Chapter 374 Oregon Laws 2003

AN ACT

HB 2298

Relating to taxation; creating new provisions; amending ORS 285B.103, 285B.105 and 285B.108; and prescribing an effective date.

Be It Enacted by the People of the State of Oregon:

SECTION 1. ORS 285B.103 is amended to read:

285B.103. As used in ORS 285B.103 to 285B.108:

(1) “Business firm” has the meaning given that term in ORS 285B.650.

(2) “County per capita personal income” means the [most recently available county] per capita personal income [statistics] level published by the Bureau of Economic Analysis of the United States Department of Commerce for a county.

(3) “County unemployment rate” means the most recently available unemployment rate for the county, as determined by the Employment Department.

(4) “Facility” means the land, real property improvements and personal property that are used by a business firm to conduct business operations, and that are the subject of an application for preliminary certification under ORS 285B.105 or annual certification under ORS 285B.108.

(5) “Qualified location” means any area that is:

(a) Within the [boundaries] urban growth boundary of a city [of 10,000] that has 15,000 or fewer residents or is land zoned for industrial use; and

(b) [that is] Located in a county that, during either of the two years preceding the date an application for preliminary certification is filed under ORS 285B.105, had both:

[(a)] (A) [Has] A county unemployment rate that [is] was in the highest quartile of county unemployment rates in this state [as of the date of the application for preliminary certification under ORS 285B.105]; and

[(b)] (B) [Has] A county per capita personal income that [is] was in the lowest [quartile] third of county per capita personal incomes in this state [as of the date of the application for preliminary certification under ORS 285B.105].

(6) “Urban growth boundary” means an urban growth boundary contained in a city or county comprehensive plan that has been acknowledged by the Land Conservation and Development Commission pursuant to ORS 197.251 or an urban growth boundary that has been adopted by a metropolitan service district under ORS 268.390 (3).

SECTION 2. ORS 285B.105 is amended to read:

285B.105. (1) A business firm seeking the income and corporate excise tax exemption allowed under ORS 316.778 or 317.391 shall, before the commencement of construction, reconstruction, modification or installation of property or improvements at the location for which the exemption is sought and before the hiring of any employees at that location, apply to the Economic and Community Development Department for preliminary certification under this section.

(2) The application shall be on a form prescribed by the department and shall contain the following information:

(a) The proposed location of the facility;

(b) A description of the property to be constructed, reconstructed, modified, acquired, installed or leased and that is to comprise the facility [upon being placed in service] when the business firm commences business operations at the facility;

(d) The number of full-time, year-round employees the business firm intends to hire;

(e) The minimum annual average compensation intended to be given to the employees described in paragraph (d) of this subsection;

(f) A description of any other business activities of the firm in this state at the time of application, sufficient for the department to be able to determine if the proposed facility will constitute a new business in this state; and

(g) Any other information that the department requires.

(3) An application filed under this section must be accompanied by a fee in an amount prescribed by the Economic and Community Development Department by rule. The fee required by the department may not exceed $500.

(4)(a) When an application is filed under this section, the department shall send copies of the application to the governing bodies of the city and county in which the facility is proposed to be located. If the facility is to be located within a port, the department shall also send a copy of the application to the governing body of the port.

(b) The governing body of a city, port or county described in paragraph (a) of this subsection may object to the preliminary certification of a business firm if the firm would be:

(A) In competition with an existing business employing individuals within the city, port or county; or

(B) [would be] Incompatible with economic growth or development standards that the city, port or county had adopted prior to the date of application for preliminary certification.

(c) If the governing body of the city, port or county decides to object to preliminary certification of the firm, the governing body shall adopt a resolution stating its objection and the reason for its objection.

[(c)] (d) The governing body of a city, port or county has 60 days from the date the application is sent to the city, port or county to object to preliminary certification. If the objection is not made within the 60-day period, the city, port or county shall be deemed to have agreed to preliminary certification.

(5) When an application is filed under this section, the department shall review the application and determine whether all of the following requirements are met:

(a) The proposed facility is to be located at a qualified location.

(b) The proposed facility is intended to operate as a facility for at least 10 years following the date the facility becomes operational.

(d) The newly hired employees described in paragraph (c) of this subsection are to receive [at] a minimum annual compensation of:

(A) 150 percent of the county per capita personal income of the county in which the facility is to be located as of the date of the application for preliminary certification; or

(B) 100 percent of the county per capita personal income of the county in which the facility is to be located as of the date of the application for preliminary certification and [also] the business firm will provide health insurance coverage to the employees at the facility who are described in paragraph (c) of this subsection that [at least] equals or exceeds the health insurance benefits provided to employees of the city, port or county in which the facility is to be located.

[(d)] (e) The business operations of the business firm that are to be conducted at the facility constitute a new business that the firm does not operate at another location in this state.

[(e)] (f) The business operations of the business firm will not compete with existing businesses in the city or county in which the facility is to be located.

(6) If the department determines that the proposed facility, if completed as described in the application, [will meet] meets the criteria set forth in subsection (5) of this section and the governing body of the city, port or county [has not objected] does not object under subsection (4) of this section to preliminary certification of the firm, the department shall issue a preliminary certification to the firm.

(7) If the department determines that the proposed facility, as set forth in the application, does not meet the requirements for preliminary certification under this section, the department may not issue a preliminary certification. The applicant may appeal the decision to not issue a preliminary certification in the manner of a contested case under ORS 183.310 to 183.550. No appeal may be made if the reason for not issuing a preliminary certification is the objection of the governing body of the city, port or county under subsection (4) of this section.

SECTION 3. ORS 285B.108 is amended to read:

285B.108. (1) Following completion of the construction, reconstruction, modification, acquisition, installation or lease of the facility, [and] the hiring of employees to conduct business operations at the facility and the commencement of operations at the facility, a business firm that obtained preliminary certification under ORS 285B.105 [shall] may apply for annual certification under this section.

(2) The application shall be filed with the Economic and Community Development Department on or before 30 days after the end of the income or corporate excise tax year of the business firm.

(3) The application shall contain the following information:

(a) A description of the business operations conducted at the facility;

(b) The date business operations commenced at the facility;

(d) A schedule of the annual compensation paid to the employees; and

(e) Any other information required by the department.

(4) An application filed under this section must be accompanied by a fee in an amount prescribed by the [Economic and Community Development] department by rule. The fee required by the department may not exceed $100.

(5) The department shall review a business firm’s application and approve the application if:

(a) The business operations of the firm at the facility commenced within 10 years before the end of the tax year preceding the date of application for annual certification;

(b) The facility and the business operations actually conducted at the facility are reasonably similar to the proposed facility and proposed operations described in the application for preliminary certification; and

(c) The business firm has [met] satisfied the employment and minimum compensation requirements described in ORS 285B.105 (5)(c) and (d).

(6) In the case of the first application for annual certification filed by a business firm under this section, the department may approve the application only if, in addition to the requirements under subsection (5) of this section[,]:

(a) Business operations commenced at the facility within [six months] a reasonable period of time, as determined by the department by rule, following the date of preliminary certification under ORS 285B.105; and

(b) There has not been a significant interruption in construction, reconstruction, modification or installation activity at the location, as determined by the department by rule, following the date of preliminary certification under ORS 285B.105.

(7) The department may consult with the city or county in determining whether to approve or disapprove an application under this section.

(8) If the department [determines to approve] approves an application, it shall issue an annual certification to the business firm.

(9) If the department [determines to disapprove] disapproves an application, the business firm or any owner of the business firm may not be allowed the exemption described in ORS 316.778 or 317.391 for the tax year for which the annual certification was sought or for any subsequent tax year.

(10) The decision of the department to disapprove an application under this section may be appealed in the manner of a contested case under ORS 183.310 to 183.550.

(11) An annual certification may not be issued under this section for a tax year that is more than [10] nine consecutive tax years following the first tax year [business operations] an exemption is allowed under ORS 316.778 or 317.391 with respect to the facility [at the facility are commenced].

(12) The department must [determine to] approve or disapprove an application under this section within 30 days of the date the application is filed.

SECTION 4. The amendments to ORS 285B.103, 285B.105 and 285B.108 by sections 1 to 3 of this 2003 Act apply to preliminary and annual certifications issued on or after the effective date of this 2003 Act.

SECTION 5. This 2003 Act takes effect on the 91st day after the date on which the regular session of the Seventy-second Legislative Assembly adjourns sine die.

Approved by the Governor June 16, 2003

Filed in the office of Secretary of State June 16, 2003

Effective date November 26, 2003

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