75th OREGON LEGISLATIVE ASSEMBLY--2010 Special Session

                            Enrolled

                         House Bill 3609

Sponsored by Representative OLSON, Senator MORSE; Representatives
  BRUUN, CAMERON, FREEMAN, GILLIAM, HANNA, HUFFMAN, JENSON,
  KENNEMER, KRIEGER, MAURER, RICHARDSON, THOMPSON, WEIDNER,
  WINGARD (Presession filed.)

                     CHAPTER ................

                             AN ACT

Relating to enterprise zones; creating new provisions; amending
  ORS 285C.105, 285C.200, 285C.210, 285C.225, 285C.230, 285C.235
  and 285C.240; and prescribing an effective date.

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

  SECTION 1.  { + Section 2 of this 2010 Act is added to and made
a part of ORS 285C.050 to 285C.250. + }
  SECTION 2.  { + For purposes of ORS 285C.200 (3):
  (1) When the conditions specified in subsection (2) of this
section exist, the sponsor of an enterprise zone may:
  (a) Specify a minimum number of employees that an authorized
business firm must maintain throughout the exemption period that
is less than the employment requirements of ORS 285C.200 (1)(c);
and
  (b) Extend the period of time for which the qualified property
of the authorized business firm may continue to be exempt from
taxation under ORS 285C.175, not to exceed two additional tax
years.
  (2) The zone sponsor may take the actions specified in
subsection (1) of this section when the following conditions
exist:
  (a) There has been a decline for two or more consecutive
quarters in the last 12 months in seasonally adjusted nonfarm
payroll employment; and
  (b) The unemployment rate of the county in which the enterprise
zone is located is at least two percentage points greater than
the comparable unemployment rate for this state, as defined by
the most recently available data published or officially provided
and verified by the United States Government or the Employment
Department.
  (3) When the zone sponsor has taken the actions specified in
subsection (1) of this section, the authorized business firm may
not file a claim for exemption under ORS 285C.175 unless it
otherwise meets all of the requirements of ORS 285C.200 (1) for
any tax year during the exemption period as extended under
subsection (1)(b) of this section.
  (4) The actions of the zone sponsor under subsection (1) of
this section must be set forth in a resolution adopted by the
governing body of the sponsor within 60 days of taking the
actions. A resolution adopted under this subsection may be

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revoked or modified at the request of the zone sponsor at any
time during the exemption period as extended under subsection
(1)(b) of this section.
  (5) An eligible business firm authorized under ORS 285C.140
does not lose its status as an authorized business firm solely
because the zone sponsor has taken the actions specified in
subsection (1) of this section. + }
  SECTION 3. ORS 285C.200 is amended to read:
  285C.200. (1) The qualified property of an authorized business
firm may be exempt from property taxation under ORS 285C.175 only
if the firm meets the following qualifications:
  (a) The firm is an eligible business firm engaged in eligible
business operations under ORS 285C.135 that are located inside
the enterprise zone;
  (b) The firm owns or leases qualified property that is located
inside the enterprise zone;
  (c) The employment of the firm, no later than the date the
exemption is claimed under ORS 285C.220 or April 1 following the
year in which the investment in qualified property is made,
whichever is earlier, is not less than the greater of:
  (A) 110 percent of the annual average employment of the firm;
or
  (B) The annual average employment of the firm plus one
employee;
  (d) The firm does not diminish employment outside the
enterprise zone as described in subsections   { - (4) and - }
(5)  { + and (6) + } of this section;
  (e) The firm does not substantially curtail operations within
the enterprise zone as described in ORS 285C.210; and
  (f) The firm complies in all material respects with local,
Oregon and federal laws applicable to the firm's operations
inside the enterprise zone since the application for
authorization and throughout the period of exemption, as
prescribed by rule.
  (2) Notwithstanding subsection (1)(c) or (e) of this section,
an eligible business firm may meet the qualifications of this
section if the firm has satisfied the following requirements:
  (a) The firm is authorized subject to ORS 285C.155 and the firm
satisfies those requirements; and
  (b)(A) The firm completes an investment of $25 million or more
in qualified property; or
  (B) The firm fulfills the requirements of ORS 285C.205 and the
employment of the firm does not decrease below the annual average
employment of the firm.
   { +  (3) Notwithstanding subsection (1)(c) or (e) or (2) of
this section, an eligible business firm is a qualified business
firm under this section if:
  (a) The firm is authorized under ORS 285C.140;
  (b) The zone sponsor has taken the actions and the firm has
satisfied the requirements specified in section 2 of this 2010
Act; and
  (c) The firm completes an investment of $4 million or more in
qualified property if it is in a rural enterprise zone or $8
million or more in qualified property if it is in an urban
enterprise zone. + }
    { - (3) - }   { + (4) + } An authorized business firm that
engages in both eligible and ineligible operations in an
enterprise zone and is an eligible business firm because of ORS
285C.135 (3) meets the qualifications of this section if:

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  (a) The eligible operations of the firm under ORS 285C.135 meet
the qualifications of this section; and
  (b) The employees of the firm work a majority of their time in
eligible operations within the enterprise zone.
    { - (4) - }   { + (5) + } A business firm does not meet the
qualifications of this section if the firm or any other firm
under common control closes or permanently curtails operations in
another part of the state more than 30 miles from the nearest
boundary of the enterprise zone in which the firm seeks a
property tax exemption.  This subsection applies to the transfer
of any of the business firm's operations to an enterprise zone
from another part of the state, if the closure or permanent
curtailment in the other part of the state diminished employment
in the county and more local labor markets after authorization
and on or before December 31 of the first tax year for which any
qualified property of the firm in that zone would otherwise be
exempt under ORS 285C.175.
    { - (5) - }  { +  (6) + } An authorized business firm that
moves any of its employees from a site or sites within 30 miles
from the nearest boundary of the enterprise zone after
authorization may meet the qualifications under this section if
the employment of the firm has been increased within the zone and
at the site or sites from which the employees were transferred,
no later than April 1 preceding the first tax year for which
qualified property of the firm is exempt under ORS 285C.175, to
not less than 110 percent of the annual average employment of the
firm within the zone and the site or sites from which the
employees were transferred, calculated over the 12 months
preceding the date of application for authorization.
    { - (6) - }  { +  (7) + } For purposes of subsection (1)(f)
of this section, the Oregon Business Development Department shall
adopt rules that define the effect of noncompliance on an
eligible business firm's continuing exemption in an enterprise
zone and that indicate what is necessary to establish the
noncompliance in terms of materiality of the relevant violation,
the finality of applicable legal or regulatory proceedings and
judgments involving the firm, the failure by the firm to perform
or submit to remedial or curative actions and similar factors.
    { - (7) - }  { +  (8) + } As used in this section:
  (a) 'Annual average employment of the firm' means the average
employment of the firm, calculated over the 12 months preceding
the date of application for authorization.
  (b) Except as provided in subsection   { - (5) - }
 { + (6) + } of this section, 'employment of the firm' means:
  (A) The number of employees working for the firm a majority of
their time in eligible operations at locations within the
enterprise zone; or
  (B) In the case of a firm described in ORS 285C.135 (5)(b), the
number of employees working a majority of their time at the
facility in the enterprise zone for which authorization was
obtained.
  SECTION 4. ORS 285C.105 is amended to read:
  285C.105. (1) The sponsor of an enterprise zone shall:
  (a) Appoint a local zone manager. Upon appointment of the local
zone manager, the sponsor shall provide written notice thereof to
the Oregon Business Development Department, the county assessor
and the Department of Revenue.
  (b) Provide enhanced local public services, local incentives
and local regulatory flexibility included in the application for
designation of the enterprise zone or in the resolution under ORS

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285C.115 (7) to authorized or qualified business firms and assist
authorized or qualified business firms in using enhanced local
public services, local incentives and local regulatory
flexibility.
  (c) Review and approve or deny applications for authorization
under ORS 285C.140.
  (d) Assist the county assessor in administering the property
tax exemption and in performing other duties assigned to the
assessor under ORS 285C.050 to 285C.250.
  (e) Maintain, implement and periodically update a plan for
marketing the enterprise zone including strategies for retention,
expansion, start-up and recruitment of eligible business firms.
  (f) Manage the enterprise zone in accordance with ORS 285C.050
to 285C.250.
  (g) Identify property available for sale or lease to eligible
business firms under ORS 285C.110.
  (h) Prepare indices of street addresses, tax lot numbers or
other information to facilitate the identification of land inside
of an urban enterprise zone.
  (i) Provide written notice to the county assessor, the
Department of Revenue, the Oregon Business Development Department
and any relevant publicly funded job training provider of the
conditions and policies adopted or normally sought by the sponsor
under ORS 285C.150, 285C.155 or 285C.160  { + or section 2 of
this 2010 Act, + } and take the actions necessary to implement
and enforce the conditions and policies and any other reasonable
requirements imposed pursuant to ORS 285C.155 or 285C.160 { +  or
section 2 of this 2010 Act + }.
  (j) Conduct, or assist in conducting, annual reporting of
enterprise zone activity or effort, if requested by the county
assessor or the Oregon Business Development Department.
  (2) If more than one city, county or port sponsors an
enterprise zone, the jurisdictions shall act jointly in
performing the duties imposed on a sponsor under ORS 285C.050 to
285C.250.
  SECTION 5. ORS 285C.210 is amended to read:
  285C.210. (1) For purposes of ORS 285C.175, 285C.200 and
285C.240, operations of a business firm are substantially
curtailed when:
  (a) The number of employees of the firm within the enterprise
zone is reduced by more than 85 percent from the highest number
of employees of the firm within the enterprise zone;
  (b) The number of employees of a firm within the enterprise
zone has been reduced by more than 50 percent from the highest
number of employees of the firm within the enterprise zone for a
period of time that is equal to or more than nine months; or
  (c) The annual average number of employees within the
enterprise zone during the first assessment year for which the
exemption under ORS 285C.175 is granted, or any subsequent year
in which an exemption is claimed, is reduced below the greater
of:
  (A) The annual average number of employees of the business firm
within the enterprise zone, averaged over the 12 months preceding
the date of the application for authorization, plus one employee;
or
  (B) 110 percent of the annual average number of employees of
the firm within the enterprise zone, averaged over the 12 months
preceding the date of the application for authorization.
  (2) For the purposes of this section:

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  (a) The number of employees of a firm within the enterprise
zone is the employment of the firm, as defined in ORS 285C.200,
on the earlier of the date a claim for exemption is filed under
ORS 285C.220 or April 1, of each assessment year for which an
exemption under ORS 285C.175 is claimed, and for the year
immediately following the last assessment year for which an
exemption is claimed.
  (b) Except as specified in subsection (1)(c) of this section,
the annual average number of employees of the firm is the number
of firm employees within the enterprise zone averaged over each
assessment year in which an exemption under ORS 285C.175 is
allowed, using employment figures for no fewer than four
equivalent periods during the year.
  (c) For the first assessment year for which an authorized
business firm that qualifies under ORS 285C.200   { - (5) - }
 { + (6) + } claims an exemption under ORS 285C.175, substantial
curtailment under subsection (1)(a) or (c) of this section shall
be determined by:
  (A) Combining the number of employees of the firm within the
enterprise zone and the number of employees at all other sites of
the firm within the area described in ORS 285C.200   { - (5) - }
 { +  (6) + }; and
  (B) Combining the annual average number of employees of the
firm within the enterprise zone with the annual average number of
employees at any other site of the firm from which employees were
transferred into the enterprise zone.
   { +  (3) Notwithstanding subsections (1) and (2) of this
section, it is not a substantial curtailment of operations of a
business firm for purposes of ORS 285C.175, 285C.200 and 285C.240
if the sponsor of an enterprise zone has taken the actions and
the firm has satisfied the requirements specified in section 2 of
this 2010 Act. + }
  SECTION 6. ORS 285C.225 is amended to read:
  285C.225. (1) An exemption claim filed under ORS 285C.220 must,
when applicable, include a sponsor's addendum setting forth any
information required by the sponsor of the enterprise zone
pursuant to ORS 285C.140 (5), 285C.150, 285C.155 or 285C.160 { +
or section 2 of this 2010 Act + }.
  (2) For the first tax year for which qualified property is
exempt under ORS 285C.175, the claim filed under ORS 285C.220
must include a property schedule listing the qualified property.
  (3)(a) The business firm is required to include the property
schedule described in subsection (2) of this section with a claim
filed under ORS 285C.220 only once for any item of qualified
property. The firm shall include additional property schedules
with subsequent claims in order to claim exemption of additional
qualified property that is pursuant to the same application for
authorization.
  (b) The firm may not file an additional property schedule to
claim an exemption for additional qualified property for a tax
year that is more than two years after the first tax year for
which any qualified property of the firm was exempt under ORS
285C.175, except pursuant to another authorization application.
  (4) The property schedule shall be set forth on a form
prescribed by the Department of Revenue and shall contain:
  (a) A list of all qualified property that satisfies all
requirements for exemption under ORS 285C.175 for the tax year
for which the exemption is being claimed and that has not been
exempt under ORS 285C.175 for a previous tax year;

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  (b) For each item of property described in paragraph (a) of
this subsection, the cost of the property and the date the
property was placed in service;
  (c) Any information needed to determine compliance with any
applicable requirements under ORS 285C.180, 285C.185 or 285C.190;
  (d) In the case of qualified property that is leased by the
business firm, a signature on the property schedule or other
evidence that the enterprise zone exemption is acknowledged by
the owner of the leased property; and
  (e) Any other information required by the Department of
Revenue.
  (5) The county assessor may allow the business firm to amend
the property schedule to include any other item of qualified
property described in subsection (2) of this section that was not
listed on the original property schedule included in the claim
filed for the assessment year. An amendment to the property
schedule may not be made after June 1 of the assessment year.
  SECTION 7. ORS 285C.230 is amended to read:
  285C.230. (1) In granting or denying an exemption under ORS
285C.175, the county assessor may:
  (a) Reasonably rely on information set forth in the exemption
claim filed under ORS 285C.220; and
  (b) Request and be given assistance from the sponsor before
making certain determinations, including but not limited to:
  (A) Determining if the exemption is being claimed by a
qualified business firm under ORS 285C.200;
  (B) Determining the extent to which qualified property is used
by persons other than the qualified business firm or is used for
business activities that may not be conducted in an enterprise
zone by an eligible business firm under ORS 285C.135; or
  (C) Determining if the use, leasing or location of qualified
property satisfies applicable requirements under ORS 285C.180,
285C.185 or 285C.190.
  (2) The county assessor is not responsible for determining if
the firm has satisfied any requirement established by the sponsor
under ORS 285C.140, 285C.150, 285C.155, 285C.160 or 285C.205 { +
or section 2 of this 2010 Act + }.
  (3) If a business firm fails to timely file an exemption claim
under ORS 285C.220:
  (a) The assessor or the sponsor may use the authority granted
to the assessor under ORS 285C.235; or
  (b) The assessor may deny the exemption under ORS 285C.175 for
the current tax year or for any future tax year for which the
property would otherwise qualify for exemption under ORS
285C.175.
  (4) If the sponsor or the assessor has reason to question the
accuracy or veracity of any information contained in a claim
filed under ORS 285C.220, the sponsor or the assessor may use the
authority provided under ORS 285C.235.
  (5) If any information submitted by a business firm under ORS
285C.220 indicates that the firm is no longer in compliance with
any requirements that apply to the firm or the qualified property
of the firm, the information shall be considered notice for
purposes of ORS 285C.240.
  (6) The county assessor shall make reasonable and timely
efforts to notify an authorized business firm that is seeking or
receiving an exemption under ORS 285C.175 of the filing
requirements under ORS 285C.220, but the county assessor and the
Department of Revenue are not under any obligation other than as
otherwise provided in ORS 285C.050 to 285C.250 to seek or receive

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information about the continued entitlement of property to an
exemption under ORS 285C.175.
  (7) The sponsor is primarily responsible for assisting a
business firm in timely filing claims under ORS 285C.220. If the
sponsor, or a local zone manager designated by the sponsor, does
not receive a copy of the claim as required under ORS 285C.220 by
the time the claim is required to be filed under ORS 285C.220,
the sponsor or manager shall immediately contact the assessor for
taking action under subsection (3) of this section.
  SECTION 8. ORS 285C.235 is amended to read:
  285C.235. (1) The county assessor is at all times authorized to
demand reports by registered or certified mail from owners or
lessees of qualified property concerning the use of the qualified
property and the employment status of the qualified business firm
for purposes of ORS 285C.050 to 285C.250. If, after 60 days'
notice in writing by registered or certified mail, the owner or
lessee fails to comply with this demand, the assessor may
disqualify the property under ORS 285C.240, giving written notice
of the disqualification to the Department of Revenue and the
owner or lessee of the qualified property.
  (2) The assessor is under no obligation to verify compliance by
a qualified business firm with requirements imposed on the firm
by the sponsor under ORS 285C.150, 285C.155, 285C.160 or 285C.205
 { +  or section 2 of this 2010 Act + }.
  (3) The sponsor of an enterprise zone may initiate procedures
in order to verify compliance by qualified business firms with
requirements imposed under ORS 285C.050 to 285C.250. The
procedures may include written requests to the assessor by the
local zone manager or an executive official of the sponsor that
the assessor exercise authority under this section for a
particular qualified business firm.
  SECTION 9. ORS 285C.240 is amended to read:
  285C.240. (1) The county assessor of any county in which an
enterprise zone is situated or the sponsor shall be notified in
writing by the qualified business firm or by the owner of the
qualified property leased by the qualified business firm not
later than July 1 following the assessment year for which the
exemption is claimed and in which one of the following events
occurs:
  (a) Property granted exemption from taxation under ORS 285C.175
is sold, exchanged, transported or otherwise disposed of for use
outside the enterprise zone or for use by an ineligible business
firm;
  (b) The qualified business firm closes or so reduces eligible
operations that the reduction constitutes a substantial
curtailment of operations under ORS 285C.210, unless a
substantial curtailment of operations is permitted under ORS
285C.200 (2);
  (c) The qualified business firm fails to meet any of the
qualifications required under ORS 285C.200;
  (d) The qualified business firm fails to meet any condition
that the firm is required to satisfy under ORS 285C.150, 285C.155
or 285C.205 { +  or section 2 of this 2010 Act + } or any term of
an agreement entered into with the sponsor under ORS 285C.160
with which the firm had agreed to comply;
  (e) The qualified business firm uses the property to conduct
activities in the enterprise zone that are not eligible
activities; or

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  (f) Property of the qualified business firm for which exemption
under ORS 285C.175 is claimed ceases to be qualified property
under ORS 285C.180.
  (2) If the sponsor receives written notice under subsection (1)
of this section, the sponsor shall immediately send a copy of the
notice to the county assessor of the county in which the
enterprise zone is situated.
  (3)(a) When an assessor receives written notice under
subsection (1) or (2) of this section, the assessor shall
disqualify the property for the assessment year following the
disqualifying event and 100 percent of the additional taxes
calculated under ORS 285C.175 shall be assessed against the
property for each year for which the property had been granted
exemption under ORS 285C.175.
  (b) Notwithstanding paragraph (a) of this subsection, if a
qualified business firm fails to meet any of the requirements of
an agreement entered into by the firm under ORS 285C.160 during
the exemption, but meets all other applicable requirements under
ORS 285C.050 to 285C.250 during the first three years of the
exemption, the qualified property of the firm may not be
disqualified during the first three years of exemption for
failure to comply with the requirements of the agreement entered
into under ORS 285C.160.
  (c) The additional taxes assessed under this subsection shall
be reduced by the amount, if any, paid by the qualified business
firm to the sponsor under subsection (6) of this section for the
same property.
  (4) If the qualified business firm or owner fails to give the
notice on time or at all as required by subsection (1) of this
section, upon discovering the property no longer qualifies for
the exemption due to a circumstance described in subsection (1)
of this section, the assessor shall:
  (a) Disqualify the property from exemption;
  (b) Compute the amount of taxes described in subsection (3) of
this section as though notice had been given, and add to that
amount an additional penalty equal to 20 percent of the total
amount so computed; and
  (c) Add the property to the assessment and tax roll without the
exemption as if the notice had been given.
  (5) The amount determined to be due under subsections (3) and
(4) of this section:
  (a) May be paid to the tax collector before completion of the
next general property tax roll pursuant to ORS 311.370; and
  (b) Shall be added to the tax extended against the property on
the next general property tax roll to be collected and
distributed in the same manner as the remainder of the property
taxes.
  (6)(a) Notwithstanding subsections (3) and (5) of this section,
if an assessor or sponsor receives notice from a business firm
under subsection (1)(b), (c) or (d) of this section and the
qualified business firm has not closed its operations, the
qualified business firm shall pay the sponsor an amount equal to
the property taxes for the qualified property in the assessment
year for which the exemption is claimed in lieu of the amounts
otherwise due under subsection (3) of this section.
  (b) Moneys collected under paragraph (a) of this subsection
shall be used by the sponsor to benefit the residents of the
enterprise zone and for the development of jobs, skills and
training for residents of the enterprise zone and the zone's
immediate vicinity.

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  (c) This subsection applies only to the first notice given by
the business firm under subsection (1)(b), (c) or (d) of this
section.
  (d) If the sponsor does not receive the full amount to be paid
by the qualified business firm under paragraph (a) of this
subsection, the assessor shall disqualify the property and impose
the entire amount of additional taxes as prescribed under
subsection (3) of this section.
  (7) An assessor may not disqualify property under this section
for failure by a qualified business firm or an owner of qualified
property leased by the qualified business firm to notify the
assessor or the enterprise zone sponsor that the qualified
business firm does not meet requirements under ORS 285C.150,
285C.155, 285C.160 or 285C.205, without having received written
communication from the sponsor that demonstrates that the
qualified business firm does not meet the requirements.
  (8) Additional taxes collected under this section shall be
deemed to have been imposed in the year to which the additional
taxes relate.
  (9) If property is disqualified from exemption under this
section, the assessor shall notify the qualified business firm,
and the owner of any qualified property that is leased by the
firm, of the disqualification. The notification shall be made in
writing. The assessor shall provide copies of the
disqualification to the sponsor, the Department of Revenue and
the Oregon Business Development Department. The decision of the
assessor to disqualify property under this section may be
appealed to the Oregon Tax Court under ORS 305.404 to 305.560.
  SECTION 10.  { + Section 2 of this 2010 Act and the amendments
to ORS 285C.105, 285C.200, 285C.210, 285C.225, 285C.230, 285C.235
and 285C.240 by sections 3 to 9 of this 2010 Act apply to
property tax years beginning on or after July 1, 2009. + }
  SECTION 11.  { + This 2010 Act takes effect on the 91st day
after the date on which the special session of the Seventy-fifth
Legislative Assembly adjourns sine die. + }
                         ----------

Passed by House February 17, 2010

Repassed by House February 23, 2010

      ...........................................................
                                             Chief Clerk of House

      ...........................................................
                                                 Speaker of House

Passed by Senate February 22, 2010

      ...........................................................
                                              President of Senate

Enrolled House Bill 3609 (HB 3609-A)                       Page 9

Received by Governor:

......M.,............., 2010

Approved:

......M.,............., 2010

      ...........................................................
                                                         Governor

Filed in Office of Secretary of State:

......M.,............., 2010

      ...........................................................
                                               Secretary of State

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