71st OREGON LEGISLATIVE ASSEMBLY--2001 Regular Session
NOTE: Matter within { + braces and plus signs + } in an
amended section is new. Matter within { - braces and minus
signs - } is existing law to be omitted. New sections are within
{ + braces and plus signs + } .
LC 622
A-Engrossed
House Bill 2488
Ordered by the House May 31
Including House Amendments dated May 31
Sponsored by Representative HILL; Representative KNOPP (at the
request of Oregon Internet Commission by Craig Berkman, Chair,
Subcommittee on Business Infrastructure)
SUMMARY
The following summary is not prepared by the sponsors of the
measure and is not a part of the body thereof subject to
consideration by the Legislative Assembly. It is an editor's
brief statement of the essential features of the measure.
Allows Economic and Community Development Department to
establish as many as six electronic commerce zones. Applies
preferential tax rate to gain derived from sale of property used
in electronic commerce activities of certified business firm.
Permits business firm to be certified if firm engages in
electronic commerce activities within electronic commerce zone
and meets certain investment and hiring requirements.
Applies preferential tax rate provisions to specified gain when
certification is issued in tax years beginning on or after
January 1, 2002.
{ + Authorizes city or county or combination of cities and
counties to apply for designation of energy generation enterprise
zone. Exempts energy generation enterprise zones from statutory
limits on number of enterprise zones statewide and from statutory
requirements regarding unemployment rates and median income
levels in enterprise zones. Prohibits local and state government
from imposing certain taxes or fees. Enacts related provisions.
Requires business firm and public entity that applied for
designation of energy generation enterprise zone to enter into
agreement regarding extent to which business will meet certain
standards, including public contracting standards and wage rates
and extent to which firm will hire local residents. Requires
agreement to be included in application for precertification or
property tax exemption. + }
A BILL FOR AN ACT
Relating to taxation; creating new provisions; and amending ORS
285B.650, 285B.707 and 285B.713 and section 3c, chapter 1104,
Oregon Laws 1999.
Be It Enacted by the People of the State of Oregon:
SECTION 1. { + Sections 2 to 13 of this 2001 Act are added to
and made a part of ORS chapter 285B. + }
SECTION 2. { + As used in sections 2 to 13 of this 2001 Act:
(1) 'Business firm' has the meaning given that term in ORS
285B.650.
(2) 'Electronic commerce' means engaging in commercial or
retail transactions predominantly over the Internet or a computer
network, and may be further defined by the Economic and Community
Development Department by rule.
(3) 'Electronic commerce zone' means a geographic area that has
been designated an electronic commerce zone by the Director of
the Economic and Community Development Department.
(4) 'Section 1231 gain' has the meaning given that term in
section 1231 of the federal Internal Revenue Code, as
amended. + }
SECTION 3. { + The Legislative Assembly finds and declares
that the economic well-being of the people of this state is
greatly furthered by the continued encouragement, development,
growth and expansion of business primarily engaged in electronic
commerce. The Legislative Assembly further declares that there
are areas in the state that need the particular attention of
government to help attract private investment in electronic
commerce businesses and to help resident businesses to reinvest
and develop electronic commerce capabilities. Therefore, it is
declared to be the purpose of sections 2 to 13 of this 2001 Act
to stimulate and protect economic success by providing income and
corporate excise tax incentives for investments furthering
electronic commerce in these areas of the state. + }
SECTION 4. { + (1) A city or a county may apply to the
Director of the Economic and Community Development Department for
designation of an area within the city or county as an electronic
commerce zone.
(2) With the prior consent of the governing body of the city, a
county may apply to the director on behalf of a city for
designation of any area within that city as an electronic
commerce zone.
(3) A city and a county, or any combination of cities and
counties, may apply to the director for designation of an area
situated partly within the city and partly in unincorporated
territory within the county as an electronic commerce zone.
(4) Any area proposed for designation as an electronic commerce
zone must consist of a total area of not more than 12 square
miles with 12 miles or less as the greatest distance between any
two points within the zone. The area of the zone shall be
calculated by excluding that portion of the zone that lies below
the ordinary high water mark of a navigable body of water, and
any road, railroad, electric transmission line or pipeline rights
of way that connect otherwise unconnected areas of an electronic
commerce zone. These areas shall not be more than five miles
apart.
(5) An application for designation of an electronic commerce
zone shall be in such form and contain such information as the
department may require by rule. The application shall:
(a) Be submitted on behalf of one or more local government
units as described in subsections (1) to (3) of this section by
action of the governing body of each applicant;
(b) Contain a description of the area sought to be designated
as an electronic commerce zone; and
(c) Contain information sufficient to allow the department to
determine if the criteria established in section 7 of this 2001
Act are met. + }
SECTION 5. { + (1) The Economic and Community Development
Department may apply to have an area designated as an electronic
commerce zone. The application shall be made to the Director of
the Economic and Community Development Department by filing an
application with the director that contains the information
described in section 4 (5)(b) and (c) of this 2001 Act and any
other information the department considers necessary for action
to be taken on the application.
(2) At the time that an application is filed under this
section, the department shall give notice of the application to
the governing body of each city or county in the proposed
electronic commerce zone.
(3) In order to permit affected cities and counties to comment
on the efficacy of the proposed electronic commerce zone, the
director may not act on an application filed by the department
for 30 days after the date of filing. + }
SECTION 6. { + (1) The Director of the Economic and Community
Development Department shall review each application filed under
section 4 or 5 of this 2001 Act and shall approve or disapprove
each application within 60 days of the date the application was
filed.
(2) The director may approve an application and thereby
designate the area that is the subject of the application as an
electronic commerce zone if the director determines that the area
meets the criteria set forth in section 7 of this 2001 Act and
that the purposes of sections 2 to 13 of this 2001 Act will be
promoted by the designation.
(3) The determination of the director to approve or disapprove
an application is a discretionary determination. The
determination is final and may not be appealed.
(4) The director may approve as many as six electronic commerce
zones in this state. To the extent practicable, the director
shall designate zones that are geographically diverse and
representative of the geographic regions of this state.
(5) If a designated electronic commerce zone is terminated, the
director may approve a new application for designation under this
section. + }
SECTION 7. { + A proposed electronic commerce zone must be
located in a local area in which:
(1) Fifty percent or more of the households have incomes below
80 percent of the median income of this state, as defined by the
most recent federal decennial census;
(2) The unemployment rate is at least 2.0 percentage points
greater than the comparable unemployment rate for this entire
state, as defined by the most recently available data published
or officially provided and verified by the United States
Government, the Employment Department, the Portland State
University Center for Population Research and Census or special
studies conducted under a contract with a regional academic
institution; or
(3) The Economic and Community Development Department
determines on a case-by-case basis, using evidence provided by
the city or county applying for designation of the proposed
electronic commerce zone, that there exists a level of economic
hardship at least as severe as that described in subsection (1)
or (2) of this section. The evidence shall be based on the most
recently available data from official sources and may include,
but is not limited to, a contemporary decline of the population
in the proposed electronic commerce zone, the percentage of
persons in the proposed electronic commerce zone below the
poverty level relative to the percentage of the entire population
of this state below the poverty level or the unemployment rate
for the county or counties in which the proposed electronic
commerce zone is located. + }
SECTION 8. { + (1) An electronic commerce zone shall be
terminated if the Director of the Economic and Community
Development Department determines that the conditions under
section 7 of this 2001 Act upon which zone designation was based
are no longer present in the zone.
(2) At least 60 days prior to the date the zone is terminated,
notice of the proposed termination shall be given:
(a) In writing to cities and counties in which the electronic
commerce zone is located;
(b) In writing to business firms that are precertified under
section 11 of this 2001 Act but not certified under section 10 of
this 2001 Act; and
(c) By publication in a newspaper of general circulation in the
county in which the electronic commerce zone is located.
(3) The notice shall state that the affected electronic
commerce zone is proposed to be terminated and the date, time and
location of each hearing described in subsection (4) of this
section.
(4) The department shall conduct one or more hearings on the
termination of the zone, at which cities, counties, other local
governments, business firms or other interested persons may
testify and present information relating to the proposed
termination.
(5) Following the completion of all hearings, the director
shall determine whether to terminate the zone.
(6) The termination of a zone under this section does not
affect the taxation of section 1231 gain of a certified business
firm under section 15 or 17 of this 2001 Act if the gain is
derived from the sale or exchange of property in which the
business firm had invested prior to the termination of the zone.
(7) The termination of a zone under this section does not alter
the obligation of a business firm that has been certified under
section 10 of this 2001 Act to file annual reports if required to
do so under section 13 of this 2001 Act. + }
SECTION 9. { + (1) At any time following the designation of an
electronic commerce zone and before the termination of the zone,
a business firm seeking taxation of section 1231 gain under
section 15 or 17 of this 2001 Act shall apply to the Economic and
Community Development Department for certification.
(2) The application shall be on a form prescribed by the
department and shall contain any information required by the
department, including all of the following:
(a) A description of the activities engaged in by the applicant
within the electronic commerce zone.
(b) The dates on which the applicant began operations in each
of the activities listed in paragraph (a) of this subsection.
(c) The number of employees hired during each year of
operations and the number of employees currently employed by the
business firm who are employed in the activities described in
paragraph (a) of this subsection and whose place of employment is
within the electronic commerce zone. If the duties of an employee
described in this paragraph are only partly related to the
activities described in paragraph (a) of this subsection, the
application shall indicate the percentage of time in which the
employee is engaged in the electronic commerce activities.
(d) The average annual wage of employees described in paragraph
(c) of this subsection.
(e) A description of the equipment or other property, including
intangible property, in which the business firm made investments
in order to engage in electronic commerce within the electronic
commerce zone. If the property is real property or tangible
personal property, the property described must be located or used
in the electronic commerce zone. If the property is used both for
activities described in paragraph (a) of this subsection and for
other activities, the application shall indicate the percentage
of total use that is related to electronic commerce in the zone.
(f) An itemized schedule of the costs of the investments
described in paragraph (e) of this subsection.
(3) The department shall review each application submitted
under this section and shall certify or deny certification based
on whether the firm meets the criteria set forth in section 10 of
this 2001 Act.
(4) The department may request any documentation or undertake
any investigation necessary to ascertain the veracity of any
statement made on an application.
(5) The department shall certify or deny certification within
180 days following the date the application is filed with the
department.
(6) A denial of certification may be appealed to the department
in the manner of a contested case under ORS 183.310 to
183.550. + }
SECTION 10. { + (1) The Economic and Community Development
Department shall certify a business firm as eligible for taxation
of section 1231 gain under section 15 or 17 of this 2001 Act if
all of the following apply:
(a) The business activities of the firm that are conducted in
an electronic commerce zone and that are the subject of the
application filed under section 9 of this 2001 Act are primarily
related to electronic commerce.
(b) The business firm has made investments of at least $ ___ in
real or personal property, including intangible property, that is
primarily used in electronic commerce or to support electronic
commerce operations.
(c) The business firm has hired as least ___ full-time
equivalent employees for each $___ of annual gross receipts at a
place of employment located in the electronic commerce zone.
(d) The employees described in paragraph (c) of this subsection
are employed primarily in electronic commerce activities of the
business firm.
(e) The employees described in paragraph (c) of this subsection
are compensated at an annual rate of not less than ___ percent of
the average annual wage of the county or counties in which the
zone is located.
(2) As used in this section, 'primarily' means more than 80
percent. + }
SECTION 11. { + (1) A business firm that has not yet commenced
any activities within an electronic commerce zone that would
permit the firm to be taxed under section 15 or 17 of this 2001
Act may seek precertification under this section.
(2) The application shall be on a form prescribed by the
Economic and Community Development Department and shall contain
any information required by the department, including all of the
following:
(a) A description of the activities the applicant plans to
engage in within the electronic commerce zone.
(b) The dates on which the applicant plans to begin operations
in each of the activities listed in paragraph (a) of this
subsection.
(c) The number of employees the applicant plans to hire who
will be employed in the activities described in paragraph (a) of
this subsection and whose place of employment will be within the
electronic commerce zone.
(d) The expected average annual wage of employees described in
paragraph (c) of this subsection.
(e) A description of the equipment or other property, including
intangible property, in which the business firm intends to invest
to engage in electronic commerce within the electronic commerce
zone.
(f) An itemized schedule of the costs of the investments
described in paragraph (e) of this subsection.
(3) The department shall review each application submitted
under this section and shall precertify or deny precertification
based on whether the firm would be certified under section 10 of
this 2001 Act if the firm actually completed the hiring and
investments described in the application and commenced the
business activities described in the application as of the dates
set forth in the application.
(4) The department may request any documentation or undertake
any investigation necessary to ascertain the veracity of any
statement made on an application.
(5) The department shall precertify or deny precertification
within 180 days following the date the application is filed with
the department.
(6) A denial of precertification may be appealed to the
department in the manner of a contested case under ORS 183.310 to
183.550. + }
SECTION 12. { + (1) A business firm that has been precertified
under section 11 of this 2001 Act must be certified under section
10 of this 2001 Act if:
(a) The business firm undertakes all of the hiring and
investments that were set forth in the precertification
application and commences the business activities set forth in
the precertification application by the dates set forth in the
precertification application; and
(b) The electronic commerce zone has not been terminated as of
the date the application for certification is filed.
(2) Nothing in this section prohibits the Economic and
Community Development Department from certifying a precertified
business firm under section 10 of this 2001 Act if the
precertified business firm does not qualify for mandatory
certification under subsection (1) of this section. + }
SECTION 13. { + (1) For ___ years following the year in which
a business firm is certified under section 10 of this 2001 Act,
the firm must annually file a report with the Economic and
Community Development Department.
(2) The report shall be filed at the time prescribed by the
Economic and Community Development Department by rule and shall
contain all information the department requires to be reported,
including:
(a) A summary of all of the electronic commerce activities of
the certified business firm that are conducted within the
electronic commerce zone;
(b) The number of full-time equivalent employees employed by
the firm in electronic commerce activities conducted in the
electronic commerce zone; and
(c) The average annual compensation of the employees described
in paragraph (b) of this subsection.
(3) The Economic and Community Development Department shall
revoke the certification of a business firm if the firm:
(a) Fails to file a required report;
(b) Ceases to conduct electronic commerce activities in the
electronic commerce zone;
(c) Fails to maintain an average annual employment that is at
least ___ percent of the full-time equivalent employment the firm
had at the time application for certification under section 10 of
this 2001 Act was made; or
(d) Fails to maintain an annual average compensation for
electronic commerce employees that is not less than ___ percent
of the average annual wage of the county or counties in which the
electronic commerce zone is located.
(4) The Economic and Community Development Department shall
send a written notice of the certification revocation to the
business firm and to the Department of Revenue.
(5) A decision to revoke the certification of a business firm
may be appealed to the Economic and Community Development
Department in the manner of a contested case under ORS 183.310 to
183.550.
(6) A certification that has been revoked under this section
may be reinstated within six months of the date of revocation if
the business firm rectifies the circumstance under subsection (3)
of this section that served as the basis for the revocation.
(7) After ___ years following the date a business firm is
certified under section 10 of this 2001 Act, the certification of
the business firm may not be revoked under this section. + }
SECTION 14. { + Section 15 of this 2001 Act is added to and
made a part of ORS chapter 316. + }
SECTION 15. { + (1) Notwithstanding ORS 316.037, the section
1231 gains of a taxpayer shall be taxed at the rate of ___
percent in lieu of the rates otherwise applicable to the gain if:
(a) A business firm that is certified under section 10 of this
2001 Act sold or exchanged the property from which the gain is
derived; and
(b) The property was used primarily in a trade or business
activity for which the business firm had obtained certification
under section 10 of this 2001 Act.
(2) In order to substantiate the preferential tax rate
established in this section, the taxpayer must maintain copies of
the certification issued to the business firm under section 10 of
this 2001 Act and other documentation establishing that the
section 1231 gain was derived from the sale or exchange of
property used in the electronic commerce activities of the
certified business firm in the electronic commerce zone for which
certification was granted.
(3) As used in this section, 'business firm' has the meaning
given that term in section 2 of this 2001 Act. + }
SECTION 16. { + Section 17 of this 2001 Act is added to and
made a part of ORS chapter 317. + }
SECTION 17. { + (1) Notwithstanding ORS 317.061, the section
1231 gains of a taxpayer + } { + shall be taxed at the rate of
___ percent in lieu of the rates otherwise applicable to the gain
if:
(a) A business firm that is certified under section 10 of this
2001 Act sold or exchanged the property from which the gain is
derived; and
(b) The property was used primarily in a trade or business
activity for which the business firm had obtained certification
under section 10 of this 2001 Act.
(2) In order to substantiate the preferential tax rate
established in this section, the taxpayer must maintain copies of
the certification issued to the business firm under section 10 of
this 2001 Act and other documentation establishing that the
section 1231 gain was derived from the sale or exchange of
property used in the electronic commerce activities of the
certified business firm in the electronic commerce zone for which
certification was granted.
(3) As used in this section, 'business firm' has the meaning
given that term in section 2 of this 2001 Act. + }
SECTION 18. { + Sections 15 and 17 of this 2001 Act apply to
certifications issued to business firms under section 10 of this
2001 Act in tax years beginning on or after January 1, 2002. + }
SECTION 19. ORS 285B.650 is amended to read:
285B.650. As used in ORS 285B.650 to 285B.728, unless the
context requires otherwise:
(1) 'Business firm' means a person operating or conducting one
or more trades or businesses but does not include any
governmental agency, municipal corporation or nonprofit
corporation.
(2) 'Eligible business firm' means a firm engaged in an
activity described under ORS 285B.707 which may file an
application for precertification under ORS 285B.719.
(3) 'Employee' means a person who works more than 32 hours per
week, but does not include persons with temporary or seasonal
jobs or persons hired solely to construct qualified property.
{ + (4) 'Energy facility' has the meaning given that term in
ORS 469.300.
(5) 'Energy generation enterprise zone' means an enterprise
zone designated pursuant to section 20 of this 2001 Act. + }
{ - (4) - } { + (6) + } 'Enterprise zone' means one of the
30 areas designated or terminated and redesignated by order of
the Governor under ORS 284.160 (1987 Replacement Part) before
October 3, 1989, one of the 17 areas designated by the Director
of the Economic and Community Development Department under ORS
285B.653, areas designated under ORS 285B.677 { - and - }
{ + , + } areas designated under ORS 285B.689 { + and energy
generation enterprise zones designated under section 20 of this
2001 Act + }.
{ - (5) - } { + (7) + } 'First-source hiring agreement'
means an agreement between a precertified business firm and a
publicly funded job training provider whereby the job training
provider refers qualified candidates to the firm for new jobs and
job openings in the firm.
{ - (6) - } { + (8) + } 'Modification' means modernization,
renovation or remodeling of an existing building or structure.
{ - (7) - } { + (9) + } 'Nonurban enterprise zone' means an
enterprise zone located outside a regional or metropolitan urban
growth boundary.
{ - (8) - } { + (10) + } 'Precertified business firm' means
an eligible business firm whose application for precertification
has been approved under ORS 285B.719 and which may apply for a
property tax exemption under ORS 285B.722.
{ - (9) - } { + (11) + } 'Publicly funded job training
provider' includes but is not limited to, community colleges, Job
Training Partnership Act service providers, and other similar
programs.
{ - (10) - } { + (12) + } 'Qualified business firm' means a
business firm described in ORS 285B.704 whose application for a
property tax exemption has been approved under ORS 285B.722.
{ - (11) - } { + (13) + } 'Qualified property' means
property described under ORS 285B.713.
{ - (12) - } { + (14) + } 'Sponsor' means the city or
county that applied for and received approval of an enterprise
zone under ORS 284.150 and 284.160 (1987 Replacement Part), under
ORS 285B.656 and 285B.659, under ORS 285B.677 or 285B.686
{ - or - } { + , + } under ORS 285B.689 { + or under section
20 of this 2001 Act + }.
{ - (13) - } { + (15) + } 'Urban enterprise zone' means an
enterprise zone in a metropolitan statistical area, as defined by
the most recent federal decennial census, located inside a
regional or metropolitan urban growth boundary.
SECTION 20. { + (1) Any city or county, or combination of
cities and counties, may file an application under ORS 285B.656
for designation of an area as an energy generation enterprise
zone. The applicant shall specify on the application that an
energy generation enterprise zone is being sought.
(2) The Director of the Economic and Community Development
Department may designate energy generation enterprise zones
without regard to any limitation on the number of enterprise
zones that may be designated in this state.
(3) An energy generation enterprise zone need not meet the
requirements of ORS 285B.662.
(4) The director shall approve an application filed under this
section and designate the area that was the subject of the
application as an energy generation enterprise zone if the
director determines that the proposed area meets the requirements
established in rules adopted under section 21 of this 2001 Act.
(5) Except as otherwise provided in this section, an energy
generation enterprise zone shall be an enterprise zone under ORS
285B.650 to 285B.728 and property shall be exempt from ad valorem
property tax to the extent allowed under ORS 285B.650 to
285B.728. + }
SECTION 21. { + The Economic and Community Development
Department shall by rule establish requirements that an area that
has been proposed for energy generation enterprise zone
designation must meet in order for the Director of the Economic
and Community Development Department to designate the zone. The
rules shall be designed so that the requirements can be met only
when there is a demonstrated need for increases in energy
generation capacity in the region that would be served by energy
facilities located in the proposed zone. + }
SECTION 22. ORS 285B.707 is amended to read:
285B.707. (1) Except as provided in subsections (3) { - and
(4) - } { + to (5) + } of this section, to be an eligible
business firm, a business firm must be engaged in the business of
providing goods, products or services to other businesses, and
not to the general public for personal or household use or
consumption, through activities including, but not limited to,
manufacturing, assembly, fabrication, processing, shipping or
storage.
(2) Businesses significantly engaged in business activities
within the enterprise zone such as retail sales or services,
child care, housing, retail food service, health care, tourism,
entertainment, financial services, professional services, leasing
space to others, property management, construction or other
similar activities are not eligible business firms.
(3) Notwithstanding subsection (1) or (2) of this section, a
business firm that operates a hotel, motel or destination resort
is an eligible business firm regardless of the sale of services
for personal consumption, if allowed in the enterprise zone under
ORS 285B.716.
(4) Notwithstanding any other provision of this section, if a
business firm described in subsection (2) of this section engages
in an activity described in subsection (1) of this section, the
business firm is an eligible business firm if the activity is
performed at a location that is separate from the activity of the
firm that is described in subsection (2) of this section. For
purposes of determining whether a business firm described in this
subsection satisfies the requirements of ORS 285B.704, only the
operations of the firm that are described in subsection (1) of
this section and employees working a majority of their time in
those operations shall be considered.
{ + (5) Notwithstanding subsections (1) and (2) of this
section, a business firm that operates an energy facility within
an energy generation enterprise zone is an eligible business
firm. + }
{ - (5) - } { + (6) + } Two or more business firms that
otherwise meet the requirements of this section may elect to be
treated as one eligible business firm if 100 percent of the
equity interest in the business firms is owned by the same person
or persons, or if one of the business firms owns 100 percent of
the equity interest of the other or others.
{ - (6) - } { + (7) + } Notwithstanding subsection (1) or
(2) of this section, a business firm engaged in the activity of
providing a retail or financial service is an eligible business
firm if:
(a) The activity serves customers by responding to orders or
requests received only by telephone, computer, the Internet or
similar means of telecommunications; and
(b) Not less than 90 percent of the customers or orders are
located and originate in an area from which long distance
telephone charges, in the absence of a toll-free number, would
apply if the order were placed by telephone.
{ - (7) - } { + (8) + } Notwithstanding subsection (1) or
(2) of this section, a business firm that makes an investment in
qualified property at a facility that serves statewide, regional,
national or global operations of the firm through administrative,
design, financial, management, marketing or other activities is
an eligible business firm, without regard to the relationship of
such activities to any otherwise eligible activities within the
enterprise zone if:
(a) In approving the application for precertification, the zone
sponsor includes with the application a formal finding that the
facility complies with the requirements of this subsection and
that the size of the proposed investment, the employment at the
facility or the nature of the activities at the facility will
significantly enhance the local economy, in relation to the
overall purpose and employment of the zone;
(b) The actual investment and facility of the firm are
consistent with the descriptions presented in the
precertification application; and
(c) For purposes of ORS 285B.704, all employees at the facility
constitute employment of the firm, as defined in ORS 285B.704.
SECTION 23. ORS 285B.713 is amended to read:
285B.713. (1) The property tax exemption provided under ORS
285B.698 shall be available only for qualified property of a
qualified business firm.
(2) The following kinds of property are qualified for the
exemption allowed under ORS 285B.698:
(a) A new building or structure with a cost of $25,000 or more.
(b) An addition to or modification of an existing building or
structure. The total cost of qualifying additions or
modifications to an existing building or structure shall be at
least $25,000 in one assessment year. In order to satisfy the
minimum investment requirement, the cost of two or more additions
or modifications made in one assessment year to a single building
or structure may be aggregated.
(c) Any real property machinery or equipment, whether new, used
or reconditioned, that is newly purchased, leased or transferred
into the enterprise zone from outside the county within which the
zone is located and installed in property owned or leased by a
qualified business firm.
(d) Any single item of personal property machinery or
equipment, whether new, used or reconditioned, that is newly
purchased, leased or transferred into the enterprise zone from
outside the county within which the zone is located and installed
in property owned or leased by a qualified business firm and:
(A) That has a cost of at least $1,000 if the property is used
exclusively for producing tangible goods; or
(B) That has a cost of at least $50,000.
(e) A new building and associated structures owned by a
governmental body that are leased to one or more qualified
business firms.
(f) Any property otherwise described in this section that is
owned or leased and operated by a business firm operating a
hotel, motel or destination resort, to the extent that the
property is located on the same site as the hotel, motel or
destination resort and is used primarily to serve overnight
guests of the hotel, motel or destination resort. For purposes of
this paragraph, property is primarily used to serve guests if at
least 50 percent of any receipts from such use are paid by
guests.
(g) Any property otherwise described in this section that is
owned or leased and operated by a business firm described in ORS
285B.707 (4), to the extent that the property is used exclusively
in an activity described in ORS 285B.707 (1).
{ + (h) If located within an energy generation enterprise
zone, only property otherwise described in this section that is
an energy facility, an addition to or modification of an energy
facility or property used in or to support the operations of an
energy facility. + }
(3) The following property is not qualified for exemption under
ORS 285B.698:
(a) Land.
(b) Self-propelled motorized vehicles.
(c) Property excluded under ORS 285B.698 (5).
SECTION 24. { + Sections 20 and 21 of this 2001 Act and the
amendments to ORS 285B.650, 285B.707 and 285B.713 by sections 19,
22 and 23 of this 2001 Act apply to tax years beginning on or
after July 1, 2002. + }
SECTION 25. { + Sections 20, 21 and 30 to 32 of this 2001 Act
are added to and made a part of ORS 285B.650 to 285B.728. + }
SECTION 26. Section 3c, chapter 1104, Oregon Laws 1999, is
amended to read:
{ + Sec. 3c. + } (1) If an eligible business firm completes
an investment of $25 million or more in the enterprise zone in
qualified property confined entirely within an established
operating division of the firm that would be an eligible business
firm if it were separately incorporated, the firm may elect to
have the division treated as a separate eligible business firm
for purposes of applicable requirements under ORS 285B.692 to
285B.728. The election described in this subsection may only be
made with respect to an application for the exemption of
qualified property under ORS 285B.722 that was filed on or before
January 1, 1999.
(2) For purposes of ORS 285B.704 (2) or (3), if the eligible
business firm makes a total investment in the enterprise zone of
$50 million or more in qualified property that initially
qualifies for not more than three consecutive years, the
governing body of the sponsor may also provide for one or more of
the following as documented in the resolution under ORS 285B.704:
(a) That, notwithstanding ORS 285B.701 (3) or 285B.719 (1),
this subsection and the application for precertification includes
qualified property in the zone, for which construction,
modification or installation commenced prior to the application,
if the firm is precertified prior to use or occupancy of the
qualified property;
(b) That the exemption shall be granted without regard to the
cost of any portion of the investment that initially qualifies in
any single year; or
(c) That the firm is not bound by any election under subsection
(1) of this section or ORS 285B.707 { - (5) - } { + (6) + }
in effect at the time at which the zone terminated, in the case
of a precertification and exemption that is otherwise allowed
under ORS 285B.686 (2).
SECTION 27. { + Section 28 of this 2001 Act is added to and
made a part of ORS 469.300 to 469.563. + }
SECTION 28. { + (1) A county, city, district, political
subdivision or other agency of this state may not:
(a) Levy or collect from an energy facility any tax, license
fee or other fee measured by the volume of electrical energy
produced by that energy facility; or
(b) Levy or collect any tax, license fee or other fee from any
person on the volume of fuel purchased for, delivered to or
consumed by any energy facility, except when the county, city,
district, political subdivision or other agency levies or imposes
generally, on a nondiscriminatory basis throughout the
jurisdiction or taxing authority, an otherwise lawful tax,
license fee or other fee on the purchase, delivery or consumption
of fuel.
(2) Nothing in subsection (1) of this section applies to:
(a) A city that collects municipal franchise fees;
(b) A city with a municipal electric utility that provides for
in-lieu-of-taxes, that levies or collects a tax, license fee or
other fee on a consumer of electric services or that receives
compensation for goods, services or property provided to an
energy facility; or
(c) A city that exercises the authority provided under ORS
221.655. + }
SECTION 29. { + Section 28 of this 2001 Act applies to taxes,
license fees or other fees created by a county, city, district,
political subdivision or other agency of the state on or after
January 1, 2001. + }
SECTION 30. { + The Legislative Assembly finds and declares
that:
(1) The designation of energy generation enterprise zones
provides substantial benefits to business firms that construct,
add, modify or install energy facilities in Oregon;
(2) A business firm that constructs, adds, modifies or installs
an energy facility in an energy generation enterprise zone and
that will be eligible for exemption from ad valorem property
taxation under ORS 285B.698 has broad discretion in determining
the workforce to be used to construct, add, modify or install the
energy facility; and
(3) Oregon communities and workers should have the opportunity
to benefit from the construction, addition, modification or
installation of energy facilities in energy generation enterprise
zones. + }
SECTION 31. { + (1) A business firm applying for
precertification under ORS 285B.719 and subsequently for property
tax exemption under ORS 285B.722 shall, prior to applying for
precertification or property tax exemption, enter into an
agreement with a city or county that applied for designation of
the energy generation enterprise zone in which the firm intends
to operate. The agreement must state the extent to which the
firm, in constructing, adding, modifying or installing energy
facilities, must:
(a) Meet the standards of responsibility specified in ORS
279.029.
(b) Meet standards so as not to be disqualified by a public
contracting agency under ORS 279.037.
(c) Hire local residents whenever possible to construct, add,
modify or install energy facilities.
(d) Demonstrate that a contractor is registered with the
Apprenticeship and Training Division of the Bureau of Labor and
Industries or with the Bureau of Apprenticeship and Training of
the United States Department of Labor as a training agent for the
classification of workers the contractor will employ.
(e) Demonstrate that a contractor has in place employer-paid
pension and health benefit plans for employees.
(f) Demonstrate that a contractor has in place a written
employee drug testing program that includes for-cause testing.
(g) Pay the prevailing rate of wage established by the
Commissioner of the Bureau of Labor and Industries pursuant to
ORS 279.359 for the locality where the work is to be performed.
(h) Utilize independent contractors to avoid the designation of
workers as employees of the contractor.
(i) Hold all subcontractors utilized in performance of the work
to the same standards expressed in this subsection.
(2) An applicant shall include a copy of the agreement with the
application for precertification or property tax exemption
submitted under ORS 285B.719 or 285B.722. + }
SECTION 32. { + (1) In the case of a business firm that is
subject to an agreement under section 31 of this 2001 Act, any
city or county within 30 miles of the energy generation
enterprise zone may request that the agreement be terminated.
(2) The termination request shall be submitted in writing to
the Economic and Community Development Department. A copy of the
request shall be sent to the business firm and to each city or
county that applied for zone designation under section 20 of this
2001 Act.
(3) The business firm, or a city or county described in
subsection (2) of this section, may submit comments related to
the termination request to the department within 14 days
following the date the termination request was submitted.
(4) Within 30 days following the receipt of the termination
request, the department shall decide to terminate the agreement
or continue the provisions of the agreement. The department shall
set forth its decision in writing. + }
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