OAR 123-650-9500: Business Tax Abatements and Zone Termination

In relation to OAR 123-650-9100(1) when an enterprise zone terminates: (1) This rule defines the effect for exemptions on business property under: (a) ORS 285C.175 consistent with OAR 123-674 for standard enterprise zone tax abatement (hereinafter “SEZ”); or (b) ORS 285C.409(1) consistent with OAR 123-690 for long-term rural enterprise zone facility tax abatements (hereinafter “LRZ”). (2) Regardless of the reason for termination, if the enterprise zone still exists on January 1 of an exemption year: (a)(A) An SEZ exemption on qualified property in that year shall continue as it otherwise would for the remainder of that exemption period; and (B) The qualified business firm may claim exemption(s) on additional property, as otherwise allowed under ORS 285C.255(3), pursuant to the same authorization under ORS 285.140; and (b) Any exemption on an LRZ facility in that year shall continue as it otherwise would until the final year under ORS 285C.409(1)(c), as provided under ORS 285C.403(4)(a). (3) Regardless of the reason for termination, in the case of any approved, outstanding application for authorization under ORS 285C.140 or for certification under ORS 285C.403: (a) The authorized business firm shall receive SEZ exemption(s) consistent with subsection (2)(a) of this rule as it otherwise would, provided that: (A) The authorization was still active under ORS 285C.165 according to OAR 123-674-3700, as of the effective date of the enterprise zone’s termination; (B) Proposed investments pursuant to the application are completed consistent with OAR 123-650-9700; and (C) The authorization has not expired because an exemption is not successfully claimed on qualified property for a year beginning on January 1 not more than: (i) Two full calendar years after termination; or (ii) Three full calendar years after termination if the total cost of qualified property by that year equals or exceeds $25 million. (b) The certified business firm shall receive an LRZ exemption consistent with subsection (2)(b) of this rule as it otherwise would, provided that: (A) Proposed investments pursuant to the application are completed consistent with OAR 123-650-9700; and (B) The certification has not expired because an exemption is not successfully claimed on facility property for a year beginning on January 1 not more than three full calendar years after termination. (4) For an enterprise zone Terminated-by-Statute or subject to early termination (but not programmatic sunset): (a)(A) If the zone sponsor or county assessor receives an application for authorization or certification before the effective date of termination, they may approve the application as normally allowed under ORS 285C.140 or 285C.403 after the zone’s termination; (B) Though, for purposes of LRZ certification, the agreement under ORS 285C.403(4) must have been executed, even if not yet in effect, before the date of the zone’s termination; (b) Approval must precede January 1 at the beginning of the SEZ or LRZ exemption period; and (c) An authorized or certified business firm shall receive SEZ or LRZ exemption as it otherwise would subject to satisfying paragraphs (3)(a)(B) and (C) or subsection (3)(b) of this rule. (5) Except as allowed under ORS 285C.245(6) or (8), consistent with OAR 123-650-9600(1), in the case of a business firm that is also qualified or approved in the terminated enterprise zone according to section (2) or (3) of this rule under another authorization or certification: (a) A business firm described in section (4) may not reapply or be reapproved; and (b) An application for authorization or certification received after the zone’s termination may not be accepted or approved for an SEZ or LRZ exemption. (6) A year of exemption on qualified property under ORS 285C.170 (construction in process) is unaffected by the zone’s termination on or after January 1 of that year, whatever the reason, but no such exemption is allowed in any further year. (7) For purposes of programmatic sunset of all enterprise zones: (a) The following are unaffected: (A) Ongoing use of exemptions from property taxes or any approval in a terminated zone consistent with subsection (2) or (3) of this rule; or (B) Continuing use of OAR 123-650-9600 under ORS 285C.245(6) or (8) in a previously terminated zone. (b) In the case of unapproved applications for authorization or certification received by the zone sponsor before the effective date of termination: (A) The zone sponsor may not accept any such application after June 29, 2032; (B) The application must be fully approved no later than June 30, 2032, in full compliance with provisions under ORS 285C.140 or 285C.403, including but not limited to any agreement under ORS 285C.160: (i) Even if the zone had terminated previously; and (ii) Pursuant to a preauthorization conference under ORS 285C.140(4) and (5) that is summarily dispensed with, as necessary; (C) Approval in paragraph (B) of this subsection is then covered by section (3) of this rule; and (D) If an application is not approved in accordance with this subsection, then the business firm is not authorized or certified, and the sponsor or county assessor shall have effectively failed or refused to authorize or certify the firm under ORS 285C.140(9) or 285C.403(7) unless doing so was infeasible. (8) Notwithstanding ORS 285C.115(2)(b), a business firm that has the site of its exempt property or proposed investment in an enterprise removed by a boundary change (whether inadvertently or not) has the same rights and privileges in sections (2) to (6) of this rule based on the effective date of the boundary change, as if the zone had terminated.