The Oregon Administrative Rules contain OARs filed through August 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:

(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; 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 an eligible business firm or qualified property in an enterprise zone encompassed by an RREDZ;

(b) Do not necessarily control the fiscal parameters for tax abatements by the county assessor or Department of Revenue;

(c) Are not intended to supersede any applicable administrative rule in OAR chapter 150; and

(d) Utilize definitions found in OAR 123-001 (Procedural Rules), 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


Basic Points about RREDZs

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

(2) An RREDZ covers the entire territory of the designated:

(a) City including subsequent annexations; or

(b) County or counties whether outside corporate limits or not, excluding any area inside the urban growth boundary of a city with a population of 30,000 or more.

(3) An RREDZ is permitted anywhere in this state, except within the urban growth boundary of a city with a population of 30,000 or more.

(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 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


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 the following:

(a) Copy of the resolution(s) requesting designation, as duly adopted by each jurisdiction within the past 90 days;

(b) The documentation of communication with local taxing districts consistent with OAR 123-650-5500; and

(c) A formal statement that specifies the following:

(A) The jurisdiction(s) to be so designated, and in the case of a multi-county RREDZ, the county that would act as the sponsor; and

(B) The status of any previous RREDZ designation in the jurisdiction(s), including but not limited to the unused portion of the exemption limitation under ORS 285C.353(4).

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

(a) The Director shall order the designation;

(b) The Director may make the date of designation effective as early as when the Department received a complete application, if so requested by the applicant; and

(c) The Director’s order shall state the exemption limitation for the RREDZ described in OAR 123-680-1400.

(3) With respect to premature termination of the RREDZ under ORS 285C.245(4):

(a) For a multi-county RREDZ, all counties must adopt a resolution requesting termination, not only the sponsor.

(b) The Director shall not re-designate any RREDZ that corresponds to one so terminated.

(4) If the application is for a subsequent additional designation corresponding to an existing RREDZ, 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 qualification of property first placed in service in an assessment year immediately preceding the January-1 date, on which the new RREDZ takes effect (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 is available for exemptions beginning in subsequent tax years, consistent with OAR 123-680-1400(3)(b).

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


Limitation of Exempt Real Market Value

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

(1) Such value is the property’s real market value (RMV) on the assessment date of the first year that the authorized business firm claims the exemption, not the amount exempted each year (see OAR 123-680-1200(4) in the case of a subsequent additional RREDZ).

(2) The 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 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 under ORS 285C.353(4)(d); and

(b) In the event of a subsequent additional RREDZ, greater than the unused portion of the previous RREDZ’s exemption limitation.

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

(5)(a) If new qualified property 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 qualified firms, the assessor shall pro-rate the unused portion among them commensurate with the total value of each one’s 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


Further Distinctions from an Enterprise Zone Exemption

For an RREDZ exemption relative to OAR 123-674 and the provisions under ORS 285C.050 to 285C.250:

(1) The application for authorization needs to 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 essentially 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 based on the 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 provided during construction like that under ORS 285C.170. although the exemption under ORS 307.330 may be used as otherwise allowed.

(5) For purposes of an additional one or two years of exemption on qualified property (following the standard three-year period) inside a county that is a contiguous part of the RREDZ, but that is not the sponsor of the RREDZ:

(a) At least 21 calendar days before execution of the requisite written agreement between the sponsor and the eligible business firm (prior to authorization), the sponsor shall give the county’s governing body formal notice of the potential extension to the tax abatement period; and

(b) If on or 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 is no extended abatement for the proposed investment in qualified property in that county.

(6) For purposes of the first clause under ORS 285C.350(2), 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.

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

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