The Oregon Administrative Rules contain OARs filed through October 15, 2015






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


Purpose and Scope

This division of administrative rules specifies matters related to the creation and operation of an RREDZ, which as used in these administrative rules, means a rural renewable energy development zone under ORS 285C.350 to 285C.370:

(1) For an eligible business firm in an RREDZ, the standard (3–5-year) enterprise zone exemption and associated provisions under ORS 285C.050 to 285C.250 apply as they would inside an enterprise zone, as addressed in OAR 123-674, for which:

(a) The firm and the firm’s property qualify, however, only insofar as they relate to “renewable energy” facilities and activities under ORS 285C.350, such that for purposes of the first clause under ORS 285C.350(2), in order to be exempt, qualified property must generate electricity to a significant degree from the combustion, harnessing or utilization of the renewable energy resource, but it may also produce (even for the most part) other energy forms, including but not limited to steam, heat or mechanical power; and

(b) The sponsor of the RREDZ is equivalently responsible for the same applicable duties as a local enterprise zone sponsor, including but not limited to those covered in OAR 123-668.

(2) The primary purpose of RREDZs is the extension of this enterprise zone incentive to renewable energy projects, especially those that are far-flung or widely dispersed, in lieu of potentially infeasible or physically complex amendment to the boundary of an existing enterprise zone.

(3) These administrative rules:

(a) Have no bearing on true enterprise zones, including but not limited to an enterprise zone, or to an eligible business firm or qualified property in an enterprise zone, encompassed by an RREDZ;

(b) Do not control or bind the county assessor or Department of Revenue, and they do not supersede OAR chapter 150, in matters related to tax administration; and

(c) Utilize definitions found in OAR 123-001 (Procedural Rules) and 123-674, except where the context dictates otherwise.

Stat. Auth.: ORS 285A.075 & 285C.370
Stats. Implemented: ORS 285C.350 - 285C.370
Hist.: OBDD 28-2010, f. & cert. ef. 6-14-10; OBDD 12-2015, f. & cert. ef. 10-5-15


Basic Points about RREDZs

(1) Like an enterprise zone, an RREDZ terminates by operation of law as otherwise provided under ORS 285C.245(1) and (2), with equivalent protection and allowances for relevant business firms in the RREDZ, but it does not terminate by programmatic sunset under ORS 285C.255.

(2) An RREDZ (irrespective of OAR 123-650-1000) covers the entire territory of the designated:

(a) City including subsequent annexations; or

(b) County or counties whether outside corporate limits or not, but excluding any area inside an urban growth boundary (UGB) described in section (3) of this rule.

(3) An RREDZ is permitted anywhere in this state, except within the UGB of a city with a population of 30,000 or more, including but not limited to the entire (Portland-area) Metro UGB.

(4) RREDZs come in one of only the following three types:

(a) City RREDZ, in that the governing body of a single city applies to the Department for designation, and the city is the sponsor of the RREDZ;

(b) County RREDZ, in that the governing body of a single county applies to the Department for designation, and the county is the sponsor of the RREDZ; or

(c) Multi-county RREDZ, in that each governing body of two or more counties jointly apply to the Department for designation, for which:

(A) The counties are contiguous one to another, but do not necessarily all share a single common border in the case of three or more counties; and

(B) Only one of the counties serves as the zone sponsor.

(5) In appointing the local RREDZ manager, the sponsor is encouraged to select someone, who also serves as the local zone manager for an enterprise zone whenever possible.

(6) There is no particular limit on the number of RREDZs statewide, although a city or county may not have two or more concurrent designations, with the following distinctions:

(a) A city may have a designation, even if inside a county designated as an RREDZ; or

(b) A county may itself be designated an RREDZ and be part of an RREDZ with one or more other counties, but it may not concurrently belong to two or more different, multi-county RREDZs.

(7) The RREDZ exemption under ORS 285C.362 on the qualified property of a qualified business firm may not be derived from more than one overlapping RREDZ designation, except if there are two or more authorizations covering property in different tax lots.

Stat. Auth.: ORS 285A.075 & 285C.370
Stats. Implemented: ORS 285C.350 - 285C.370
Hist.: OBDD 28-2010, f. & cert. ef. 6-14-10; OBDD 12-2015, f. & cert. ef. 10-5-15


Designation of a RRED Zone

(1) To apply for designation of an RREDZ under ORS 285C.353, the city, county or multiple counties shall furnish the Department with:

(a) A copy of the resolution(s) requesting designation duly adopted by each jurisdiction within the past six months, which among other things, would specify the designation’s exemption limitation amount under ORS 285C.353(4) as described OAR 123-680-1400;

(b) Evidence of timely notice and communication with local taxing districts consistent with OAR 123-650-5500; and

(c) A formal statement that specifies the following:

(A) The county that will serve as the sponsor in the case of a multi-county RREDZ; and

(B) The status of any previous or otherwise ongoing RREDZ designation in the jurisdiction(s), including but not limited to the unused portion of an exemption limitation for purposes of section (4) of this rule.

(2) Subject to the accuracy and completeness of the furnished materials and any other information as the Department may request, as well as applicable laws and these administrative rules:

(a) The Director will approve designation of the requested RREDZ; and

(b) The Department shall issue documentation of the designation, including but not limited to establishing its:

(A) Effective date, which may be as early as when the zone sponsor adopted its resolution in the case of a new RREDZ if so requested by the applicant; and

(B) Exemption limitation amount.

(3) Premature termination of the RREDZ under ORS 285C.245(3) to (5) shall occur only if the Director issues an order to that effect, such that with a multi-county RREDZ, all of the counties must adopt a resolution requesting termination under ORS 285C.245(4) not only the sponsor. The Director shall not approve any RREDZ that corresponds to one so terminated for the next 10 years.

(4) If the application is for a subsequent additional designation corresponding to an existing RREDZ under ORS 285C.353(4)(b) and (c), then the existing RREDZ ceases, and the new designation replaces it, effective on January 1 directly following the last date on which a resolution of application was adopted, so that:

(a) Any authorized business firm in the previously existing RREDZ belongs to the newly designated RREDZ for the initial qualification of any property first placed in service in an assessment year immediately preceding that January-1 date (regardless of the application of authorization’s date of submission or approval); and

(b) Any unused portion of the previous RREDZ’s exemption limitation under ORS 285C.353(4) ceases to exist, and only the new RREDZ’s exemption limitation, consistent with OAR 123-680-1400(3)(c), is available for future exemptions.

Stat. Auth.: ORS 285A.075 & 285C.370
Stats. Implemented: ORS 285C.350 - 285C.370
Hist.: OBDD 28-2010, f. & cert. ef. 6-14-10; OBDD 12-2015, f. & cert. ef. 10-5-15


Limitation of Exempt Real Market Value

Under ORS 285C.353(4), each RREDZ designation has a cap on the total value in qualified property allowed, which is cumulatively exhausted with each exempt project over the life of the designation:

(1) Such value is the property’s real market value (RMV) on the assessment date of the first year that the authorized business firm may claim the exemption, not the amount exempted each year.

(2) The zone sponsor shall coordinate with the county assessor to track the amount of this limitation that former/ongoing exemptions have used and the remaining, unused portion. (If the assessor later disqualifies affected property and collects the property taxes back, then the initial RMV of the disqualified property increases the unused portion for future use in the same RREDZ)

(3) The exemption limitation described in this rule equals the amount specified in the resolution(s) adopted by the city, county or counties in applying for the RREDZ, and any such specified amount must be:

(a) Less than or equal to the maximum permitted under ORS 285C.353(4)(d);

(b) Evenly divisible by $5 million; and

(c) Greater than the unused portion of the previous RREDZ’s exemption limitation with a subsequent additional RREDZ as described in OAR 123-680-1200(4).

(4) If any such resolution fails to specify an exemption limitation for the RREDZ, or if two or more such resolutions comprising a joint application disagree as to the amount, then the limitation for that RREDZ defaults to the maximum permitted.

(5)(a) If new qualified property of an authorized business firm first subject to exemption in a single year will exhaust the exemption limitation, then the exemption or exemptions are allowed only up to the point at which the property’s RMV equals the unused portion; and

(b) In the case of two or more such firms subject to simultaneous exemptions, the assessor shall pro-rate the unused portion among them commensurate with the total value of each one’s applicable qualified property.

Stat. Auth.: ORS 285A.075 & 285C.370
Stats. Implemented: ORS 285C.350 - 285C.370
Hist.: OBDD 28-2010, f. & cert. ef. 6-14-10; OBDD 12-2015, f. & cert. ef. 10-5-15


Further Distinctions from an Enterprise Zone Exemption

For an RREDZ exemption, in contrast to a business firms’ using an enterprise zone:

(1) The application for authorization shall give special attention to characterizing the proposed investment in qualified property, clarifying how it relates to renewable energy, and estimating its real market value by January 1 of the first full calendar year of operations.

(2) To be exempt, the qualified property must effectively and substantively correspond to the description in the application.

(3) For purposes of a business firm’s receiving authorization and then qualifying:

(a) An “eligible business firm” under ORS 285C.135 relates only to such operations or business activities that are engaged in renewable energy.

(b) The “employment of the firm” under ORS 285C.200 and 285C.210:

(A) Relates only to employees engaged a majority of their time in eligible renewable energy operations within the RREDZ.

(B) Satisfies requirements for the addition of one or more employees respective to the existing number of employees, who work throughout the entire city, county or counties, as applicable.

(4) The exemption is essentially the same as that under ORS 285C.175, once property has been placed in service. There is, however, no special exemption during construction like under ORS 285C.170, although the exemption under ORS 307.330 may be used as otherwise permissible.

(5) For purposes of an additional one or two years of exemption (following the basic three-year period) on qualified property to be located inside a county that is part of a multi-county RREDZ but not its sponsor:

(a) At least 21 calendar days before execution of the requisite written agreement between the sponsor and the eligible business firm, which may contain additional local requirements that the business firm would need to satisfy, the sponsor shall give the county’s governing body formal notice of the potential extension to the tax abatement period; and

(b) If before the date, on which the firm and sponsor would execute the written agreement, the county’s governing body adopts a resolution electing not to participate, then there shall be no extended abatement for the proposed investment in qualified property in that county.

(6) For purposes of local waivers to statutory employment requirements:

(a) Only the sponsoring county of a multi-county RREDZ needs to adopt the requisite resolution by the time of authorization, regardless of the proposed location of qualified property;

(b) Provisions under ORS 285C.155 and 285C.200(2) otherwise pertain to RREDZs, including as described in OAR 123-674-4300; and

(c) Another type of waiver unique to RREDZs is allowed under ORS 285C.362(2), if the total investment in qualified property pursuant to the application equals or exceeds $5 million, but in this case the sponsor resolution shall not establish:

(A) An alternative minimum employment level, but rather it simply waives the requirements; or

(B) Other conditions to be imposed on the business firm.

Stat. Auth.: ORS 285A.075 & 285C.370
Stats. Implemented: OR 285C.350 - 285C.370
Hist.: OBDD 28-2010, f. & cert. ef. 6-14-10; OBDD 16-2012, f. & cert. ef. 8-15-12; OBDD 12-2015, f. & cert. ef. 10-5-15

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