123-656-0001
Purpose and Scope

This division of administrative rules addresses the existence of enterprise zones in addition to OAR 123-650, as provided under:

(1) ORS 285C.300 to 285C.320 respective to Oregon-based Tribes; and

(2) ORS 285C.085 based on special federal designations.

Statutory/Other Authority: ORS 285A.075 & 285C.060(1)
Statutes/Other Implemented: ORS 285C.085 & 285C.300 – 285C.320
History:
OBDD 10-2017, amend filed 11/29/2017, effective 11/29/2017
OBDD 14-2015, f. & cert. ef. 11-12-15
OBDD 24-2010, f. & cert. ef. 6-14-10

123-656-0100
Definitions

OAR 123-001 (Procedural Rules) and 123-650 define terms used in this division of administrative rules. In addition:

(1) As used in ORS 285C.085(4)(b), “all areas within both the federal enterprise zone and the city, county or port are included in a state enterprise zone” means that the state enterprise zone will need to encompass all of the Federal Enterprise Zone inside the territory of any city, port or county that will sponsor the zone. This is true regardless that such territory is also inside an overlapping city, port or county that neither sponsors nor consents to the zone, in that not every city, port or county needs to sponsor or consent as required under ORS 285C.065, 285C.066 or 285C.068, but other jurisdictions may formally consent to include parts of the Federal Enterprise Zone that are outside sponsor territory in the state enterprise zone consistent with OAR 123-650-0500.

(2) As used in these administrative rules, unless the context demands otherwise:

(a) Federal Enterprise Zone is a designation by an agency of the U.S. government that is:

(A) Not terminated;

(B) Located at least partially in this state;

(C) Delimited by formal boundaries and an established period of existence lasting five or more years;

(D) Intended at least in part to create or improve economic opportunities and development within the local community;

(E) Provided for by federal law that includes congressionally authorized benefits for purposes of paragraph (D) of this subsection;

(F) Qualified based on federal guidelines, including but not limited to criteria for a level of economic hardship generally comparable to that indicated under ORS 285C.090; and

(G) For example, comparable historically to federal Renewal Communities, Empowerment Zones or Opportunity Zones.

(b) RENZ means a reservation enterprise zone under ORS 285C.306(2).

(c) RPRZ means a reservation partnership zone under ORS 285C.306(3).

(d) Tribe means one of the federally recognized Indian tribes in Oregon listed under ORS 285C.306(1).

Statutory/Other Authority: ORS 285A.075 & 285C.060(1)
Statutes/Other Implemented: ORS 285C.050, 285C.085 & 285C.300 – 285C.320
History:
OBDD 11-2020, amend filed 08/12/2020, effective 08/12/2020
OBDD 10-2017, amend filed 11/29/2017, effective 11/29/2017
OBDD 14-2015, f. & cert. ef. 11-12-15
OBDD 24-2010, f. & cert. ef. 6-14-10

123-656-1000
TRIBAL ZONES — Applicability of Regular Parameters

For purposes of RENZs and RPRZs:

(1) Their creation does not depend on any measure of local economic hardship or on consultation with local taxing districts.

(2) They do not need to satisfy the following requirements in OAR 123-650, except pursuant to a boundary change under ORS 285C.115(3), including but not limited to:

(a) Maximum distances overall or between an RENZ’s separate areas; or

(b) General co-sponsorship or consent by applicable city, port or county governments as described in OAR 123-650-0500.

(3) Each may have total area within its boundary of up to but not more than 12 square miles, for which:

(a) An RENZ shall conform to OAR 123-650-1000(3), but it may include separate, noncontiguous areas anywhere in this state.

(b) The cosponsors of an RPRZ shall determine how to define, map and describe the zone’s area, which however, must be contiguous.

(4) Either may designate itself for electronic commerce status under ORS 285C.095 (see OAR 123-662).

(5) The zone sponsor shall fulfill the duties incumbent on it under ORS 285C.105 or elsewhere in ORS chapter 285C, including but not limited to those addressed in OAR 123-668.

(6) They are invariably ‘rural’ enterprise zones:

(a) Even if entirely or partially inside a regional or metropolitan urban growth boundary, notwithstanding OAR 123-650-0700.

(b) For purposes of the standard exemption under ORS 285C.175 (see OAR 123-674) and long-term tax incentives under ORS 285C.409 and 317.124 (see OAR 123-690), regardless of where any part of the zone exists, but:

(A) The facility must nevertheless be in an applicable county for the long-term tax incentives; and

(B) Neither an RENZ (designated after 2003) nor an RPRZ sponsor may elect or allow a hotel, motel or destination resort business to be eligible for the standard exemption.

(7) They are not subject to premature termination by order of the Director under ORS 285C.245(3) to (5) or to programmatic sunset under ORS 285C.255.

Statutory/Other Authority: ORS 285A.075 & 285C.060(1)
Statutes/Other Implemented: ORS 285C.050 – 285C.250, 285C.255, 285C.300 – 285C.320 & 285C.400 – 285C.420
History:
OBDD 10-2017, amend filed 11/29/2017, effective 11/29/2017
OBDD 14-2015, f. & cert. ef. 11-12-15
OBDD 24-2010, f. & cert. ef. 6-14-10

123-656-1200
Reservation Enterprise Zone Designations

For purposes of RENZs, consistent with OAR 123-656-1000:

(1) To apply for designation of an RENZ, the Tribe shall furnish the Department with the following:

(a) A copy of the resolution requesting designation, as duly adopted by the Tribe’s governing body within the past six months;

(b) Map and so forth as applicable in accordance with OAR 123-650-1500;

(c) A formal statement or evidence to the effect that the proposed zone area contains only such land of the Tribe under ORS 285C.306(2)(b) – that is, the following based on current laws, authority or treaties with the U.S. government:

(A) Land held in trust;

(B) Land officially pending trust status;

(C) Any on-reservation area; or

(D) Any combination of these; and

(d) As necessary or appropriate:

(A) Copies of federal documents attesting to relevant status; and

(B) A map of the zone showing and labeling the respective nature of the tribal lands comprising the designated area.

(2) Subject to the accuracy and completeness of materials provided in section (1) of this rule, the Department shall approve the designation to take effect as early as when either the Department received a complete application or the Tribe’s governing body adopted its resolution, depending on the preference of the Tribe and determination of the Department.

(3) At any one time, the Department may not approve more than one RENZ respective to each Tribe or effectively no more than nine RENZs in total.

(4) In conformance with sections (1) and (2) of this rule, the Tribe may seek to have the RENZ:

(a) Amended through a boundary change at any time without triggering provisions under ORS 285C.115(3) consistent with OAR 123-656-1000(2).

(b) Re-designated concurrent with or after the July-1 date once the RENZ has Terminated-by-Statute under ORS 285C.245(6).

(5) An RENZ may not include area inside any other existing enterprise zone.

Statutory/Other Authority: ORS 285A.075 & 285C.060(1)
Statutes/Other Implemented: ORS 285C.306
History:
OBDD 14-2015, f. & cert. ef. 11-12-15
OBDD 24-2010, f. & cert. ef. 6-14-10

123-656-1400
Reservation Partnership Zone Co-sponsorships

For purposes of RPRZs, consistent with OAR 123-656-1000 and pursuant to a co-sponsorship agreement:

(1) The zone’s effective beginning, equivalent to designation, is the execution of the agreement or a specified, later date in the agreement.

(2) The agreement shall be between a single Tribe and at least one or more cities, ports or counties, but it may include only one or two such local governments, in terms of their jurisdictional territory inside the RPRZ, regardless of provisions for joint sponsorship or consent by any other such government under ORS 285C.065, 285C.066 or 285C.068.

(3) The RPRZ shall consist of contiguous area inside the jurisdictional territory of its city, port or county cosponsor(s), and such area may also be (but does not need to be) land of the Tribe under ORS 285C.306(2)(b)(A) or (C) or both.

(4) The Tribe and any cosponsoring city, port and county are the “zone sponsor” of the RPRZ, and their agreement shall contain appropriate and necessary provisions under ORS 190.110, regarding their mutual and respective roles and responsibility as the zone sponsor including but not limited to provisions under ORS 285C.105. Any other party to the agreement as allowed under ORS 190.110 would not be part of the zone sponsor.

(5) The zone sponsor of the RPRZ is urged in the process of executing the co-sponsorship agreement to:

(a) Consult with other cities, ports or counties that have territory in the zone;

(b) Communicate with other local taxing districts that have territory in the zone; and

(c) Formally apprize the Department of its existence, area and sponsorship.

(6) With respect to altering the RPRZ, the zone sponsor may mutually amend the agreement to add or remove contiguous land as described in section (3) of this rule at any time without triggering provisions under ORS 285C.115(3) consistent with OAR 123-662-1000(2).

(7) With respect to RPRZ termination:

(a) The agreement shall recognize that the zone does terminate by operation of law (is Terminated-by-Statute) under ORS 285C.245(6) after June 30 immediately following 10 years since the effective date of its beginning, and the term of the agreement shall be for at least that long.

(b) It may occur sooner due to the effective dissolution of the agreement by mutual consent of its parties. In the event of such dissolution, any business firm shall enjoy the same protection under relevant provisions of law and this chapter of administrative rules for location in a terminated enterprise zone.

(c) The Tribe and city, port or county may create a new RPRZ pursuant to or in replacement of a terminated one, based on a newly executed co-sponsorship agreement consistent with this rule.

(8) There is no particular limit on the number of RPRZs that may exist statewide, or that any city, port, county or Tribe may cosponsor. A city, port or county cosponsor of an RPRZ may also sponsor another enterprise zone, and as originally cosponsored, an RPRZ may contain area of an existing regular enterprise zone (other than an RENZ or another RPRZ), which shall remove or exclude the RPRZ area with the earlier of its next boundary change or re-designation.

Statutory/Other Authority: ORS 285A.075 & 285C.060(1)
Statutes/Other Implemented: ORS 285C.105 & 285C.306
History:
OBDD 14-2015, f. & cert. ef. 11-12-15
OBDD 24-2010, f. & cert. ef. 6-14-10

123-656-1600
Tribal Credit against State Income Taxes

For purposes of the standard credit under ORS 315.506 to offset state personal or corporate income/excise tax liabilities based on tribal taxes incurred or paid to the Tribe for an applicable business facility in any RENZ or RPRZ:

(1) It is available to a business engaged in any type of income-furthering activity, other than leasing the facility to tenants, irrespective of receipt or qualification for any other enterprise-zone tax abatement by the business or the facility.

(2) The business must have acquired the facility (by purchase or lease) or completed its construction, erection or installation, only since January 1, 2002. In addition, for a previously existing facility:

(a) If located on the Tribe’s reservation, the business operations need to be significantly different from and not in any way the continuation of what was undertaken at the facility before its latest acquisition; and

(b) The facility, for purposes of applicable tribal property taxes, comprises new investments (completed and placed in service since January 1, 2002) only to the extent that they effectively enlarged or extended the ability of the business to generate revenue at the facility, as opposed to existing property or the replacement of existing property.

(3) The credit (for which any unused amounts may not be carried forward) equals:

(a) The total amount of tribal taxes under ORS 285C.300 incurred or paid by the business in or respective to the first income/excise tax year, in which it operates in the RENZ or RPRZ; or

(b) For any other tax year, only the annual property taxes imposed by the Tribe on facility property consistent with section (2) of this rule.

(4) An applicable tribal property tax for purposes of section (3) of this rule shall be:

(a) Levied in an area encompassing an entire district, in which multiple businesses might generally develop and operate, and throughout which the Tribe has authority to impose and collect such a tax on non-Indian businesses, regardless of the area’s general correspondence to or coverage by the RENZ or RPRZ;

(b) Computed based on a rate or schedule of rates multiplied by the valuation of certain types of tangible property in the area of taxation, even if the methods, definitions and so forth differ from ad valorem taxation under state law; and

(c) Uniformly assessed and imposed on any non-Indian business, as well as Indian enterprises if they too are subject to the same tax and not exempt in any way due to location in the RENZ or RPRZ.

(5) To claim the tax credit, the business/taxpayer shall fill out the latest revision of the Department of Revenue Schedule OR-REZT, form 150-102-046, Reservation Enterprise Zone Tax Credit though not submit it with the tax return, for an applicable income/corporate excise tax year beginning before (January 1, 2028) the date prescribed under section 21, chapter 913, Oregon Laws 2009, as last amended in 2017 (c.610 §1). The schedule is available from the Department of Revenue at oregon.gov/dor/forms/Pages/default.aspx.

Statutory/Other Authority: 285C.060(1) & ORS 285A.075
Statutes/Other Implemented: ORS 315.506 (Formerly ORS 285C.309, not removed from series by legislative action) & OrLaws 2019, ch. 320, §7 (inserting cross-reference to definitions in ORS 285C.300)
History:
OBDD 14-2023, amend filed 07/05/2023, effective 07/05/2023
OBDD 11-2020, amend filed 08/12/2020, effective 08/12/2020
OBDD 10-2017, amend filed 11/29/2017, effective 11/29/2017
OBDD 11-2016, f. & cert. ef. 9-16-16
OBDD 14-2015, f. & cert. ef. 11-12-15
OBDD 24-2010, f. & cert. ef. 6-14-10

123-656-2000
FEDERAL ENTERPRISE ZONES — Federally Based Designation

For purposes of applying for and designating an enterprise zone under ORS 285C.085(2):

(1) City, port or county governments may seek designation of a zone corresponding to the boundary of a single Federal Enterprise Zone located in the government’s territory:

(a) Submission may be made to the Department at any time without regard to an application form;

(b) Besides a map and so forth of the proposed enterprise zone consistent with OAR 123-650-1500, the submission must document the Federal Enterprise Zone’s official existence, location and satisfaction of OAR 123-656-0100(2)(a), except to the extent that the Department is fully aware of such satisfaction;

(c) Information related to local economic hardship is not necessary;

(d) The governments must send notice and engage in timely communication with local taxing districts in accordance with OAR 123-650-5500;

(e) A cosponsor of a zone terminated by order of the Director under ORS 285C.245(3) to (5) is not excluded from applying;

(f) Zone sponsor may not elect under ORS 285C.070 for hotels, motels or destination resorts to be eligible business firms in the zone; and

(g) The designation may not be the re-designation of an existing or previously existing enterprise zone.

(2) The designation of the zone may be made without regard to any limitation on size or dimensions as described in OAR 123-650-1000 and 123-650-1100.

(3) The zone must still conform to requirements for:

(a) Being either urban or rural as described in OAR 123-650-0700, except through a special dispensation in the Director’s Order;

(b) Not containing any area inside any other existing enterprise zone consistent with OAR 123-650-1000(2); and

(c) Inclusion of all area in each cosponsor that is inside the Federal Enterprise Zone according to OAR 123-656-0100(1).

(4) The Director shall issue an order to effect the designation.

(5) A (co)sponsor of an existing enterprise zone may not seek designation as described in this rule, if the Federal Enterprise Zone overlaps with a portion of the existing enterprise zone, but rather should avail itself of a boundary change as described in OAR 123-656-2100.

Statutory/Other Authority: ORS 285A.075 & 285C.060(1)
Statutes/Other Implemented: ORS 285C.085
History:
OBDD 10-2017, amend filed 11/29/2017, effective 11/29/2017
OBDD 14-2015, f. & cert. ef. 11-12-15
OBDD 24-2010, f. & cert. ef. 6-14-10

123-656-2100
Boundary Changes to Conform to Federal Zone

For purposes of a local request to change the boundary of an existing enterprise zone under ORS 285C.085(3):

(1) The request is generally comparable to submission as described in OAR 123-650-4400 and OAR 123-656-2000.

(2) Such a boundary change may add an area to the existing zone, only if the area is located in a county, in which the zone is already located, or in a contiguous county.

(3) Following the change in the zone boundary, the existing zone shall be Terminated-by-Statute or may be terminated by order of the Director, as normal under ORS 285C.245, irrespective of the boundary change.

(4) If the Federal Enterprise Zone terminates prematurely for nonperformance, violation of federal guidelines or similarly unusual circumstances, then the Director may rescind the order changing the boundary of the zone, as if that boundary change had never occurred. Any business firm located in an area consequently left out of the zone shall enjoy the same protection under the relevant provisions of law and this chapter of administrative rules for location in a terminated enterprise zone.

(5) Once an enterprise zone has been designated or amended as described in OAR 123-656-2000 or this rule, a (further) change in the boundary of the zone may be requested and done under ORS 285C.115, as otherwise allowed, with the following clarifications:

(a) If the total area of the enterprise zone equals or exceeds the relevant 12 or 15 square miles, additional area may be included only if located:

(A) In parts of the Federal Enterprise Zone within a city, port or county that would become a cosponsor of the zone with the boundary change;

(B) In new parts of the Federal Enterprise Zone, as amended by authority of the federal government; or

(C) In another Federal Enterprise Zone that is located in a city, port or county that already sponsors the zone.

(b) If the zone exceeds the maximum overall allowed distance applicable to the zone, additional areas may be included in one of the following ways:

(A) Consistent with subsection (a) of this section;

(B) Where such areas do not increase the overall distance within the zone consistent with provisions under ORS 285C.120(1)(b) and (c); or

(C) By virtue of a waiver under ORS 285C.120(2) as described in OAR 123-650-1100(4).

Statutory/Other Authority: ORS 285A.075 & 285C.060(1)
Statutes/Other Implemented: ORS 285C.085 & 285C.115
History:
OBDD 14-2015, f. & cert. ef. 11-12-15
OBDD 24-2010, f. & cert. ef. 6-14-10

123-656-2300
Terminations

For an enterprise zone designated as described in OAR 123-656-2000:

(1) The zone is Terminated-by-Statute as normal under ORS 285C.245(2), subsequent to the effective date of designation by order of the Director, regardless of any intervening termination of the Federal Enterprise Zone due to programmed operation under federal statutes or repeal of the operative federal law.

(2) The zone may terminate prematurely by order of the Director under ORS 285C.245(3) to (5) and shall terminate by programmatic sunset under ORS 285C.255 consistent with OAR 123-650-9100(4).

(3) With respect to termination in section (1) of this rule, the local zone sponsor may re-designate it as a regular enterprise zone under ORS 285C.250 but only in conformance with all applicable requirements including but not limited to ORS 285C.090.

(4) In addition, the zone may also terminate by order of the Director under ORS 285C.085(5), effectively rescinding the order designating the zone, as if it had never existed, in the event that the federal government prematurely terminates the Federal Enterprise Zone for nonperformance, violation of federal guidelines or similarly unusual circumstances. In this case, there is no provision for a re-designation under ORS 285C.250, but any business firm located in the zone shall enjoy the same protection under relevant provisions of law and this chapter of administrative rules for location in a terminated enterprise zone.

Statutory/Other Authority: ORS 285A.075 & 285C.060(1)
Statutes/Other Implemented: ORS 285C.085, 285C.245, 285C.250 & 285C.255
History:
OBDD 14-2015, f. & cert. ef. 11-12-15
OBDD 24-2010, f. & cert. ef. 6-14-10