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OREGON BUSINESS DEVELOPMENT DEPARTMENT

 

DIVISION 650

ENTERPRISE ZONE CREATION AND AMENDMENT

123-650-0001

Purpose and Scope

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), as sponsored by city, port and county governments, and as designated by the Director of Business Oregon and initially subject to a measure of economic hardship. Subsequent divisions in this chapter address other forms of designation and the tax incentives for business firms in these zones, in particular, see OAR 123-656 for tribally and federally related designations and 123-668 for local zone sponsor guidelines.

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.050 - 285.250
Hist.: OBDD 23-2010, f. & cert. ef. 6-14-10

123-650-0075

Maximum Number of Enterprise Zones

(1) The total number of enterprise zones allowed for designation is 65 under ORS 285C.080/285C.250, plus, as addressed in OAR 123-656;

(a) Any designation based on federal enterprise zone under ORS 285C.085 (which after it terminates becomes simply another regular enterprise zone through re-designation under ORS 285C.250); and

(b) Any designation of a reservation enterprise zone under ORS 285C.306(2), for which one is allowed for each federally recognized Indian Tribe in Oregon.

(2) Subject to change, the 62 enterprise zones presently in existence arose from the following provisions;

(a) Thirteen under ORS 285C.065 and 285C.080 (which permit five more designations, of which two must originally be rural);

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

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

(d) One under ORS 285C.306(2).

(3) This rule does not pertain to:

(a) Designation of any federal enterprise zone in Oregon; or

(b) The existence of reservation partnership zones under ORS 285C.306(3), which are in addition to any maximum for the enterprise zones identified in this rule (see OAR 123-656).

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.050, 285C.065, 285C.080, 285C.115, 285C.250, 285C.306 & 285C.320
Hist.: OBDD 13-2012, f. & cert. ef. 8-15-12

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) “Applicant” means the Sponsoring Government or Governments submitting the application for an enterprise zone designation.

(2) “Census Statistical Unit” includes any standard geographic area, jurisdictional entity or administrative designation, 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 the following: County, county subdivision, city, census tract, or, census block group.

(3) “Original enterprise zone” as used in ORS 285C.115(2) means the area within the boundary of the zone at the time when it was most recently designated, irrespective of intervening boundary amendments.

(4) “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 include unincorporated territory within the boundary of the zone; or

(b) For urban enterprise zones, the currently estimated population of Census Statistical Units that include area within the boundary of the zone and in any associated Target Community for the zone.

(5) “Preexisting Enterprise Zone” means an enterprise zone:

(a) Designated within three years of an enterprise zone’s being Terminated-by-Statute;

(b) For which at least one-half of its cosponsors comprised a majority of the cosponsors of the enterprise zone Terminated-by-Statute; and

(c) Recognized as the continuation of the previous enterprise zone, even though it is technically a new zone designation.

(6) “Round of Designation” means the period, not less than 90 days, beginning with the public notice and ending no sooner than with the effective date for the last of any resulting designations under ORS 285C.065, 285C.080 or 285C.250 (see OAR 123-650-2000).

(7) “Sponsoring Government” means a county, port or city participating as an Applicant in proposing an enterprise zone (or a district that has effectively the same governing body as the county, port or city, and that contains all the city, port or county territory inside the proposed zone).

(8) “Target Community” means an extensive residential area or group of such areas proximate to a proposed urban enterprise zone boundary, and encompassing a populace that the Applicant intends to explicitly help through employment opportunities and relevant public or private efforts or programs in relation to the proposed zone.

(9) “Terminated-by-Statute” means the automatic termination of an enterprise zone, previously designated under ORS 285C.065, 285C.080, 285C.085 or 285C.250, by operation of law after more than 10 years under ORS 285C.245(2).

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.050 - 285.250
Hist.: OBDD 23-2010, f. & cert. ef. 6-14-10; OBDD 13-2012, f. & cert. ef. 8-15-12

123-650-0500

Local Government Sponsorship or Consent

(1) An enterprise zone shall be sponsored by, and only by, the governing body of every city or county jurisdiction or port district in which it 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/cities that/each of which sponsors the zone;

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

(C) The county granted consent for the zone in its unincorporated territory through a resolution adopted by the governing body of the county and the only unincorporated territory inside the zone lies within the urban growth area between the corporate limits and the urban growth boundary of a city that sponsors the zone. (Inside a regional or metropolitan urban growth boundary, any such urban growth boundary must be subject to annexation by a 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) As otherwise consistent with section (1) of this rule, city/county/port sponsorship or consent is permissible in combinations not specifically described by this rule.

(3) In accordance with OAR 123-656:

(a) A city, port or county shall sponsor neither the designation of a reservation enterprise zone nor an amendment to such a zone that adds only land described under ORS 285C.306(2), but such sponsorship is necessary for a boundary change under ORS 285C.115(3).

(b) This rule does not pertain to a reservation partnership zone under ORS 285C.306(3), except pursuant to a boundary change under ORS 285C.115(3).

(c) Not every city, port or county need sponsor a designation under ORS 285C.085 based on a federal enterprise zone.

Stat. Auth.: ORS 285A.075, 285C.060(1) & 285C.066
Stats. Implemented: ORS 285C.050, 285C.065, 285C.115, 285C.250, 285C.306 & 285C.320
Hist.: OBDD 23-2010, f. & cert. ef. 6-14-10

123-650-0700

Rural and Urban Designations

(1) As defined in ORS 285C.050(8), an “enterprise zone” is a designated area (or a reservation partnership zone under a co-sponsorship agreement), categorized as either “rural” or “urban” under ORS 285C.050(17) or (21).

(2) As used in ORS 285C.050(21), “regional or metropolitan urban growth boundary” means:

(a) The Metro/Portland-area regional urban growth boundary (UGB); or

(b) The UGB encompassing the largest city inside a federally established metropolitan statistical area (MSA) and any other city that jointly undertakes comprehensive planning with that city to determine their mutual UGB(s). Subject to change in federal MSAs or joint arrangements for inter-city planning, this currently includes the UGBs for:

(A) Bend;

(B) Corvallis;

(C) Eugene;

(D) Medford; and

(E) Salem and Keizer.

(3) For the purposes of ORS 285C.050(21), “inside” means that an enterprise zone may be neither designated nor amended to include areas both inside and outside a regional or metropolitan urban growth boundary, except for a (rural) reservation enterprise zone or reservation partnership zone.

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

(5) If a new or newly modified regional or metropolitan urban growth boundary intersects an existing enterprise zone, the zone’s categorization as either urban or rural shall remain unchanged. If a subsequent modification to the regional or metropolitan urban growth boundary (or to the definition thereof) situates the zone entirely outside or inside of that boundary, then the zone’s categorization as rural or urban shall switch accordingly.

Stat. Auth.: ORS 285A.075 & 285C.060(1)
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

Dimensions and Boundaries

123-650-1000

Size and Distances

For purposes of an enterprise zone 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 the borders/territory of this state corresponding to 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 are is inside the zone boundary).

(4) No part of this rule applies to federal enterprise zones, nor does it affect a rural renewable energy development zone under ORS 285C.353, consistent with OAR 123-680.

(5) Consistent with OAR 123-656:

(a) Other than section (2) no part of this rule restricts the designation or amendment of an enterprise zone based on a federal enterprise zone under ORS 285C.085.

(b) Other than sections (2) and (3) no part of this rule affects the designation or existence of a reservation enterprise zone under ORS 285C.306(2), except pursuant to a boundary change under ORS 285C.115(3).

(c) No part of this rule pertains to a reservation partnership zone under ORS 285C.306(3), except pursuant to a boundary change under 285C.115(3).

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.065 & 285C.090
Hist.: OBDD 23-2010, f. & cert. ef. 6-14-10; OBDD 13-2012, f. & cert. ef. 8-15-12

123-650-1100

Extended Rural Distances

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

(1) This rule 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 the current 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 pursuant to an enterprise zone designation or boundary change:

(a) As specifically requested by the Applicant for designation or the current zone sponsor and any proposed cosponsor;

(b) Such that the waiver is part of the Director’s order designating or changing the boundary of the enterprise zone boundary; and

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

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

(a) The impracticality of separate enterprise zones as an alternative, such that relative to outstanding demand for available designations, an area proposed for inclusion in the zone will serve an isolated site or small community that might be infeasible on its own as a zone.

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

(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 serve an area exhibiting particular hardship, or to accommodate the expressed preference of the relevant local jurisdictions.

(6) Nothing in this rule affects the restriction on total enterprise zone area in OAR 123-650-1000(3).

Stat. Auth.: ORS 285A.075, 285C.060(1) & 285C.120(2)
Stats. Implemented: ORS 285C.050, 285C.065, 285C.090, 285C.120 & 285C.350
Hist.: OBDD 23-2010, f. & cert. ef. 6-14-10; OBDD 13-2012, f. & cert. ef. 8-15-12

123-650-1500

Mapping and Defining Zone Boundary

Any proposed enterprise zone designation or boundary change, as described in this division of administrative rules, shall demonstrate adherence with OAR 123-650-1000 or 123-650-1100 by including all of the following with the application or request submitted to the Department:

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

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

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

(b) An overview map shows the entire proposed zone on a single page;

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

(d) A boundary change request specifically identifies added and removed areas.

(3) Narrative legal description of the enterprise zone’s boundary in a continuous fashion that corresponds to the mapping in section (2) of this rule, but which would overrule the mapping in the event of any material discrepancy. Though primarily based on metes and bounds surveying, for the sake of simplification one or more of the following may substitute partially or entirely for metes and bounds, where it exactly corresponds or coincides to the enterprise zone boundary:

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

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

(c) Census Statistical Units larger than a census block (with official, dated documentation);

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

(e) Listing of tax lots as dated and documented in specific reference to county assessor maps, preferably based on highlighted copies of such maps included with the submission.

(4) The following items, although the Department may accept and approve a designation or boundary change pending their receipt from the zone sponsor:

(a) Geo-coded data (shape file) for geographic information systems (GIS); and

(b) Electronic image file corresponding to subsection (2)(b) of this rule.

Stat. Auth.: ORS 285A.075, 285C.060(1), 285C.065(3) & 285C.250(4)
Stats. Implemented: ORS 285C.060, 285C.065, 285C.075, 285C.085, 285C.090, 285C.115, 285C.120 & 285C.250
Hist.: OBDD 23-2010, f. & cert. ef. 6-14-10

Local Applications and Designation

123-650-2000

Application Receipt and Review

(1) The Department shall issue public notice specifying the deadline for applications, which shall indicate any maximum number of enterprise zones available in the Round of Designation. The Department shall determine how to announce the round or publish the notice, including but not limited to posting application information at the Department’s internet web site, not less than 60 days in advance of the specified deadline.

(2) An Applicant may submit a valid application under ORS 285C.065 only pursuant to an announced Round of Designation, in that on or before the date of the application deadline:

(a) The Applicant sent it by that date, as indicated by a postmark or the receipt of a commercial deliverer; or

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

(3) The Department shall complete a review of all received applications for enterprise zone designation within 60 days after the specified deadline, to determine which Applicants meet the requirements and mandatory qualifications under ORS 285C.090 and other applicable provisions of ORS 285C.050 to 285C.250.

(4) When the number of qualified Applicants exceeds the maximum number of zones, or if requested by the Director, the Department shall further evaluate the applications, using the competitive criteria described in OAR 123-650-3000 through 123-650-3400.

(5) The Department shall prepare a staff report to the Director based on the review in section (3) of this rule that:

(a) Identifies and delineates basic features of each qualified Applicant, summarizing applicable evaluations and rankings arising from section (4) of this rule;

(b) Discusses other significant analyses and considerations about the proposed enterprise zones, as available; and

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

Stat. Auth.: ORS 285A.075, 285C.060(1), 285C.065(3) & 285C.250(4)
Stats. Implemented: ORS 285C.065, 285C.075, 285C.090 & 285C.250
Hist.: OBDD 23-2010, f. & cert. ef. 6-14-10

123-650-2100

Mandatory Economic Need and Land

For purposes of designation, a proposed enterprise zone must demonstrate that the local economy is lagging, and that it contains land ready for development:

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

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

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

(c) The proposed enterprise 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 proposed enterprise zone would meet this qualification.)

(2) A proposed enterprise zone may nevertheless qualify for designation under ORS 285C.090(1)(c), if the Director finds based on evidence documented by the Applicant that the proposed 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 proposed zone that are associated with heavy job losses by specified employers during the three years preceding the application deadline.

(3) The proposed enterprise zone boundary must encompass significant land that is vacant, improvable and suitable for use and rapid development by eligible business firms.

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

(5) The application form and instructions prepared by the Department for the Round of Designation are hereby incorporated into and made part of these administrative rules by reference, for purposes of an Applicant’s satisfying this rule with respect to how an Applicant shall:

(a) Assemble, aggregate and compare economic statistics;

(b) Properly relate those statistics to the proposed zone area and to this state or an equivalent basis;

(c) Document the adequacy and quantity of project-ready land;

(d) Undertake or integrate relevant strategic planning efforts; and

(e) Address other matters.

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

Stat. Auth.: ORS 285A.075, 285C.060(1), 285C.065(3) & 285C.250(4)
Stats. Implemented: ORS 285B.283, 285C.075, 285C.090 & 285C.250
Hist.: OBDD 23-2010, f. & cert. ef. 6-14-10; OBDD 13-2012, f. & cert. ef. 8-15-12

123-650-2200

Acceptance and Effect of Application

With a given Round of Designation:

(1) The application for designation of an enterprise zone as submitted by an Applicant:

(a) Shall include all items and information specified in OAR 123-650-2300, for which failure to perform an associated task may result in termination of the zone after designation under ORS 285C.245(5).

(b) May come from any city, port or county or combination of cities, ports or counties in accordance with OAR 123-650-0500, except as described in section (2) of this rule.

(c) Shall specify a name for the proposed zone corresponding to place names or common geographic or jurisdictional terms. (A Preexisting Enterprise Zone with the same name shall, as necessary, use suffix “II,” “III,” etc. for purposes of reapplication)

(d) May contain binding proposals by each Sponsoring Government (as indicated in its resolution) to provide local incentives under ORS 285C.065(4) to (6) (consistent with OAR 123-668-1300) to authorized or qualified business firms locating or expanding in parts of the proposed zone exclusive to that government’s political or service territory.

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

(2) The Department shall reject an application if:

(a) The proposed zone includes area in any existing enterprise zone (including but not limited to a reservation partnership zone) unless the other zone will be Terminated-by-Statute at the round’s conclusion.

(b) Any Sponsoring Government is:

(A) A city, port or county that sponsored an enterprise zone terminated by order of the Director under ORS 285C.245(4) or (5), within 10 years by the time of expected designation, other than a county or port if a port/city also sponsored the terminated zone and none of the proposed enterprise zone area for designation was inside the terminated zone.

(B) A city (or a port without one or more different city cosponsors) that is also sponsoring a previously received application in the same round.

(C) A city with a population of less than 100,000 that sponsors an existing enterprise zone, unless it is a reservation partnership zone or will be Terminated-by-Statute at the round’s conclusion, or as specially allowed by the Director respective to other near-term terminations and anticipated re-applications.

(3) Only with application for an enterprise zone may a city or county establish under ORS 285C.070 that a business operating a hotel, motel or destination resort is eligible under ORS 285C.135(5)(c) in the enterprise zone or in part of the zone exclusive to the city’s or county’s entire jurisdiction. Moreover:

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

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

(c) For a Preexisting Enterprise Zone with an existing election, hotel/resort eligibility does not automatically carry over (such that future hotel/resorts are ineligible throughout the new zone without a positive election as described in this section).

Stat. Auth.: ORS 285A.075, 285C.060(1), 285C.065(3), 285C.066 & 285C.250(4)
Stats. Implemented: ORS 285C.065, 285C.070, 285C.075 & 285C.250
Hist.: OBDD 23-2010, f. & cert. ef. 6-14-10; OBDD 13-2012, f. & cert. ef. 8-15-12

123-650-2300

Required Elements of Application

An application proposing designation of an enterprise zone must contain:

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

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

(a) Consistent with OAR 123-650-2400 from each Sponsoring Government; and

(b) Of consent from any other applicable city, port or county.

(3) A description of the boundary and surface area of the proposed zone (see OAR 123-650-1500).

(4) Information sufficient to verify satisfaction of mandatory qualifications in OAR 123-650-2100 by including:

(a) Data for social and economic conditions, which also serve the competitive criteria in OAR 123-650-3100; and

(b) Evidence about the readiness of land for development, including but not limited to an enterprise zone map that shows land use zoning and key sites.

(5) Documentation of notice and consultation with local taxing districts (see OAR 123-650-5000 to 123-650-5200).

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

Stat. Auth.: ORS 285A.075, 285C.060(1), 285C.065(3), 285C.066, 285C.067(2) & 285C.250(4)
Stats. Implemented: ORS 285C.065, 285C.075, 285C.090 & 285C.250
Hist.: OBDD 23-2010, f. & cert. ef. 6-14-10

123-650-2400

Local Resolutions for Designation

In addition to requesting designation, the resolutions of Sponsoring Governments for purposes of OAR 123-650-2300(2) shall:

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

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

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

(4) Declare that the Applicant will fulfill its duties under ORS 285C.050 to 285C.250 and comply with ORS 285C.105 (see OAR 123-668), including but not limited to:

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

(b) Fully implementing within six months of designation:

(A) Any proposal in the application for local incentives under ORS 285C.065(4) to (6) (per OAR 123-668-1300); and

(B) Duties of the sponsor described in OAR 123-668-1100 and 123-668-1400.

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

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

(7) Address applicable elections or restrictions for hotel/resort eligibility, as described in OAR 123-650-2200(3), or for similar matters.

Stat. Auth.: ORS 285A.075, 285C.060(1), 285C.065(3), 285C.067(2) & 285C.250(4)
Stats. Implemented: ORS 285C.065, 285C.067, 285C.070, 285C.095, 285C.105 & 285C.110
Hist.: OBDD 23-2010, f. & cert. ef. 6-14-10

123-650-2500

Director’s Determination

For purposes of designating enterprise zones:

(1) The Director’s consideration shall include but is not limited to the staff report in OAR 123-650-2000.

(2) For a given Round of Designation:

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

(b) The Director may determine not to designate a zone available under another provision, despite qualified Applicants; and

(c) Any zone remaining undesignated shall be available in a future Round of Designation as determined by the Director.

(3) No enterprise zone shall be designated if any such designation would cause the total number of enterprise zones in existence to exceed the maximum allowed by law.

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

(a) May not be appealed; and

(b) Depends ultimately (subject to sections (2) and (3) of this rule) on the Director’s determination of which Applicant/proposed enterprise zone represents if designated the best chance to fulfill the public purposes of the Oregon Enterprise Zone Act.

(5) The Department shall contact all unsuccessful Applicants within 30 days of the Director’s determination, notifying them in writing under ORS 285C.075(4).

Stat. Auth.: ORS 285A.075, 285C.060(1), 285C.067(2) & 285C.250(4)
Stats. Implemented: ORS 285C.045, 285C.055, 285C.060, 285C.067, 285C.075, 285C.080 & 285C.250
Hist.: OBDD 23-2010, f. & cert. ef. 6-14-10

123-650-2600

Orders of Designation

Pursuant to OAR 123-650-2500:

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

(2) The order of designation shall acknowledge:

(a) The particular statutory basis for the designation;

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

(c) The effective designation date and the latest expected termination date for the new enterprise zone;

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

(e) Any distance waiver under ORS 285C.120(2), as described in 123-650-1100; and

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

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

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

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

(A) The effective date may not be earlier than receipt of the formal application for designation from the Applicant;

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

(C) The application for designation must clearly indicate the investment as a consideration for designation of the proposed enterprise zone;

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

(E) The firm still needs to have applied for authorization under ORS 285C.140 before beginning physical work on the investment.

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.055, 285C.060, 285C.070, 285C.075 & 285C.250
Hist.: OBDD 23-2010, f. & cert. ef. 6-14-10

Competitive Criteria for Designation

123-650-3000

Scoring System

(1) OAR 123-650-3100, 123-650-3200, 123-650-3300 and 123-650-3400 each entail a category of criteria for evaluating and awarding points on the need, likelihood of success and other qualities of a proposed enterprise zone:

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

(b) OAR 123-650-3100 carries 750-point maximum and 123-650-3200 carries 500-point maximum.

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

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

(e) If two or more Applicants have the same number of total points for all categories, then the Director shall determine how to break such a tie, as necessary, for that Round of Designation.

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

(2) In order to be accepted by the Department, all responses to such competitive criteria must be submitted with the deadline specified in OAR 123-650-2000, except for those in 123-650-3200, 123-650-3300 and 123-650-3400 if:

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

(b) In the public notice in OAR 123-650-2000, the Department allows submission of such responses within 30 calendar days after the deadline. In this case, the Department shall advise all Applicants about the importance of such responses, as soon as possible after the deadline.

Stat. Auth.: ORS 285A.075, 285C.060(1), 285C.065(3) & 285C.250(4)
Stats. Implemented: ORS 285C.065, 285C.075, 285C.090 & 285C.250
Hist.: OBDD 23-2010, f. & cert. ef. 6-14-10

123-650-3100

Economic Hardship and Betterment

The following criteria measure the economic hardship of the proposed enterprise zone and may serve to satisfy OAR 123-650-2100(1) or (2), but the Applicant at its discretion may make additional responses only by the time of the deadline in 123-650-2000:

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

(2) One point, for every basis point by which the zone’s unemployment rate exceeds the statewide rate.

(3) Four points, for every 10 basis point by which the zone’s percentage of persons or households below the poverty level exceeds the equivalent statewide percentage.

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

(5) Sixty points, for each Distressed Area that either is a Sponsoring Government or entirely contained within the proposed zone.

(6) Extra points at the discretion of the Department for:

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

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

Stat. Auth.: ORS 285A.075, 285C.060(1), 285C.065(3) & 285C.250(4)
Stats. Implemented: ORS 285A.020, 285C.055, 285C.075, 285C.090 & 285C.250
Hist.: OBDD 23-2010, f. & cert. ef. 6-14-10

123-650-3200

Successful and Sound Development

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

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

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

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

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

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

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

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

(4) Proposed package of local incentives, inasmuch as they would be binding as described in OAR 123-668-1300, such that:

(a) The package may include local incentives adopted within one year prior to the application deadline; and

(b) Applicants shall account for the feasibility or prudency in terms of fiscal or other impacts on relevant governmental entities due to proposed reductions in direct service fees.

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

(6) A strategic plan or similar efforts applicable to the proposed enterprise zone, in terms of local analyses, objectives, actions and anticipated results.

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

Stat. Auth.: ORS 285A.075, 285C.060(1), 285C.065(3) & 285C.250(4)
Stats. Implemented: ORS 285B.283, 285C.055, 285C.060, 285C.065, 285C.075 & 285C.250
Hist.: OBDD 23-2010, f. & cert. ef. 6-14-10

123-650-3300

Immediate Investment Prospects

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

(1) Such immediate prospects must be on investments reasonably expected to qualify within the proposed enterprise zone no later than January 1 following the second full calendar year after the zone’s designation.

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

(a) An authorization application;

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

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

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

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

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

(D) The estimated cost of the investment in qualified property.

(3) Each new employee that such a prospect will hire shall generate one point.

(4) Each $1,000,000 in qualified property that such a prospect will invest shall generate three points.

(5) The Department must receive any such relevant evidence for section (2) of this rule not more than 30 calendar days after the application deadline in OAR 123-650-2000.

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

(7) The Department shall award only 1/3 of the usual points as described in section (3) and (4) of this rule for an immediate investment prospect that plans to locate on a site within five miles of a current enterprise zone including one to be Terminated-by-Statute, unless the Applicant or the eligible business firm sufficiently justify why:

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

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

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

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

Stat. Auth.: ORS 285A.075, 285C.060(1), 285C.065(3) & 285C.250(4)
Stats. Implemented: ORS 285C.055, 285C.060, 285C.065 & 285C.250
Hist.: OBDD 23-2010, f. & cert. ef. 6-14-10

123-650-3400

Miscellaneous

The following criteria relate to how well the proposed enterprise zone will operate and achieve the economic development goals of the state as a whole. Applicant’s responses are discretionary and may consolidate two or more criteria:

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

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

(3) Evidence of public awareness about the proposed zone within the local community, including but not limited to:

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

(b) Resolutions or letters of support for the zone from local organizations, institutions or property tax districts received by the Department within 30 calendar days of the application deadline in OAR 123-650-2000(1).

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

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

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

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

Stat. Auth.: ORS 285A.075, 285C.060(1), 285C.065(3), 285C.067(2) & 285C.250(4)
Stats. Implemented: ORS 285C.055, 285C.067, 285C.075, 285C.105 & 285C.250
Hist.: OBDD 23-2010, f. & cert. ef. 6-14-10

Local Taxing Districts

123-650-5000

Notice with Regular Zone Application

An application to designate an enterprise zone under ORS 285C.080 or 285C.250 entails notice to and consultation with local taxing districts before making submissions to the Department:

(1) 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 proposed area of zone designation. The county assessor shall 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 with effectively the same governing body as a Sponsoring Government.

(2) The Applicant must send the notice at least 21 calendar days before the meeting described in OAR 123-650-5100, and the notice must include, but is not limited to:

(a) An invitation for representation from each district;

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

(c) Brief background about the reasons for seeking an enterprise zone.

(3) The notice must always:

(a) Indicate the probable schedule for consideration of city/port/county resolutions to apply for designation even if lacking exact dates;

(b) Explain the potential for (limited-duration) exemption(s) from taxes on future business property inside the zone boundary (subject to certain requirements);

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

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

(4) The Applicant must furnish the Department with the following as part of the application:

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

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

(c) Any final document, materials or meeting minutes associated with consultative activities; and

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

(5) For all written comments received in response to the notice from any relevant taxing district, the Applicant or zone sponsor shall send copies to the Department with application submissions or no later than 15 calendar days following the Applicant’s receipt.

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

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

(8) 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.

(9) Copies of items listed in subsections (4)(a) and (b) of this rule shall also be furnished to the Special Districts Association of Oregon (Attn: Government Affairs) by the Applicant.

Stat. Auth.: ORS 285A.075, 285C.060(1), 285C.065(3), 285C.067(2) & 285C.250(4)
Stats. Implemented: ORS 285C.060, 285C.067, 285C.065, 285C.075 & 285C.250
Hist.: OBDD 23-2010, f. & cert. ef. 6-14-10

123-650-5100

Public Meeting for Regular Applications

For purposes of ORS 285C.067, the Applicant for enterprise zone designation 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 a resolution of application by the governing body of any Sponsoring Government.

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

(3) At which the Applicant:

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

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

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

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

(4) That involves discussion of relevant issues and addresses follow-up steps for analysis or further consultation, as well as plans for adopting resolutions and submitting the enterprise zone application.

Stat. Auth.: ORS 285A.075, 285C.060(1), 285C.065(3), 285C.067(2) & 285C.250(4)
Stats. Implemented: ORS 285C.060, 285C.065, 285C.067, 285C.075 & 285C.250
Hist.: OBDD 23-2010, f. & cert. ef. 6-14-10

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, the Applicant 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 comments or answers to specific questions.

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

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

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

(a) May establish arrangements or agreements with one or more districts, contingent on zone designation.

(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 further development or finalization.

(c) May formally execute and document any such arrangement or agreement, but any description of verbal pledges or understandings does not itself 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.065(3), 285C.067(2), 285C.250(4), 285C.353(2) & 285C.370
Stats. Implemented: ORS 285C.060, 285C.065, 285C.067, 285C.075, 285C.085, 285C.115, 285C.120, 285C.250 & 285C.353
Hist.: OBDD 23-2010, f. & cert. ef. 6-14-10

123-650-5500

Notice for Boundary Change, Federal Enterprise Zone or RRED Zone

An application or request to designate a rural renewable energy development zone (see OAR 123-680), to designate an enterprise zone under ORS 285C.085 (federal enterprise zone), or to change an existing enterprise zone boundary entails notice to local taxing districts before submission to the Department that generally conforms to that described in OAR 123-650-5000, except:

(1) In the case of a boundary change, the notice goes not only to each taxing district in any proposed area to be added, but also to those inside the entire, current zone area (aside from any jurisdiction seeking to join the zone).

(2) The sponsor/would-be sponsor shall send the notice 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 could demand further communications as described in OAR 123-650-5200, including but not limited to the proposed addition of a new cosponsor or of extensive area to an existing enterprise zone.

(4) Application/request to the Department is not complete without inclusion of relevant items listed in OAR 123-650-5000(4) or (5).

Stat. Auth.: ORS 285A.075, 285C.060(1), 285C.353(2) & 285C.370
Stats. Implemented: ORS 285C.085, 285C.115, 285C.120, 285C.250 & 285C.353
Hist.: OBDD 23-2010, f. & cert. ef. 6-14-10

Changes to Enterprise Zone Boundaries

123-650-7000

Request by Zone Sponsor

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

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

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

(3) Definition of the zone boundary in accordance with OAR 123-650-1500.

(4) Consideration of economic hardship conditions in or near any area proposed for addition to the zone, relative to economic hardship of the original enterprise zone as described in OAR 123-650-7300.

(5) Adherence to OAR 123-650-7100 and 123-650-7200, including but not limited to commentary about the usability of land, urban growth boundaries and public involvement.

(6) Conformity with:

(a) Mandatory city/county/port sponsorship or consent in OAR 123-650-0500, such that despite previous consent by resolution of a city, port or county governing body, any subsequent boundary change still needs further consent to include additional area inside territory of the city, port or county, unless the previous resolution expressively granted open-ended consent for any such future amendment;

(b) Spatial parameters for an enterprise zone in OAR 123-650-1000 or 123-650-1100; and

(c) Requirements of ORS 285C.115(2)(b) and (d) for retaining sites of all current, actively authorized business firms and at least half of the land in the original enterprise zone.

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

(a) Binding proposals to provide local incentives under ORS 285C.115(7)(a) (consistent with OAR 123-668-1300) to authorized or qualified business firms locating or expanding in parts of the proposed zone exclusive to that jurisdiction or port district; or

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

(8) Request for a needed waiver of maximum rural distances per OAR 123-650-1100.

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

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

(a) The ability to immediately site and authorize a prospective investment by an eligible business firm that will result in economic diversification or the creation or retention of significant employment opportunities for full-time work, quality jobs or special training;

(b) The opportunity to exploit recent changes in local land use designations and ordinances consistent with the purpose of the Oregon Enterprise Zone Act; or

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

Stat. Auth.: ORS 285A.075, 285C.060(1), 285C.066 & 285C.115(6)
Stats. Implemented: ORS 285C.060 & 285C.115
Hist.: OBDD 23-2010, f. & cert. ef. 6-14-10

123-650-7100

Limitations on Boundary Changes

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

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

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

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

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

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

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

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

(3) In order to modify the boundary of a rural enterprise zone, so that it contains new area outside of any urban growth boundary, the request for the boundary change must indicate and explain as described in OAR 123-650-7000(10) to the satisfaction of the Department that there is significant justification for the change.

(4) The Director shall not approve a boundary change if:

(a) It adds any area that is:

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

(B) Inside such a boundary, to a rural zone (other than a reservation enterprise zone or reservation partnership zone);

(b) It adds area inside any other current enterprise zone; or

(c) A new cosponsor to be added under ORS 285C.115(7) is:

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

(B) A city with a population of less than 100,000 that currently sponsors another enterprise zone, except for a reservation partnership zone.

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

(a) To make hotel/resort businesses eligible unless such firms are eligible in the zone already; or

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

Stat. Auth.: ORS 285A.075, 285C.060(1), 285C.066 & 285C.115(6)
Stats. Implemented: ORS 285C.065 & 285C.115
Hist.: OBDD 23-2010, f. & cert. ef. 6-14-10

123-650-7200

Public Involvement

The zone sponsor shall solicit public involvement that:

(1) Occurs prior to the approval of resolutions as described in OAR 123-650-7000 or prior to the submission of a revised request for the boundary change under ORS 285C.115(8);

(2) Is commensurate with the scale and potential impact of the requested boundary change on members of the public, recognizing, for example, that a minor addition of land within an urban growth boundary will generally necessitate little or no public involvement;

(3) Potentially includes but is not necessarily dependent on: Public notice, period of public comment, dissemination of information, or public meeting/hearing, notwithstanding whether they are a requisite part of a jurisdiction’s process for adoption of a resolution; and

(4) Conforms with and includes documentation stipulated in OAR 123-650-5500 for timely communication with local taxing districts, including but not limited to districts with territory that is already in the enterprise zone.

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

123-650-7300

Economic Conditions

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 in a measurable way:

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

(a) From the time of the application for designation of the zone; or

(b) As are most recently available.

(2) For purposes of the boundary change request and OAR 123-650-7000(4), general commentary shall suffice for this issue if it is readily apparent that any area for addition to the zone:

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

(b) Has/borders only residential areas with similar or worse economic hardship conditions.

(3) If the case is less plain than indicated in section (2) of this rule, then the request shall contain a suitable comparison of the original enterprise zone’s economics as described in OAR 123-674-2100 to Census Statistical Units that contain, overlap or are appropriately adjacent to areas to be added to the zone.

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

(a) Less than 20 percent of their land zoned for residential use; 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.115
Hist.: OBDD 23-2010, f. & cert. ef. 6-14-10; OBDD 13-2012, f. & cert. ef. 8-15-12

123-650-7400

Special Cases for Boundary Changes

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

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

(a) The tax exemptions of authorized or qualified business firms in the annexed area shall continue unaffected, enjoying the same protection under relevant provisions in statute, 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 contingent on an amendment to the zone’s sponsorship as provided in subsection (c) of this section; and

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

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

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

(3) A non-sponsoring city, port or county need neither consent nor cosponsor in order for a boundary change to add area outside its territory, even if the enterprise zone already contains territory of the city, port or county due to prior consent.

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

(5) If a boundary change removes the site of a business firm’s operations or property, the firm shall enjoy the same protection under relevant provisions in statute, law and this chapter of administrative rules for location in a terminated enterprise zone.

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

Termination of Enterprise Zones

123-650-9100

Events and Timing

(1) Determinations by the Director on the designation, termination or rejection of an application for designation of an enterprise zone are final.

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

(3) Any zone that is designated under ORS 285C.250(1) to replace an enterprise zone that was concurrently Terminated-by-Statute shall not itself terminate under ORS 285C.245(2) until, in effect 11 years after its designation.

(4) 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.

(5) Termination under ORS 285C.255(1)(c) — that is, statutory sunset of enterprise zone program — occurs at 12:01 AM 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

123-650-9300

Early Termination of Unused Zone

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

(1) The Director shall order termination effective on December 31 six years after the December 31, on or immediately after which the effective date of the zone’s designation occurs.

(2) This rule does not apply if the Department determines that a business firm has qualified in that zone for an exemption under ORS 285C.175.

(3) Termination per this rule shall be provisional and subject to rescission and reversal, if the Department finds that during the sixth full calendar year of the zone’s existence, an actively authorized business firm placed qualified property in service and successfully claims the exemption.

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

(5) This rule has no bearing on:

(a) A reservation enterprise zone or reservation partnership zone; or

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

Stat. Auth.: ORS 285A.075 & 285C.060(1)
Stats. Implemented: ORS 285C.245 & 285C.250
Hist.: OBDD 23-2010, f. & cert. ef. 6-14-10

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