Chapter
558
AN ACT
HB 2671
Relating to taxation; creating new provisions; amending ORS 285B.789; and prescribing an effective date.
Whereas ORS 285B.786 and 317.124 allow tax incentives for a business firm that makes a substantial investment in property in a nonurban enterprise zone; and
Whereas the tax incentives are discretionary, and local cities and counties decide whether it is in the best interest of the local community to grant the temporary property tax exemption allowed in ORS 285B.786; and
Whereas ORS 285B.789 presently allows a business firm to qualify for the tax exemption if the firm pays a minimum annual average wage of 150 percent of the county annual average wage, makes a minimum investment and hires a minimum number of employees; and
Whereas under current law the minimum investment ranges from one-half of one percent of the value of all taxable property in the county to $25 million, depending on location; and
Whereas under current law the minimum number of employees ranges from 10 to 100, depending on location; and
Whereas this bill will promote the creation of family wage jobs in rural areas by extending nonurban enterprise zone tax benefits to business firms that make a minimum investment of more than $200 million and that hire at least 10 full-time employees at an annual average wage of 150 percent of the county annual average wage; now, therefore,
Be It Enacted by the People of the State of
Oregon:
SECTION 1. ORS 285B.789 is amended to read:
285B.789. In order for a facility of a business firm to continue to be exempt from ad valorem property taxation under ORS 285B.786 for a tax year following the first assessment date on which the facility is in service, all of the conditions of any one of the alternative subsections in this section must be met:
(1) In order for the exemption under ORS 285B.786 (1)(c) to be allowable pursuant to this subsection:
(a) By the end of the calendar year in which the facility is placed in service, the total cost of the facility exceeds the lesser of $25 million or one percent of the real market value of all nonexempt taxable property in the county in which the facility is located, as determined for the assessment year in which the business firm is certified (and rounded to the nearest $10 million of such value);
(b) The business firm hires or will hire at least 75 full-time employees at the facility by the end of the fifth calendar year following the year in which the facility is placed in service; and
(c) The annual average compensation for employees, based on payroll, at the business firm’s facility is at least 150 percent of the average wage in the county in which the facility is located. This requirement may be initially met in any year during the first five years after the year in which operation of the facility begins, and thereafter is met if the annual average compensation at the facility for the year exceeds the average wage in the county for the year in which the requirement is initially met.
(2) In order for the exemption under ORS 285B.786 (1)(c) to be allowable pursuant to this subsection:
(a) The facility meets the total cost requirements set forth in subsection (1)(a) of this section;
(b) The business firm meets the annual average compensation requirements set forth in subsection (1)(c) of this section; and
(c)(A) The business firm hires or will hire at least 10 full-time employees at the facility by the end of the third calendar year following the year in which the facility is placed in service, and at the time that the business firm is certified, the location of the facility is in a county with a population of 10,000 or fewer; or
(B) The business firm hires or will hire at least 35 full-time employees at the facility by the end of the third calendar year following the year in which the facility is placed in service, and at the time that the business firm is certified, the location of the facility is in a county with a population of 40,000 or fewer.
(3) In order for the exemption under ORS 285B.786 (1)(c) to be allowable pursuant to this subsection:
(a) By the end of the calendar year in which the facility is placed in service, the total cost of the facility exceeds one-half of one percent of the real market value of all nonexempt taxable property in the county in which the facility is located, as determined for the assessment year in which the business firm is certified (and rounded to the nearest $10 million of such value);
(b) At the time that the business firm is certified, the location of the facility is 10 or more miles from Interstate Highway 5, as measured between the two closest points between the facility site and anywhere along that interstate highway;
(c) The business firm meets the annual average compensation requirements set forth in subsection (1)(c) of this section; and
(d)(A) The business firm hires or will hire at least 50 full-time employees at the facility by the end of the third calendar year following the year in which the facility is placed in service; or
(B) The business firm satisfies the requirements of subsection (2)(c)(A) or (B) of this section.
(4) In order for the exemption under ORS 285B.786 (1)(c) to be allowable pursuant to this subsection:
(a) Within three years either before or after the property tax year in which the facility is placed in service, the business firm places one or more other facilities in the same or another enterprise zone for which the business firm is certified and otherwise meets the requirements of ORS 285B.781 to 285B.796;
(b) The total cost of all facilities of the business firm exceeds $25 million by the end of the calendar year in which the last such facility is placed in service;
(c) The business firm meets the annual average compensation requirements set forth in subsection (1)(c) of this section independently for each facility of the firm; and
(d) The business firm hires or will hire a total of at least 100 full-time employees at all of the firm’s facilities by the end of the fifth calendar year following the year in which the first such facility is placed in service.
(5)
In order for the exemption under ORS 285B.786 (1)(c) to be allowable pursuant
to this subsection:
(a)
By the end of the calendar year in which the facility is placed in service, the
total cost of the facility exceeds $200 million;
(b)
At the time that the business firm is certified, the location of the facility
meets the siting requirements of subsection (3)(b) of this section;
(c)
The business firm hires or will hire at least 10 full-time employees at the
facility by the end of the third calendar year following the year in which the
facility is placed in service; and
(d) The business firm meets the annual average compensation requirements set forth in subsection (1)(c) of this section.
SECTION 2. The amendments to ORS 285B.789 by section 1 of this 2003 Act apply to exemptions of property of business firms that apply for certification pursuant to ORS 285B.783 on or after January 1, 2003.
SECTION 3. Section 4 of this 2003 Act is added to and made a part of ORS 285B.650 to 285B.728.
SECTION
4. (1) Property of a company
subject to central assessment under ORS 308.505 to 308.665 and described in
paragraph (a) of this subsection is exempt from ad valorem property taxation
for the tax year beginning July 1, 2003, if:
(a)
The land and all real property improvements, machinery, equipment and personal
property constitute an electricity generating facility that, as of June 1,
2003, was not yet operational; and
(b)
The property is located in an enterprise zone.
(2)
The exemption described in subsection (1) of this section may be allowed only
if the centrally assessed company and the enterprise zone sponsor have entered
into an agreement that meets the requirements of this section.
(3)
In order to satisfy the requirements of this section:
(a)
The agreement must be entered into by the company and the sponsor on or after
June 1, 2003, and before the day following the effective date of this 2003 Act;
(b)
The terms of the agreement must include a promise from the company to make a
payment in lieu of property taxes in an amount equal to the amount of property
taxes assessed against the property described in subsection (1) of this section
for the 2002-2003 tax year;
(c)
The agreement must set forth a distribution schedule under which the in-lieu
payment is distributed to taxing districts in shares that are proportionate to
the taxes assessed against the property described in subsection (1) of this
section for the 2002-2003 tax year, or as further modified to correspond to the
adjustments described in paragraph (d)(B) of this subsection; and
(d)
The terms of the agreement must provide for:
(A)
A one-time payment of the entire amount of the in-lieu payment on or before
November 15, 2003; or
(B)
At the election of the sponsor, a schedule of payments in annual installments
of no more than three years’ duration and payable on or before November 15 of
each year, under which:
(i)
The first payment consists of an amount equal to the sum of one-third of the
amount of 2002-2003 taxes assessed against the property and attributable to the
city, county, school district, education service district or community college
district in which the property described in subsection (1) of this section is
located and 100 percent of the amount of 2002-2003 taxes assessed against the
property and attributable to other taxing districts in which the property is
located; and
(ii)
Any subsequent installment payment consists of the unpaid balance of the
in-lieu payment divided by the number of years of installment payments remaining,
plus interest on unpaid amounts of the in-lieu payment, computed at the rate
prescribed in ORS 311.505.
(4) In-lieu payments described in this section shall be paid to the county treasurer. The treasurer shall distribute the payment moneys to taxing districts in accordance with the terms of the agreement.
SECTION 5. Section 4 of this 2003 Act is repealed January 2, 2006.
SECTION 6. 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 July 8, 2003
Filed in the office of Secretary of State July 8, 2003
Effective date November 26, 2003
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