

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

(6) “Existing Property” means any property:

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

(b) Owned or leased, including but not limited to land or other property newly acquired, by the Applicant (regardless of location) before the Department’s effective receipt of the Application; or

(c) Already located in an SIZ, or for which any construction or installation began there, before the effective date of the SIZ’s designation and the Department’s receipt of the Application.

(7) “SIZ” means a strategic investment zone designated by the Commission at the request of the County.

(8) “Urban Project” means an Approved Project located entirely outside a “rural area,” as defined under ORS 285C.600, and hence, at least partially inside the urban growth boundary, as acknowledged and in effect on December 1, 2002, for:

(a) The Portland metropolitan region; or

(b) Any city, for which the most recently available population figure at the time of Application equals or exceeds 30,000.

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

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

123-623-1250

Eligibility Criteria of the Commission

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

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

(2) The Commission may reject or revoke an Application, if the Approved Project will or does take place in conjunction with what the Commission deems to be substantial curtailment of operations, employment or the like that is under the control of the Applicant anywhere in this state. Mitigating factors include but are not limited to:

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

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

(c) Compensating actions by the Applicant.

Stat. Auth.: ORS 285A.075 & 285C.615(7)
Stats. Implemented: ORS 285C.600 - 285C.626 & 307.123
Hist.: EDD 25-2008, f. 7-31-08, cert. ef. 8-1-08; Renumbered from 123-023-1250 by OBDD 18-2010, f. 4-30-10, cert. ef. 5-1-10

123-623-1300

Local Hiring

For purposes of ORS 285C.603:

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

(a) Jobs associated with the applicable facility or operations; and

(b) Persons employed in the construction or installation of property or by other types of contractors, vendors or suppliers related to the project or its operation.

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

(3) Such means shall not create any:

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

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

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

123-623-1400

Making Application

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

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

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

(4) The application form is available from and submitted to: Business Development, Business Oregon, State Lands Building Suite 200, 775 Summer Street NE, Salem OR 97301-1280.

(5) An Applicant may submit an incomplete Application, which the Department may accept and hold pending completion, if it includes:

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

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

(6) For subsequently acquired, constructed or installed property to avoid classification as Existing Property, in the case where the Application is incomplete for lack of local agreement/approval:

(a) The Department’s receipt of the Application is effective once the Applicant furnishes evidence that it has contacted the County to initiate steps under ORS 285C.609, including but not limited to local submission of a formal application if the County has previously established such procedures; and

(b) The Department must find the evidence sufficient in addition to satisfaction of section (5) of this rule.

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

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

123-623-1500

Contents of Application, Generally

A complete Application must include all of the following in addition to items in OAR 123-623-1525 and 123-623-1550:

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

(2) Any other information required with the Application as stated in the form, including but not limited to full company identification, relevant financial information, hiring/payroll projections, detailed description of proposed investment(s), and estimated impacts on public services.

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

(4) Commitment to provide timely notification or evidence to the county assessor or the Department of Revenue, as requested or otherwise necessary under ORS 307.123 or other applicable laws, including but not limited to the date when any taxable property is expected to be initially occupied, used or operated commercially.

(5) Commitment that any ultimate lessee is responsible for the payment of property taxes levied on leased property that comprises any part of the Approved Project.

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

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

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

Stat. Auth.: ORS 285A.075 & 285C.615(7)
Stats. Implemented: ORS 285C.600, 285C.606, 285C.609, 285C.626, 307.123
Hist.: EDD 10-2004, f. & cert. ef. 5-24-04; EDD 25-2008, f. 7-31-08, cert. ef. 8-1-08; Renumbered from 123-023-1500 by OBDD 18-2010, f. 4-30-10, cert. ef. 5-1-10

123-623-1525

Application within a Strategic Investment Zone

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

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

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

(3) Material variance between additional requirements established with designation of the SIZ and those found in the agreement for the community service fee shall render such requirements unenforceable.

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

123-623-1550

Application outside a Strategic Investment Zone

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

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

(2) A copy of the agreement:

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

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

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

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

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

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

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

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

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

123-623-1600

Consideration and Approval

(1) The Department shall review each Application.

(2) After deeming the Application complete, but potentially pending materials or information, for which the Department is reasonably assured of receipt, the Department shall make a recommendation to the Commission to either approve or deny the Application, subject to actual receipt of any pending material or information.

(3) In evaluating an Application, the Commission shall hold one or more meetings open to the public, at which the matter is an agenda item for discussion, and for which the Department has made appropriate and customary public notice.

(4) At the meeting the Commission may:

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

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

(5) The Commission may dispense with some or all of the elements in sections (3) and (4) of this rule, as otherwise permitted under ORS Chapter 192, in light of extenuating circumstances.

(6) Pursuant to evaluation of the Application, the Applicant’s investment(s) qualifies for the Abatement if the Commission finds that:

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

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

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

(d) The project will not consist of any property formerly or currently exempt under ORS 285C.175 and the Applicant is not an authorized business firm for any investment at the same location in an enterprise zone;

(e) Information described in OAR 123-623-1500 and either 123-623-1525 or 123-623-1550 is completely and accurately provided; and

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

(7) Once the Commission has taken formal action to authorize the Abatement, the Commission’s determination is final, and the Commission may reverse, revoke or withdraw it only by a formal finding that there was a material error or omission among submitted Application information, or that there is effectively a noncompliance.

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

123-623-1700

Establishment of Exempt Property

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

123-623-1800

State Application and Approval Fees

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

(1) Irrespective of subsequent approval, the following amount must accompany the Application:

(a) $5,000; or

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

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

(a) $10,000; or

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

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

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

123-623-1900

Community Service Fee

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

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

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

(2) Depositing of community service fee moneys (under ORS Chapter 294) and their allocation, distribution and transfer do not affect the Approved Project’s eligibility.

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

123-623-1950

Local Distribution of Community Service Fee

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

(a) The County;

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

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

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

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

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

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

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

(A) County government;

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

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

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

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

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

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

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

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

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

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

(6) In determining a distribution formula the Commission:

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

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

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

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

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

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

123-623-2000

Confidential Records

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

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

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

(b) The County governing body holds the public hearing under ORS 285C.609(4) (or a public notice for the hearing naming an expected Applicant) for the proposed investment outside of an SIZ.

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

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

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

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

(c) Intra-departmental advisory memoranda preliminary to a decision and draft Application information;

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

(e) Personal financial statements;

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

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

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

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

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

Strategic Investment Zones (SIZs)

123-623-3000

Physical, Temporal and Jurisdictional Existence

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

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

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

(a) Be entirely contiguous;

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

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

(d) Contain only rural area if including any rural area under ORS 285C.600.

(4) Once designated, an SIZ does not expire and may be neither terminated or geographically amended.

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

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

(b) A city, for which its urban growth boundary (as acknowledged on December 1, 2002) crosses the area of the SIZ, experiences an increase in population to 30,000 or more. (An Approved Project inside such an urban growth boundary is an Urban Project only if the Department effectively receives the Application on or after official release date of the increased population estimate or enumeration)

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

123-623-3100

Local Request for Designation

In seeking designation of any SIZ:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

123-623-3200

Department’s Receipt of Forwarded Request

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

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

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

(3) An explanation about how the SIZ area will conform to OAR 123-623-3000(3);

(4) Information pertaining to the SIZ’s inclusion, adjacency and proximity to any current city limit or urban growth boundary and to any urban growth boundary as acknowledged on December 1, 2002, of a city with a population that equals or exceeds 30,000 (or that probably will, within 10 years);

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

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

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

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

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

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

123-623-3300

Designation by the Commission

In response to a request for designation of an SIZ:

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

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

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

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

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

(A) The probability of qualifying in that SIZ;

(B) What it must do to comply;

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

(D) The consequence of noncompliance or disqualification.

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

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

123-623-3400

Operational Changes to Existing Designations

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

(2) The Department may:

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

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

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

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

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

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

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

Annual Reporting by All Benefiting Projects

123-623-4000

Submissions to Department

For purposes of ORS 285C.615(1) to (3), and a business firm benefiting from Abatement in the prior property tax year:

(1) The firm shall complete the prescribed form available from the Department and furnish it to: Business Development, Business Oregon, State Lands Building Suite 200, 775 Summer Street NE, Salem OR 97301-1280.

(2) The firm may send the form on or after January 1 next following the tax year, but the Department must receive it no later than the immediately subsequent April-1 date. The first such mandatory submission period is from January 1 to April 1, 2011, and it pertains to Abatements in effect during the 2009-2010 tax year.

(3) The reporting requirement applies to all Approved Projects, of which some property is actually exempt from taxes during the tax year (or a future one), regardless of the project’s being subject to distributions under ORS 285C.635 and 285C.639. These distributions pertain only to Approved Projects for which 2008-2009 or a later tax year is the first such year of the Abatement.

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

123-623-4100

Reporting Elements

Respective or in addition to items stipulated under ORS 285C.615(2), for the report submitted to the Department by a benefiting business firm:

(1) The report shall state the real market value of the entire Approved Project for the applicable tax year, and which one it is out of the 15 that are subject to the Abatement as confirmed by the county assessor.

(2) The report may also provide the location and assessed value of taxable property distinct from the Approved Project but improved or used in direct association with it;

(3) The report shall breakdown the amounts and recipients of fees or other (non-tax) payments made by or on behalf of the firm that arose from requirements under ORS 285C.609(5) or 285C.623(5), as well as the statutory community service fee;

(4) The report shall tabulate fees, payments, wages and compensation disbursed during the calendar year beginning midway through the applicable tax year;

(5) Relevant hires or employees are persons for whom the firm is their employer under ORS chapter 316, regardless of the person’s residency in this state;

(6) Relevant employees or jobs may consist only of those working at a site containing property of the Approved Project, or the firm may also include persons working at locations within the same county or comparable proximity in adjacent counties in this state, as the firm deems appropriate;

(7) Irrespective of location, all relevant employees or jobs must engage in or directly support business operations of the Approved Project, such that other operations represent not more than 25 percent of the person’s time spent performing work;

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

(9) Taxable income equates to the wages that the employer used in calculating amounts withheld under ORS chapter 316 for Oregon personal income taxes;

(10) Compensation includes all remuneration in the form of wages (whether taxable or not for withholdings), salary, overtime pay, shift differential, profit-sharing, bonuses, paid vacation or financial benefits such as life insurance, medical coverage and retirement plans. It does not include sales commissions, free meals, club membership, workplace amenities, payroll costs mandated by federal, state or local law, etc.; and

(11) The report shall address currently retained employees and their taxable income and compensation separately from newly created jobs or positions but consistent with the parameters described in this rule. Based on the assessment of the firm, the report shall classify such preexisting jobs or positions in terms of active or passive retention, as follows, ... ‘such that absent the investments comprising the Approved Project:

(a) The firm would have certainly eliminated them before July 1 of the Abatement’s first tax year’ (active retention); or

(b) There is significant probability that they would not have existed by June 30 at the end of the applicable tax year because of general shifting or shrinkage that in all likelihood would have ensued at directly related business operations’ (passive retention).

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

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