74th OREGON LEGISLATIVE ASSEMBLY--2007 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 655
B-Engrossed
Senate Bill 151
Ordered by the Senate May 18
Including Senate Amendments dated April 10 and May 18
Printed pursuant to Senate Interim Rule 213.28 by order of the
President of the Senate in conformance with presession filing
rules, indicating neither advocacy nor opposition on the part
of the President (at the request of Governor Theodore R.
Kulongoski for Economic and Community Development Department)
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.
{ + Permits two-year extension of enterprise zone property
tax exemption for sustainable business firms. Applies to
sustainable business firms filing applications for authorization
after effective date of Act and after sponsor elects to extend
sustainable business firm enterprise zone property tax
exemption. + }
Extends sunset date for enterprise zone program from June 30,
2009, to June 30, 2013.
Directs Oregon Economic and Community Development Commission to
report to Legislative Assembly regarding evaluation of enterprise
zone performance and related tax incentives.
A BILL FOR AN ACT
Relating to enterprise zone program; creating new provisions;
amending ORS 285C.150, 285C.160, 285C.175, 285C.255 and
285C.406; and prescribing an effective date.
Be It Enacted by the People of the State of Oregon:
SECTION 1. { + Section 2 of this 2007 Act is added to and made
a part of ORS 285C.050 to 285C.250. + }
SECTION 2. { + (1)(a) The governing body of a city, county or
port that is seeking enterprise zone designation under ORS
285C.065 may elect to permit a qualified business firm described
in subsection (2) of this section to receive an extended period
of exemption on qualified property.
(b) The election must be made on or after the date the
governing body applies for zone designation under ORS 285C.065
and no later than six months following the date the zone is
designated.
(c) The election shall be made by a resolution adopted by the
governing body of the city, county or port. A resolution under
this paragraph does not take effect until submitted to the
Economic and Community Development Department and acknowledged by
the department.
(d) The resolution shall contain the commitment of the city,
county or port, as the sponsor of the enterprise zone, to:
(A) Confirm the fulfillment of criteria under subsection (2) of
this section; and
(B) Facilitate timely receipt and review of relevant documents,
evidence and other information necessary to confirm the continued
eligibility of the business firm for exemption.
(e) The sponsor may revoke an election made under this
subsection by resolution. If the sponsor revokes an election
under this subsection, the sponsor may not make another election
under this subsection.
(2) An eligible business firm is a sustainable business firm if
the business firm satisfies all of the following:
(a) Any qualified new building or addition to or modification
of an existing building owned or leased by the business firm must
be certified for design, construction and utilization by the
Leadership in Energy and Environmental Design Green Building
Rating System, Earth Advantage or any program for building
standards and practices that the department determines provides
comparable certification.
(b) The operations of the business firm in the enterprise zone
satisfy renewable portfolio standards consistent with the
standards required of an electric utility under ORS 757.600 to
757.687 in terms of the portion of energy, including but not
limited to electricity, consumed by the business firm that is
derived from renewable energy sources.
(c) The business firm has developed and implemented an
environmental management system for the business firm's
activities and facilities in the enterprise zone. The
environmental management system must include plans for improving
resource efficiency and for minimizing or eliminating solid and
hazardous waste and emissions of water and air pollutants. The
business firm shall develop the environmental management system
based on International Organization for Standardization standard
ISO 14001 or another standard that the department determines is
comparable for minimizing the impact of industry on the
environment.
(d) The business firm uses and maintains a publicly available
strategy and plan for reducing greenhouse gas emissions and
mitigating the contribution of the business firm to global
climate change.
(e) The business firm publicly releases an annual
sustainability report that has defined measurements and
benchmarks for evaluating progress on an annual basis. If
feasible, the business firm shall make the report available for
review through the business firm's website. + }
SECTION 3. { + Notwithstanding section 2 (1)(b) of this 2007
Act, if an enterprise zone is designated before the effective
date of this 2007 Act, the sponsor of the enterprise zone may
elect to permit a qualified business firm described in section 2
(2) of this 2007 Act to receive an extended period of exemption
on qualified property. The sponsor may make an election under
this section on or before June 30, 2008. If an election under
this section otherwise complies with section 2 (1) of this 2007
Act, the election shall be considered an election under section 2
(1) of this 2007 Act. + }
SECTION 4. ORS 285C.150 is amended to read:
285C.150. (1) The sponsor of an urban enterprise zone may
require an eligible business firm seeking authorization under ORS
285C.140 to satisfy other conditions in order for the firm to be
authorized.
(2) The conditions that a sponsor may impose under this section
must be reasonably related to the public purpose of providing
opportunities for groups of persons, as defined by the sponsor,
to obtain employment, including but not limited to providing
training to these groups of persons.
(3) The sponsor may establish procedures for monitoring and
verifying compliance with conditions imposed on the firm under
this section and require the firm to agree to the procedures as a
condition to authorizing the firm.
(4) Conditions established under this section may be imposed on
a firm only if the sponsor has adopted a policy that establishes
standards for the imposition of the conditions.
(5) Conditions imposed by a sponsor under this section shall be
in addition to, and not in lieu of, conditions and requirements
imposed under ORS 285C.050 to 285C.250 or pursuant to an
agreement entered into under ORS 285C.160 and do not affect the
duties of the Department of Revenue or of the county assessor
under ORS 285C.050 to 285C.250.
{ + (6) Notwithstanding subsection (2) of this section, the
sponsor may adjust conditions imposed under this section as
reasonably necessary for sustainable business firms under section
2 of this 2007 Act. + }
{ - (6) - } { + (7) + } A sponsor of an urban enterprise
zone that imposes conditions for authorization on eligible
business firms under this section shall submit a written report
every four years to the Legislative Assembly concerning the
application and effects of the conditions on business firms
within the enterprise zone.
SECTION 5. ORS 285C.160 is amended to read:
285C.160. (1) An eligible business firm seeking authorization
under ORS 285C.140 and the sponsor of the enterprise zone in
which the firm intends to invest may enter into a written
agreement to extend the period during which the qualified
property is exempt from taxation under ORS 285C.175 if the firm
complies with the terms of the agreement.
(2) The period for which the qualified property is to continue
to be exempt must be set forth in the agreement and may not
exceed two additional tax years.
(3) In order for an agreement under this section to extend the
period of exemption, the agreement must be executed on or before
the date on which the firm is authorized, and:
(a) If the enterprise zone is a rural enterprise zone or an
urban enterprise zone located inside a metropolitan statistical
area of fewer than 400,000 residents, the agreement must require
that the firm meet both of the following:
(A) Annually compensate all new employees hired by the firm at
an average rate of not less than 150 percent of the county
average annual wage for each assessment year during the tax
exemption period, as determined at the time of authorization.
(B) Any additional requirement that the sponsor may reasonably
request.
(b) If the enterprise zone is an urban enterprise zone located
inside a metropolitan statistical area of 400,000 residents or
more, the agreement must require that the firm meet any
additional requirement the sponsor may reasonably require.
(4) If a firm enters into an agreement under this section that
includes a compensation requirement under subsection (3)(a)(A) of
this section and the firm subsequently submits one or more
statements of continued intent under ORS 285C.165,
notwithstanding the terms of the agreement made under this
section, for each statement of continued intent submitted, the
county average annual wage under subsection (3)(a)(A) of this
section shall be adjusted to a level that is current with the
statement.
{ + (5) Notwithstanding subsections (1) to (4) of this
section, the period during which the qualified property is exempt
from taxation under ORS 285C.175 is extended for two additional
years if:
(a) The sponsor of the enterprise zone has elected under
section 2 (1) of this 2007 Act to extend the exemption period of
sustainable business firms;
(b) The eligible business firm submits documentation, evidence
and any other information required by the sponsor to show the
firm's commitment to and fulfillment of the criteria provided in
section 2 (2) of this 2007 Act; and
(c) Based on the information supplied to the sponsor by the
eligible business firm, the sponsor confirms in writing to the
assessor of the county where the property is located:
(A) On or before the date on which the firm is authorized, that
the firm reasonably intends to satisfy the criteria of a
sustainable business firm; and
(B) On or before April 1 of the third tax year of exemption,
that the firm has met the criteria of a sustainable business
firm. The sponsor may retract the written confirmation required
by this paragraph on or before April 1 of the third year of
exemption, if the sponsor determines that the firm has failed to
maintain satisfaction of the criteria. + }
SECTION 6. ORS 285C.175 is amended to read:
285C.175. (1) Property of an authorized business firm is exempt
from ad valorem property taxation if:
(a) The property is qualified property under ORS 285C.180;
(b) The firm meets the qualifications under ORS 285C.200; and
(c) The firm has entered into a first-source hiring agreement
under ORS 285C.215.
(2)(a) The exemption allowed under this section applies to the
first tax year for which, as of January 1 preceding the tax year,
the qualified property is in service. The exemption shall
continue for the next two succeeding tax years if the property
continues to be owned or leased by the business firm and located
in the enterprise zone.
(b) The property { - may be - } { + is + } exempt from
property taxation under this section for up to two additional tax
years consecutively following the tax years described in
paragraph (a) of this subsection, if authorized by the written
agreement entered into by the firm and the sponsor { + or as
otherwise allowed + } under ORS 285C.160.
(c) If qualified property of a qualified business firm is sold
or leased to an eligible business firm in the enterprise zone
during the period the property is exempt under this section, the
purchasing or leasing firm is eligible to continue the exemption
of the selling or leasing firm for the balance of the exemption
period, but only if any effects on employment within the zone
that result from the sale or lease do not constitute substantial
curtailment under ORS 285C.210.
(3)(a) The exemption allowed under this section shall be 100
percent of the assessed value of the qualified property in each
of the tax years for which the exemption is available.
(b) Notwithstanding paragraph (a) of this subsection:
(A) If the qualified property is an addition to or modification
of an existing building or structure, the exemption shall be
measured by the increase in value, if any, attributable to the
addition or modification.
(B) If the qualified property is an item of reconditioned,
refurbished, retrofitted or upgraded real property machinery or
equipment, the exemption shall be measured by the increase in the
value of the item that is attributable to the reconditioning,
refurbishment, retrofitting or upgrade.
(4)(a) An exemption may not be granted under this section for
qualified property assessed for property tax purposes in the
county in which the property is located on or before the
effective date of the:
(A) Designation of the zone; or
(B) Approval of a boundary change for the zone if the property
is located in an area added to the zone.
(b) An exemption may not be granted for qualified property
constructed, added, modified or installed in the zone or in the
process of construction, addition, modification or installation
in the zone on or before the effective date of the:
(A) Designation of the zone; or
(B) Approval of a boundary change for the zone if the property
is located in an area added to the zone.
(c) An exemption may not be granted for any qualified property
that was in service within the zone for more than 12 months by
January 1 of the first assessment year for which an exemption
claim is made.
(d) An exemption may not be granted for any qualified property
unless the property is in use or occupancy before July 1 of the
year immediately following the year during which the completion
of the construction, addition, modification or installation
occurred.
(e) Except as provided in ORS 285C.245, an exemption may not be
granted for qualified property constructed, added, modified or
installed after termination of an enterprise zone.
(5) Property is not required to have been exempt under ORS
285C.170 in order to be exempt under this section.
(6) The county assessor shall notify the business firm in
writing whenever property is denied an exemption under this
section. The denial of exemption may be appealed to the Oregon
Tax Court under ORS 305.404 to 305.560.
(7) For each tax year that the property is exempt from
taxation, the assessor shall:
(a) Enter on the assessment roll, as a notation, the assessed
value of the property as if it were not exempt under this
section.
(b) Enter on the assessment roll, as a notation, the amount of
additional taxes that would be due if the property were not
exempt.
(c) Indicate on the assessment roll that the property is exempt
and is subject to potential additional taxes as provided in ORS
285C.240, by adding the notation 'enterprise zone exemption
(potential additional tax). '
SECTION 7. { + Sections 2 and 3 of this 2007 Act and the
amendments to ORS 285C.150, 285C.160 and 285C.175 by sections 4
to 6 of this 2007 Act apply to exemptions on qualified property
for which the eligible business firm's application for
authorization under ORS 285C.140 is made on or after the
effective date of this 2007 Act and the effective date of
election by the sponsor of the enterprise zone under section 2 of
this 2007 Act. + }
SECTION 8. ORS 285C.255 is amended to read:
285C.255. (1) Notwithstanding any other provision of ORS
285C.050 to 285C.250:
(a) An area may not be designated as an enterprise zone after
June 30, { - 2009 - } { + 2013 + };
(b) A business firm may not obtain authorization under ORS
285C.140 after June 30, { - 2009 - } { + 2013 + }; and
(c) An enterprise zone, except for a reservation enterprise
zone, that is in existence on June 29, { - 2009 - } { +
2013 + }, is terminated on June 30, { - 2009 - } { +
2013 + }.
(2) Notwithstanding subsection (1) of this section:
(a) A reservation enterprise zone may be designated under ORS
285C.306 after June 30, { - 2009 - } { + 2013 + }; and
(b) A business firm may obtain authorization under ORS 285C.140
after June 30, { - 2009 - } { + 2013 + }:
(A) If located in a reservation enterprise zone; or
(B) As allowed under ORS 285C.245 (1)(b).
SECTION 9. ORS 285C.406 is amended to read:
285C.406. In order for a taxpayer to claim the property tax
exemption under ORS 285C.409 or a corporate excise or income tax
credit under ORS 317.124:
(1) The written agreement between the business firm and the
rural enterprise zone sponsor that is required under ORS 285C.403
(3)(c) must be entered into prior to the termination of the
enterprise zone under ORS 285C.245; and
(2) The business firm must obtain certification under ORS
285C.403 on or before June 30, { - 2009 - } { + 2013 + }.
SECTION 10. { + (1) Prior to February 1, 2009, the Oregon
Economic and Community Development Commission shall submit to the
Seventy-fifth Legislative Assembly a report that evaluates the
performance of enterprise zones and related tax incentives under
ORS 285C.050 to 285C.250.
(2) The report may include, but is not limited to, evaluations
of:
(a) The cost-benefit analysis of the effects on the state and
local economy, public finance and services and other matters
associated with actual business firms receiving the incentives,
including but not limited to assessing the degree to which the
incentives are significantly affecting investments and employment
in the enterprise zones; and
(b) The statistical change in measures of local economic
hardship over time for communities associated with enterprise
zones.
(3) Under the direction of the commission, the Economic and
Community Development Department shall retain the services of one
or more outside experts to perform the evaluations described in
this section or to review the results of the evaluations.
(4) The commission shall share preliminary results of the
evaluations with interested parties and consider ways to
incorporate comments received into the report submitted to the
Legislative Assembly under subsection (1) of this section. + }
SECTION 11. { + This 2007 Act takes effect on the 91st day
after the date on which the regular session of the Seventy-fourth
Legislative Assembly adjourns sine die. + }
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