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OREGON BUSINESS DEVELOPMENT DEPARTMENT

 

DIVISION 650

ENTERPRISE ZONE CREATION AND AMENDMENT

123-650-0001

Purpose and Scope

(1) This division of administrative rules governs the existence, modification and termination of regular enterprise zone areas under ORS 285C.050 to 285C.250 (Oregon Enterprise Zone Act) that are:

(a) Sponsored by city, port and county governments; and

(b) Designated initially subject to a measure of economic hardship.

(2) Subsequent divisions in this chapter address related types of designations and the tax incentives for business firms in the various zones, in particular, see OAR 123-656 for tribally and federally related enterprise zones and OAR 123-668 for guidelines respective to local zone sponsorship.

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.045 & 285C.050 – 285C.250
Hist.: OBDD 23-2010, f. & cert. ef. 6-14-10; OBDD 15-2015, f. & cert. ef. 11-12-15

123-650-0066

Enterprise Zone Existence

(1) On and after October 5, 2015, there is no statewide numerical limit on enterprise zone designations or re-designations under ORS 285C.065 and 285C.250.

(2) In addition, there are allowed:

(a) Designations based on a federal enterprise zone directly under ORS 285C.085; and

(b) Reservation enterprise zones and reservation partnership zones, under ORS 285C.306.

(3) As of October 4, 2015, 68 enterprise zones were in existence by order of the Director in accordance with statutory provisions, as follow:

(a) Eighteen under ORS 285C.065 and former ORS 285C.075 and 285C.080;

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

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

(d) Two reservation enterprise zones under ORS 285C.306(2).

(4) Like enterprise zones described in section (1) or subsection (2)(a) of this rule, the 66 enumerated by subsections (3)(a) and (b) of this rule shall continue to exist and may be amended under ORS 285C.050 to 285C.250 until terminating — and the local zone sponsor may re-designate them as otherwise allowed — before July 1, 2025, at which point such zones are disallowed under ORS 285C.255, as described in OAR 123-650-9100(4).

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.050 - 285C.250 & 285C.255
Hist.: OBDD 13-2012, f. & cert. ef. 8-15-12; Remumbered from 123-650-0075 by OBDD 15-2015, f. & cert. ef. 11-12-15

123-650-0075 [Renumbered to 123-650-0066]

123-650-0100

Definitions

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

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

(2) “Original enterprise zone,” as used in ORS 285C.115(2) for purposes of boundary changes, means the area within the boundary of the zone at the time when it was most recently (re-)designated, irrespective of any intervening boundary change.

(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 currently estimated population of Census Statistical Units that tightly envelope unincorporated zone areas; or

(b) For urban enterprise zones, the currently estimated population of Census Statistical Units that tightly envelope zone areas, and it may also include any associated residential area or group of such areas proximate to the zone boundary that encompass a populace, whom the Sponsoring Government(s) explicitly intend to help through employment opportunities and relevant public or private efforts or programs in relation to the zone.

(4) Sponsoring Government means a county, port or city designating an enterprise zone (or a district that has effectively the same governing body as the county, port or city, and that contains all of the city, port or county territory inside the proposed zone). A Sponsoring Government may be any city, port or county in Oregon, or combination of such jurisdictions as provided in OAR 123-650-0500, except as prohibited in OAR 123-650-4900(2).

(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).

Stat. Auth.: ORS 285A.075, 285C.060(1) & 285C.066
Stats. Implemented: ORS 285C.050 – 285C.250
Hist.: OBDD 23-2010, f. & cert. ef. 6-14-10; OBDD 13-2012, f. & cert. ef. 8-15-12; OBDD 15-2015, f. & cert. ef. 11-12-15

123-650-0500

Local Government Sponsorship or Consent

For purposes of enterprise zone designations, re-designations or boundary changes:

(1) The zone shall be sponsored by, and only by, the governing body of every city, port or county, in whose territory the zone is located, with the following exceptions:

(a) A port need not cosponsor a zone, if both of the following are true:

(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.

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

(A) The zone is located completely in the incorporated territory of the city or cities that sponsor(s) 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 unincorporated territory inside the zone lies within the urban growth area (UGA) between the corporate limits and the urban growth boundary (UGB) of a city that sponsors the zone. (Inside a regional or metropolitan urban growth boundary, any such UGA must be subject to annexation by the sponsoring city)

(c) A city need not cosponsor a zone, if all of the following are true:

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

(B) The city granted consent for the zone to exist in its territory through a resolution adopted by the city’s governing body based on port/county sponsorship; and

(C) Less than the zone’s entire area lies within less than the entire incorporated territory of the city.

(2) City/county/port sponsorship or consent is permissible in combinations not specifically described by section (1) of this rule.

(3) Resolutions by the governing body of a city, port or county for purposes of consent need simply identify the enterprise zone, and that its containing territory inside the city, port or county is acceptable, supported or the like.

(4) Under ORS 285C.068 a port may become a cosponsor of an existing zone that contains parts of the port district, at any time, by adopting a resolution with applicable elements of OAR 123-650-4800(2) and submitting an executed copy of it to the Department with consent resolutions from all existing cosponsors.

(5) If a city annexes into its jurisdiction any area of an existing zone, of which the city is not a sponsor, or to which the city has not consented:

(a) The tax exemptions under ORS 285C.175 of authorized or qualified business firms in the annexed area shall continue unaffected, enjoying the same protection under relevant provisions of law and this chapter of administrative rules for location in a terminated enterprise zone.

(b) An eligible business firm proposing an investment in qualified property at a location in the annexed area of the zone may be authorized on a contingent basis, such that the firm may neither qualify nor receive a property tax exemption on such property unless and until such time as either the city:

(A) Consents by resolution of the city’s governing body that the zone as it currently exists may contain areas that have or may be annexed; or

(B) Becomes a new cosponsor of the zone by resolutions adopted by the city and the zone sponsor and submitted to the Department, in accordance with applicable elements of OAR 123-650-4800(2) and 123-650-4900.

Stat. Auth.: ORS 285A.075, 285C.060(1) & 285C.066
Stats. Implemented: ORS 285C.050, 285C.065, 285C.066, 285C.068, 285C.115 & 285C.250
Hist.: OBDD 23-2010, f. & cert. ef. 6-14-10; OBDD 15-2015, f. & cert. ef. 11-12-15

123-650-0600

Zones Allowed per Jurisdiction

Enterprise zone designations, re-designations and boundary changes are subject to negative determinations under ORS 285C.074 and 285C.117, if needlessly redundant, in that:

(1) Whenever practical, would-be Sponsoring Government(s) are strongly encouraged to join together with other city, port and county cosponsors through mutual re-/designations and boundary changes, in order to:

(a) Complement the standards under ORS 285C.120(2)(b) as addressed in OAR 123-650-1100(5);

(b) Make the most of limited resources among agencies, especially at the local level, for administrating and marketing every enterprise zone in the pursuit of business development; and

(c) More generally raise visibility and foster intercommunity collaboration around regional economic development.

(2) Cities shall actively explore cosponsoring an enterprise zone, as allowable by OAR 123-650-0700 to 123-650-1100, if both cities are interested in including area inside a zone, or if one already sponsors a zone and the other is so interested, and their respective urban growth boundaries (UGBs) are separated:

(a) By 5 miles or less in any case; or

(b) In the case of a rural zone in sparsely populated counties:

(A) By 15 miles or less; or

(B) By more than 15 miles for any city with a population of 2,000 or less, whenever the waiver described in OAR 123-650-1100(4) is feasible and appropriate.

(3) The obligation in section (2) of this rule extends equivalently to ports or counties that are cosponsors or would-be Sponsoring Governments, including but not limited to areas outside of UGBs being brought into an enterprise zone that is (also) sponsored by one or more cities.

(4) Specifically for purposes of ORS 285C.066(2), only one enterprise zone may:

(a) Exist at any one time inside the UGB of any city, whether or not it sponsors the zone, except that two zones are allowed inside the UGB of a city with a population of 100,000 or more.

(b) Be designated per county for a zone containing solely unincorporated territory, as sponsored by the county or a port in that county but not by any city, although the Department may still allow an exception if finding that:

(A) The designation or amendment comprises near areas is two or more counties; or

(B) A second such designation would serve one or more exigent business development opportunities, and that distances within the county or other factors render other options impractical or counterproductive.

Stat. Auth.: ORS 285A.075, 285C.060(1), 285C.066 & 285C.120(2)(b)
Stats. Implemented: ORS 285C.060, 285C.066 & 285C.120
Hist.: OBDD 15-2015, f. & cert. ef. 11-12-15

123-650-0700

Rural and Urban Designations

As defined in ORS 285C.050, an “enterprise zone” is categorized as either “rural” or “urban” under ORS 285C.050(17) or (21), such that:

(1) As used in ORS 285C.050(21), “regional or metropolitan urban growth boundary” means the UGB encompassing the principal Oregon city or cities of a federally established metropolitan statistical area (MSA) based on the MSA’s title, and any other city that jointly undertakes comprehensive planning with such a city to determine their mutual UGB(s).

(2) Subject to change in the definition of federal MSAs in Oregon, or in joint arrangements for inter-city planning, section (1) of this rule currently pertains to the UGBs for:

(a) Albany

(b) Bend and Redmond;

(c) Corvallis;

(d) Eugene;

(e) Grants Pass;

(f) Medford;

(g) Portland and Hillsboro with all other cities inside the Metro UGB; and

(h) Salem with Keizer.

(3) An enterprise zone may be neither designated, re-designated nor amended to include areas both inside and outside a regional or metropolitan urban growth boundary.

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

(5) If such a change, a UGB amendment or some other occurrence causes a regional or metropolitan urban growth boundary to intersect an existing enterprise zone boundary, the zone’s categorization as either urban or rural shall remain as it is. If a subsequent modification or occurrence situates the zone entirely outside or inside of that boundary, then the zone’s categorization as rural or urban may switch accordingly at that time.

Stat. Auth.: ORS 285A.075, 285C.060(1) & 285C.066
Stats. Implemented: ORS 285C.050 - 285C.250
Hist.: OBDD 23-2010, f. & cert. ef. 6-14-10; OBDD 13-2012, f. & cert. ef. 8-15-12; OBDD 15-2015, f. & cert. ef. 11-12-15

Dimensions and Boundaries

123-650-1000

Size and Distances

For purposes of an enterprise zone designation, re-designation or boundary change:

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

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

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

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

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

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

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

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.050, 285C.090 & 285C.120
Hist.: OBDD 23-2010, f. & cert. ef. 6-14-10; OBDD 13-2012, f. & cert. ef. 8-15-12; OBDD 15-2015, f. & cert. ef. 11-12-15

123-650-1100

Extended Rural Distances

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

(1) This rule has no bearing on total enterprise zone area as limited in OAR 123-650-1000(3) and applies only to rural enterprise zones that are or will be at least partially outside a county, for which the latest estimate of the county’s total population divided by its area exceeds 100 persons per square mile, known for purposes of this rule as a “densely populated county.”

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

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

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

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

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

(a) As specifically requested by the Sponsoring Government(s) or zone sponsor in the documentation submitted to the Department as described in OAR 123-650-4100 or 123-650-4400;

(b) Such that the waiver is approved by the Director in the context of the Department’s issuing a positive determination as described in OAR 123-650-4900; and

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

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

(a) The prospect of serious challenges or difficulties arising if separate enterprise zones were created, including but not limited to an isolated site or small community that would be less effective or efficient on its own as a zone;

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

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

Stat. Auth.: ORS 285A.075, 285C.060(1) & 285C.120(2)(b)
Stats. Implemented: ORS 285C.050, 285C.090 & 285C.120
Hist.: OBDD 23-2010, f. & cert. ef. 6-14-10; OBDD 13-2012, f. & cert. ef. 8-15-12; OBDD 15-2015, f. & cert. ef. 11-12-15

123-650-1500

Mapping and Defining Zone Boundary

Any enterprise zone designation, re-designation or boundary change shall demonstrate adherence to OAR 123-650-1000 or 123-650-1100 by including all of the following with the documentation submitted to the Department under ORS 285C.074 or 285C.117:

(1) An estimate to the nearest 0.1 square miles of the entire zone area (after accounting for area added or removed due to any boundary change).

(2) Map or set of maps drawn to scale with north directional arrow, legend/scale and title using the zone name, as well as clear representation of the zone boundary, including:

(a) An overview map showing the entire zone on a single page; and

(b) As necessary or appropriate, inset, subsidiary or supplemental maps to:

(A) Provide detail for portions of the zone, as referenced or linked to the overview map; and

(B) Specify areas added or removed.

(3) Narrative description of the overall enterprise zone boundary in a continuous fashion (incorporating any boundary change) that corresponds to the mapping in section (2) of this rule, but which would overrule the mapping in the event of any material discrepancy. The description shall rely on one of the following methods that exactly corresponds to the zone boundary, or a combination of them if fitting together clearly, comprehensively and without redundancy:

(a) Professional metes and bounds surveying;

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

(c) Official borders or demarcations such as city limit, urban growth boundary, county line or right of way based on specifically dated citations or documents (zone boundary does not change along with any subsequent change to the demarcation);

(d) Whole cadastral sections, quarter sections and so forth; or

(e) Listing of tax lots in relation to specified and dated county assessor maps with full cadastral survey (T-R-S) numbering:

(A) In a table with two or more other data for each tax lot that further identify it, such as street address, legal description, zoning, area, tax code, coordinates or account number; and

(B) Preferably supplemented with copies of the respective assessor maps.

(4) The following items, which are submitted electronically to the Department (even if other items in this rule need not be):

(a) A single set of geo-coded data (geographic information systems (GIS) shape file) specific only to that entire zone (pursuant to any boundary change) and not in combination with any other enterprise zone; and

(b) Image file corresponding to subsection (2)(a) of this rule (silently incorporating any boundary change).

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.060, 285C.065, 285C.074, 285C.085, 285C.090, 285C.115, 285C.117, 285C.120 & 285C.250
Hist.: OBDD 23-2010, f. & cert. ef. 6-14-10; OBDD 15-2015, f. & cert. ef. 11-12-15

Enterprise Zone Designations and Amendments

123-650-4000

Initiating Procedures for Zone Designation

To designate or re-designate an enterprise zone under ORS 285C.065 or 285C.250:

(1) The process begins with the Sponsoring Government(s) sending a formal advisory to the Department of its intent to re-/designate. This may happen at any time for a new designation, but for concurrent re-designation, the local zone sponsor shall timely provide the advisory under ORS 285C.074 after January 1 but no later than on or around April 16, preceding July 1 when the existing zone will have Terminated-by-Statute.

(2) The Department will respond promptly to such an advisory, which if by telephone will be memorialized at least through email, consulting with the Sponsoring Government(s) about:

(a) The utility, impacts and responsibilities of re-/designating and having an enterprise zone;

(b) Steps to re-/designate a zone, including but not limited to formally sending notice to and consulting with local taxing districts, after this consultation by the Department has taken place;

(c) Documentation, as well as sample resolution language, needing to be submitted to the Department;

(d) Economic hardship criteria and possible assistance in identifying measures for the local area;

(e) Prohibitions in OAR 123-650-4900(2); and

(f) Other matters as appropriate or necessary.

(3) Not less than 45 days after advising the Department, the Sponsor Governments may submit the enterprise zone re-/designation, as described in OAR 123-650-4100 (electronically as desired).

Stat. Auth.: ORS 285A.075, 285C.060(1) & 285C.067(2)
Stats. Implemented: ORS 285C.065, 285C.067, 285C.074, 285C.078 & 285C.250
Hist.: OBDD 15-2015, f. & cert. ef. 11-12-15

123-650-4100

Documentation Pursuant to Zone Designation

Upon designation or re-designation of an enterprise zone, for purposes of ORS 285C.074:

(1) The Sponsoring Government(s) must complete a form as prescribed by and available from the Department and submit it to the Department (at: Business Development, Business Oregon, State Lands Building Suite 200, 775 Summer Street NE, Salem OR 97301-1280, see www.oregon4biz.com) along with all applicable documentation, respective to:

(a) Contact information and the name of the zone based on place names or common geographic terms (which if the same as a previous or terminating zone’s name will include a “II, III, IV, …” suffix, but only in the context of this submission);

(b)(A) Identifying the Sponsoring Governments and consenting jurisdictions for purposes of OAR 123-650-0500, and hotel/resort elections by city or county sponsors; and

(B) Including an executed copy of the resolution adopted by the governing body of each Sponsoring Government according to OAR 123-650-4800(1) and (2), as well as any consenting jurisdiction, consistent with the charter, by-laws or ordinances of the city, port or county;

(c) Timely notice and consultation with local taxing districts for OAR 123-650-5000 to 123-650-5200;

(d) Zone boundary, size and dimensions consistent with OAR 123-650-1500; and

(e) Data, statistics and so forth on social and economic conditions in OAR 123-650-4200.

(2) The form in section (1) of this rule and associated instructions prepared by the Department are hereby incorporated into and made part of these administrative rules, including but not limited to the proper aggregation and use of economic data.

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.060, 285C.065, 285C.066, 285C.067 & 285C.074
Hist.: OBDD 15-2015, f. & cert. ef. 11-12-15

123-650-4200

Mandatory Economic Need for Zone Designation

For purposes of designation or re-designation, the local area of the enterprise zone must exhibit economic hardship, in that:

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

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

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

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

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

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

(3) For purposes of subsections (1)(a), (b) or (c) and section (2) of this rule, economic statistics of the metropolitan statistical area that contains an enterprise zone may substitute for corresponding statewide figures as the basis of comparison.

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.060, 285C.074 & 285C.090
Hist.: OBDD 15-2015, f. & cert. ef. 11-12-15

123-650-4400

Documentation with Boundary Changes

The zone sponsor (including with any new cosponsor) may change the boundary of the enterprise zone under ORS 285C.115 and make submission to the Department (electronically as desired), at any time, for purposes of ORS 285C.117. The submission consists of a memorandum prepared by the sponsor with information and all applicable documentation, respective to:

(1) Submitter–contact, relevant background about the amendments, and any change in the zone name;

(2) Identifying every current and new (co)sponsor or consenter, along with an executed copy of the resolution adopted by the governing body of each sponsoring jurisdiction according to applicable provisions of OAR 123-650-4800(2), as well as any (re-)consenting jurisdiction, consistent with the charter, by-laws or ordinances of the city, port or county;

(3) Timely notice to local taxing districts in OAR 123-650-5300 and related matters;

(4) Zone boundary, size and dimensions in accordance with OAR 123-650-1500;

(5) Data, statistics and so forth on social and economic conditions for OAR 123-650-4500; and

(6) Other issues, as necessary or appropriate, in OAR 123-650-4600.

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.060, 285C.066, 285C.115 & 285C.117
Hist.: OBDD 15-2015, f. & cert. ef. 11-12-15

123-650-4500

Economic Conditions for Areas Added by Boundary Changes

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

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

(a) From the time of the latest re-/designation of the zone; or

(b) As are most recently available.

(2) As part of the boundary change documentation, general commentary shall suffice for this issue if it is readily apparent that any area added to the zone:

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

(b) Contains and borders only residential areas with signs of economic blight or a preponderance of markedly low-income households.

(3) If circumstances are less plain than in section (2) of this rule, then the documentation shall include a suitable comparison based on one or more economic measures of the original enterprise zone to Census Statistical Units that contain, overlap or appropriately abut areas added to the zone.

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

(a) Less than 25 percent of their land zoned or used for residential development; or

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

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.060, 285C.115 & 285C.117
Hist.: OBDD 15-2015, f. & cert. ef. 11-12-15

123-650-4600

Additional Issues with Boundary Changes

With respect to any enterprise zone boundary change under ORS 285C.115:

(1) Usable land described in section (2) of this rule must comprise:

(a) At least 25 percent of what is added (except as specially allowed by the Department); and

(b) None of what is removed (except in the case of a concurrent boundary change or re-/designation that would presently place such land in another enterprise zone).

(2) Usable land for purposes of section (1) of this rule includes sites with qualities respective to eligible business firms under ORS 285C.130, such as being:

(a) Zoned outright for uses germane to such firms consistent with an acknowledged comprehensive land use plan or expected amendments to the plan;

(b) Free of serious impediments to development and use due to cultural or environmental concerns or regulations;

(c) Served or realistically serviceable with infrastructure, road access, utilities and so forth that are at least potentially adequate for such firms’ operations; and

(d) Vacant or physically available for substantial new business occupancy, expansions or improvements.

(3) The changes must retain (never remove):

(a) Any site identified as the location for proposed qualified property in an application for authorization that is or will be approved and was submitted before the boundary change took effect, and that is neither inactive under ORS 285C.165 nor fully utilized for exemptions under ORS 285C.175; and

(b) One half of the land or actual area comprising the original enterprise zone.

(4) If a site were removed containing operations or qualified property of any authorized or qualified business firm, such a firm shall enjoy the same protection under relevant provisions of law and this chapter of administrative rules for location in a terminated enterprise zone.

(5) An enterprise zone as amended must still adhere to OAR 123-650-0500 to 123-650-1100. For example with respect to OAR 123-650-0700, if modification of a local, state or federal definition or delineation caused a previously existing regional or metropolitan urban growth boundary to intersect an existing rural zone, subsequent changes to that zone boundary may not add area that was within the former regional or metropolitan urban growth boundary as it existed before intersecting the zone.

(6) A city, port or county that previously consented to including territory inside the zone does not need to be involved with a boundary change that adds area only outside of its jurisdiction, but it does need to consent again in order for any more of its territory to be included in the zone.

(7) Neither such a change nor any comparable procedure allows a sponsoring city, port or county government, to:

(a) Make hotel/resort businesses eligible unless such firms are eligible in the zone already, even in the case of a new city or county cosponsor that is joining the zone; or

(b) 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
Stats. Implemented: ORS 285C.050, 285C.060, 285C.066, 285C.115 & 285C.117
Hist.: OBDD 15-2015, f. & cert. ef. 11-12-15

123-650-4800

Local Resolutions and Hotel/Resort Option

For purposes of city, port or county resolutions to designate, re-designate or amend an enterprise zone:

(1) The resolution by a Sponsoring Government shall be adopted at least seven days after the meeting described in OAR 123-650-5100, in the case of re-/designation.

(2) The resolutions shall:

(a) Acknowledge all other cosponsoring parties to the re-/designation or boundary change, if any;

(b) Declare that the sponsor will (jointly) fulfill duties under ORS 285C.050 to 285C.250, including but not limited to observing ORS 285C.105 in accordance with OAR 123-668;

(c) Clarify that the zone does not compromise or override prevailing zoning, regulatory and permitting ordinances, processes or restrictions, or affect acknowledged comprehensive plans for land use;

(d) As deemed significant and appropriate by the sponsoring government, affirm goals in having the zone, recount zone history, underscore key characteristics of the re-/designation or boundary change, or report actions taken for purposes of public involvement, including but not limited to the nature and outcome of communication or interaction with local taxing districts; and

(e) Stipulate any election or restriction for hotel/resort eligibility under ORS 285C.070 by cities and counties, so that a business operating a hotel, motel or destination resort is eligible under ORS 285C.135(5)(c) in the enterprise zone or in unrestricted parts of the zone, for which:

(A) Any such election or restriction must be uniformly reflected in the resolution(s) (jointly) adopted by every sponsoring city or county and by any consenting city or county to which a restriction applies.

(B) Any restriction makes such businesses ineligible in those parts of the zone throughout the incorporated area of the city or unincorporated area of the county, to which the restriction pertains, which may be a city or county merely consenting to the zone.

(C) With a boundary change, a positive hotel/resort election may not be made, but only a restriction to the jurisdiction of a city or county newly joining or consenting to an enterprise zone that has an existing hotel/resort election, and any such restriction may not be revised once the boundary change takes effect.

(D) In the case of re-/designation, cities and counties may (jointly) revise an election, restriction or lack of one, regardless of what is in the resolution(s) of re-/designation, by resolution(s) adopted not more than six months after the effective date of re-/designation.

(E) A prior election or restriction for hotel/resort eligibility does not carry over to any re-designation, such that hotel/resorts are ineligible (based on the date of application for authorization) throughout any newly re-designated zone without a positive election as described in this subsection.

(3) The sponsor of an enterprise zone that has an existing hotel/resort election may at any time revoke that election in its entirety or in a particular city or county jurisdiction (thereby effecting a restriction), irreversibly for the remainder of the enterprise zone’s current period of designation, but:

(a) For a zone with two or more cosponsors, the revocation must be consistently expressed in resolutions adopted by all of them, including but not limited to any port; and

(b) Copies of the resolution(s) of such revocation must be submitted to the Department to establish its effective date in terms of subsequent applications for authorization by relevant business firms.

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.065, 285C.070, 285C.074, 285C.105, 285C.115 & 285C.117
Hist.: OBDD 15-2015, f. & cert. ef. 11-12-15

123-650-4900

Agency Determinations

The Department shall thoroughly review the documentation submitted with an enterprise zone designation, re-designation or boundary change, as described in OAR 123-650-4100 or 123-650-4400, and shall notify the submitter as soon as possible of the determination under ORS 285C.074 or 285C.117, such that:

(1) Subject to procedural matters’ being in order and satisfaction of statutory requirements according to applicable parts of these administrative rules, the Department shall issue a notice of positive determination, which will establish salient features of the (amended) enterprise zone, including but not limited to the eligibility of hotel, motel and destination resort businesses, as well as the date that the re-/designation or boundary change takes effect, which shall be:

(a) The date that the last resolution of consent or sponsorship was adopted for a designation;

(b) July 1 in the case of concurrent re-designation under ORS 285C.250 if the last sponsoring or consent resolution was adopted on or before June 30;

(c) The date that the last resolution by any cosponsor was adopted for a boundary change; or

(d) For any resubmission pursuant to section (3) of this rule:

(A) The date coinciding with the Department’s receipt of a complete resubmission (in terms of all items needing to be revised, modified or redone), inasmuch as the Department deems the extent of necessary revisions or the amount of time that has elapsed to have been significant; or

(B) The date of adoption of the last applicable resolution replacing or supplementing prior resolutions.

(2) The determination is otherwise negative and the enterprise zone or any amendment to the enterprise zone does not take effect, including but not limited to cases otherwise prohibited in accordance with OAR 123-650-0500 to 123-650-0700 or where:

(a) Documentation is inaccurate, inapplicable, incomprehensible, or insufficiently current including but not limited to section (4) of this rule;

(b) The enterprise zone or an amendment encompasses area in any existing enterprise zone that will not have been Terminated-by-Statute or removed by another boundary change before the requisite effective date; or

(c) A Sponsoring Government or new cosponsor is a city, port or county that sponsored an enterprise zone terminated by order of the Director under ORS 285C.245(3) to (5) within the past 10 years by the time of the requisite effective date, other than a county or port if a port/city also sponsored the terminated zone and none of the new enterprise zone area was inside that terminated zone.

(3) The Department shall promptly issue a formal explanation (at least by email) to the Sponsoring Government(s) or zone sponsor subject to a negative determination, regarding unmet requirements or deficiencies with documentation, as well as what might be done for resubmission that entails either:

(a) More or less minor revisions or additions to documentation, with which the Department may assist, and for which a relatively quick resolution would allow the re-/designation or boundary change to take effect as described in subsection (1)(a) to (c) of this rule; or

(b) Fundamental modifications to the re-/designated or amended zone or its associated documentation, which could also necessitate redoing otherwise faultless steps or documentation with respect to the time limits in section (4) of this rule.

(4) Relative to the date of re/submission, the following are not acceptable for purposes of a positive determination:

(a) Economic data, statistics and so forth that have been superseded by the release or availability of the very same but newer/annually updated data or statistics;

(b) The notice to local taxing districts and any consequent consultative activities described in OAR 123-650-5000 to 123-650-5500, if the notice was sent more than a year prior; or

(c) Any sponsoring or consent resolution older than six months.

(5) For zone re-/designation, section (4) of this rule does not override the need for subsections (4)(b) and (c) and related steps to commence in due order only after the advisory to and consultation with the Department under ORS 285C.074 and 285C.078, which shall occur for re-designations only within six months of when the zone will be Terminated-by-Statute.

Stat. Auth.: ORS 285A.075, 285C.060(1), 285C.066 & 285C.067(2)
Stats. Implemented: ORS 285C.060, 285C.065, 285C.066, 285C.067, 285C.070, 285C.074, 285C.078, 285C.090, 285C.115, 285C.117 & 285C.250
Hist.: OBDD 15-2015, f. & cert. ef. 11-12-15

Local Taxing Districts

123-650-5000

Notice with Regular Zone Designation

(1) The designation or re-designation of an enterprise zone under ORS 285C.065 or 285C.250 must entail notice to and consultation with local taxing districts that:

(a) Formally commences only after the Department consults with the Sponsoring Government(s) as described in OAR 123-650-4000; and

(b) Takes place in due order before subsequently submitting documentation to the Department.

(2) The notice goes 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 area of zone designation. The county assessor should also receive notice, but it does not need to go to any taxing district that is a Sponsoring Government or a service district, urban renewal district, or the like that effectively has the same governing body as a Sponsoring Government.

(3) The Sponsoring Government(s) must send the notice at least 21 calendar days before the meeting in OAR 123-650-5100, and the notice shall include, but is not limited to:

(a) An invitation for representation from each district;

(b) An established meeting place, date and time, the scheduling of which should be coordinated with district officials known to have special interest in relevant issues;

(c) Brief background about the reasons for seeking an enterprise zone and the potential for (limited-duration) exemption(s) from taxes on future business property inside the zone boundary (subject to certain requirements);

(d) Probable timeline for consideration of resolutions for re-/designation by the Sponsoring Government(s) even if lacking exact dates;

(e) Solicitation for comments on the proposed zone to be directed at a Sponsoring Government; and

(f) Contact details for making such comments or for receiving further information.

(4) The Sponsoring Government(s) must furnish the Department with the following as part of submitted documentation:

(a) Evidence of the notice having been timely sent, including but not limited to:

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

(B) A (template) copy of the notice directed at such taxing districts in accordance with section (3) of this rule; and

(b) Any final materials and the meeting minutes arising from related consultative activities, as well as written comments received in response to the notice from any relevant taxing district.

(5) A taxing district’s objection to or lack of support has no bearing on the zone’s operation or tax abatements for business firms.

(6) The tasks stipulated in this rule shall not 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.

(7) Copies of items listed in subsection (4)(a) of this rule shall also be furnished to the Special Districts Association of Oregon (Attn: Government Affairs).

Stat. Auth.: ORS 285A.075, 285C.060(1) & 285C.067(2)
Stats. Implemented: ORS 285C.060, 285C.065, 285C.067, 285C.074, 285C.078 & 285C.250
Hist.: OBDD 23-2010, f. & cert. ef. 6-14-10; OBDD 15-2015, f. & cert. ef. 11-12-15

123-650-5100

Public Meeting for Regular Designations

For purposes of ORS 285C.067, the Sponsoring Government(s) shall conduct a public meeting (though not necessarily hold a public hearing or issue a public notice for the meeting):

(1) That occurs not less than seven days before the adoption of any resolution of designation or re-designation by a Sponsoring Government.

(2) To which the Sponsoring Government(s) send staff or community partners, who are directly involved with the re-/designation and knowledgeable about the potential of business development in the proposed zone, as well as their elected or executive officials as feasible and appropriate.

(3) At which the Sponsoring Government(s):

(a) Make available and reviews draft copies of a map of the proposed zone boundary and other such materials related to the re-/designation;

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

(c) May allot time for opening statements by each district in attendance; and

(d) Have the proceedings transcribed or recorded in some manner.

(4) That involves discussion of relevant issues and may address follow-up steps for analysis or further consultation, as well as plans for adopting resolutions and completing the re-/designation.

Stat. Auth.: ORS 285A.075, 285C.060(1) & 285C.067(2)
Stats. Implemented: ORS 285C.060, 285C.065, 285C.067, 285C.074 & 285C.250
Hist.: OBDD 23-2010, f. & cert. ef. 6-14-10; OBDD 15-2015, f. & cert. ef. 11-12-15

123-650-5200

Consultations Generally with Taxing Districts

(1) In anticipation of or subsequent to the meeting described in OAR 123-650-5100, or as otherwise warranted with an enterprise zone designation, re-designation or boundary change, the Sponsoring Government(s) or zone sponsor:

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

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

(c) Shall assist one or more districts, as requested, to estimate or better understand short or long-term effects on public revenues and service demands under particular assumptions or potentialities about enterprise zone development.

(d) May explore how to effectively resolve relevant, outstanding issues through local government permitting procedures or 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.

(2) As a consequence of consultative activities with local taxing districts, the Sponsoring Government(s) or zone sponsor:

(a) May establish arrangements or agreements with one or more districts, contingent on the zone re-/designation or boundary amendment.

(b) Shall describe any such arrangements in materials submitted to the Department, including but not limited to follow-up steps, timelines or outstanding points still subject to refinement or finalization.

(c) May formally execute and document any such arrangement or agreement, but any description of verbal pledges or understandings do not themselves create or represent an obligation by the zone sponsor.

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

Stat. Auth.: ORS 285A.075, 285C.060(1) & 285C.067(2)
Stats. Implemented: ORS 285C.060, 285C.067, 285C.074, 285C.115 & 285C.117
Hist.: OBDD 23-2010, f. & cert. ef. 6-14-10; OBDD 15-2015, f. & cert. ef. 11-12-15

123-650-5500

Notice for Boundary Changes

A change to an existing enterprise zone boundary must entail notice to local taxing districts before the submission under ORS 285C.117 to the Department that generally conforms to that described in OAR 123-650-5000, except:

(1) The notice goes not only to each taxing district in any area to be added, but also to those inside the entire, current zone area (aside from any jurisdiction joining the zone).

(2) The notice shall be sent at least 21 calendar days before adoption of the requisite resolution by the governing body of the sponsoring county. If there is no sponsoring county, notice must precede the resolution by every sponsoring city or port by 21 calendar days.

(3) There is no mandatory public meeting or other type of special consultation, but circumstances such as the addition of a new cosponsor or of extensive areas could demand further communication along the lines of OAR 123-650-5200.

(4) The submission to the Department is not complete without inclusion of relevant items listed in OAR 123-650-5000(4).

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.115 & 285C.117
Hist.: OBDD 23-2010, f. & cert. ef. 6-14-10; OBDD 15-2015, f. & cert. ef. 11-12-15

Termination of Enterprise Zones

123-650-9100

Events and Timing

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

(2) Any zone that is timely re-designated as described in section (1) of this rule and OAR 123-650-4900(1)(b) shall not itself terminate under ORS 285C.245(2) until, in effect 11 years after its designation, except as preempted by section (4) of this rule.

(3) Following the termination of an enterprise zone:

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

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

(4) Termination by programmatic sunset under ORS 285C.255(1)(c) occurs at 5:00 PM (Pacific Time) on June 30, 2025.

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.050 - 285C.250 & 285C.255
Hist.: OBDD 23-2010, f. & cert. ef. 6-14-10; OBDD 13-2012, f. & cert. ef. 8-15-12; OBDD 15-2015, f. & cert. ef. 11-12-15

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