69th OREGON LEGISLATIVE ASSEMBLY--1997 Regular Session

SA to A-Eng. HB 2143

LC 840/HB 2143-A17

                      SENATE AMENDMENTS TO
                   A-ENGROSSED HOUSE BILL 2143

               By COMMITTEE ON RULES AND ELECTIONS

                             June 30

  On page 1 of the printed A-engrossed bill, line 4, delete ' and
285.617' and insert ', 285.617 and 318.031'.
  On page 21, line 16, after the period insert ' Notwithstanding
restrictions on the greatest distance allowed within an
enterprise zone under ORS 285.563 (3) and 285.585 (2)(f) and
section 2 (1)(c) of this Act, the Astoria Area Enterprise Zone
may be extended as far as the Clatsop County boundary.'.
  On page 22, after line 15, insert:
  '  { +  SECTION 36. + }  { + As used in sections 36 to 40 of
this Act:
  ' (1) 'County with chronic unemployment' means, based on the
most recently revised annual average unemployment rate available,
a county in which:
  ' (a) The median ratio of the unemployment rate of the county
to the equivalent rate of the entire United States for each year
is at least 1.3 over the last 20 years or over the last 10 years;
and
  ' (b) The current unemployment rate of the county is at least
one percentage point higher than the unemployment rate of the
county for the immediately prior year or at least 50 percent
higher than the current unemployment rate of this state.
  ' (2) 'Nonurban enterprise zone' has the meaning given that
term in ORS 285.560.
  ' (3) 'Taxing unit' means the State of Oregon or any county,
city, municipal corporation, district or other government unit
that has the power to tax. + }
  '  { +  SECTION 37. + }  { + (1) Any business firm proposing to
apply for the tax exemption provided under section 38 of this Act
shall, before the commencement of construction or installation of
property or improvements at a facility in a nonurban enterprise
zone and before the hiring of employees, apply for certification
with the sponsor of the zone and with the county assessor of the
county or counties in which the zone is located. The application
shall be made on a form prescribed by the Department of Revenue.
  ' (2) The application shall contain the following information:
  ' (a) A description of the firm's business operations and
facility in the nonurban enterprise zone;
  ' (b) A description and estimated cost or value of the property
or improvements to be constructed or installed at the facility in
the nonurban enterprise zone;
  ' (c) An estimate of the number of employees at the facility
that will be hired by the firm;
  ' (d) A commitment to meet all requirements of subsection (8)
of this section;
  ' (e) A commitment to satisfy all additional conditions for
certification that are imposed by the nonurban enterprise zone
sponsor under subsection (3)(c) of this section; and
  ' (f) Any other information considered necessary by the
Department of Revenue.

  ' (3) The sponsor and the county assessor shall certify the
business firm by approving the application if the sponsor and the
county assessor determine that:
  ' (a) The governing body of the county and city in which the
facility is located has adopted a resolution approving the
property tax exemption for the facility;
  ' (b) The business firm has committed to meet the requirements
of subsection (8) of this section;
  ' (c) The business firm has entered into a written agreement
with the sponsor of the nonurban enterprise zone that may include
any additional requirements that the sponsor may reasonably
request; and
  ' (d) The facility is located in a county with chronic
unemployment, based on the most recently revised annual average
unemployment rate available when the written agreement with the
zone sponsor is entered into.
  ' (4) The approval of an application by both the sponsor and
the county assessor under subsection (3) of this section shall be
prima facie evidence that the business firm will be qualified for
the property tax exemption under section 38 of this Act.
  ' (5) The sponsor or the county assessor shall not be liable in
any way if it is determined that the certified business firm has
not satisfied the requirements of subsection (8) of this section.
  ' (6) The sponsor and the county assessor shall provide copies
of an approved application to the applicant, the Department of
Revenue and the Economic Development Department.
  ' (7) If the sponsor or the county assessor fails or refuses to
certify the business firm, the business firm may appeal to the
Oregon Tax Court under ORS 305.404 to 305.560. The business firm
shall provide copies of the firm's appeal to the sponsor, the
county assessor, the Economic Development Department and the
Department of Revenue.
  ' (8) A business firm shall receive a property tax exemption
from the county assessor under section 38 of this Act for
property and improvements at a facility in a nonurban enterprise
zone if:
  ' (a) The total costs of property and improvements at the
facility after certification are or will be more than $50 million
by the end of the calendar year in which the facility is placed
in service;
  ' (b) The business firm hires or will hire at least 100
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 gross annual average wage 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 one-time requirement may be met in any year during
the first five years after the year in which operation of the
facility begins.
  ' (9) Upon meeting the requirements set forth in subsection (8)
of this section, the business firm shall notify the county
assessor in writing on a form prescribed by the Department of
Revenue that the requirements of subsection (8) of this section
have been met.
  ' (10) If the county assessor grants a tax exemption for
property at a facility under section 38 of this Act, the county
assessor, for each tax year that the property at the facility is
exempt from taxation under section 38 of this Act, shall:
  ' (a) Enter on the assessment roll, as a notation, the real
market value and assessed value of the property as if it were not
exempt under section 38 of this Act.
  ' (b) Enter on the assessment and the tax roll, as a notation,
the amount of taxes that would be due if the property were not
exempt.

  ' (c) Indicate on the assessment and tax roll that the property
is exempt and is subject to potential additional taxes as
provided in section 39 of this Act, by adding the notation '
enterprise zone exemption (potential additional tax).  '
  ' (11) If the county assessor denies an exemption applied for
under this section, the business firm may appeal the denial to
the Oregon Tax Court under ORS 305.404 to 305.560.
  ' (12) The county assessor shall provide copies of each
property tax exemption provided to a taxpayer under section 38 of
this Act to the enterprise zone sponsor, the Department of
Revenue and the Economic Development Department. + }
  '  { +  SECTION 38. + }  { + (1) All of the property and
improvements at the facility of a certified business firm shall
be exempt from ad valorem taxation if the facility satisfies the
requirements of section 37 (8) of this Act.
  ' (2) The exemption allowed under this section shall first
apply to the ad valorem tax year immediately following the tax
year in which the business firm's facility is placed in service.
Prior to such ad valorem tax year, no ad valorem taxes shall be
imposed by a taxing unit on or with respect to the facility site
and any property thereon.
  ' (3) An exemption allowed under this section shall be 100
percent of the assessed value of the property and improvements at
the facility in each of the tax years for which the exemption is
available. The exemption allowed under this section is available
for a period of 15 consecutive tax years.
  ' (4) An exemption allowed under this section shall not be
allowed for real or personal property that has received a
property tax exemption under ORS 285.597. + }
  '  { +  SECTION 39. + }  { + If a business firm that is
certified under section 37 of this Act fails to meet the minimum
requirements set forth in section 37 (8) of this Act, the ad
valorem tax liability of the business firm shall be increased for
the current tax year by an amount equal to the total amount of ad
valorem taxes exempted in previous ad valorem tax years. When
such an increase in ad valorem tax liability occurs, there 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 real property tax, an amount
equal to the difference between the taxes assessed against the
property and improvements and the taxes that would otherwise have
been assessed against the property and improvements for each of
the 15 consecutive tax years referred to in section 38 (3) of
this Act (or a lesser number of applicable years) as of July 1 of
the ad valorem tax year for which the property was disqualified
for the tax exemption. + }
  '  { +  SECTION 40. + }  { + (1) Notwithstanding any law under
which a taxing unit may levy or impose any ad valorem taxes,
fees, charges or assessments on or with respect to a taxpayer
located in a nonurban enterprise zone, a taxpayer constructing or
operating a facility in a nonurban enterprise zone that has been
determined to be exempt from ad valorem property taxes under
section 38 of this Act is entitled to tax credits for each tax
year that are equal to 75 percent of the taxpayer's payroll,
employee benefit costs and all other employee costs of the
facility for a period of 15 consecutive years.
  ' (2) The 15-year period referred to in subsection (1) of this
section may begin in any tax year designated by the taxpayer in
writing to the Department of Revenue, but shall not begin later
than the fifth calendar year after the year in which the taxpayer
begins operation of the facility.
  ' (3) The tax credits authorized by this section may be used in
each year during the 15-year period referred to in subsection (1)
of this section to offset any corporate excise taxes, corporate
income taxes, gross receipts taxes, sales and use taxes or any
other similar taxes levied or imposed by a taxing unit.
  ' (4) Any tax credits allowable under this section during the
15-year period referred to in subsection (1) of this section that
are not used by the taxpayer in a particular tax year during such
15-year period may be carried forward and used by the taxpayer
for a period of five years after the end of the 15-year period
referred to in subsection (1) of this section.
  ' (5) Notwithstanding subsections (3) and (4) of this section,
tax credits allowable under this section may not be used to
offset the first $1 million of corporate excise or income taxes
in any taxable year.
  ' (6) Notwithstanding subsections (1) to (5) of this section, a
taxing unit shall not levy or impose any taxes described in
subsection (3) of this section on or with respect to a facility
of the taxpayer, or the production therefrom, during construction
of the facility and during a start-up period of 24 months after
the tax year in which the taxpayer's facility is placed into
service.
  ' (7) The tax credits allowed under this section are not in
lieu of any deductions for depreciation or amortization for
payment of wages or other employee costs or any other costs or
expenses to which the corporation is entitled. The adjusted basis
of property that is exempt from ad valorem property tax under
section 38 of this Act shall not be further adjusted to take into
account the credits allowed under this section. + }
  '  { +  SECTION 41. + } ORS 318.031 is amended to read:
  ' 318.031. It being the intention of the Legislative Assembly
that this chapter and the Corporation Excise Tax Law of 1929
shall be administered as uniformly as possible (allowance being
made for the difference in imposition of the taxes and the
operative date of this chapter), the provisions of ORS 305.140,
305.150, ORS chapter 314 and of the following sections of ORS
chapter 315 or 317, as amended on or before August 3, 1955, and
as they may thereafter be amended, are incorporated into this
chapter by this reference and made a part hereof: ORS 315.104,
315.134, 315.148, 315.156, 315.204, 315.208, 315.234, 315.254,
315.304, 315.504 and 315.604 (all only to the extent applicable
for a corporation) and ORS 317.010, 317.013, 317.017 to 317.022,
317.030, 317.035, 317.038, 317.080, 317.152 to 317.154, 317.259
to 317.303, 317.310 to 317.386, 317.476 to 317.485, 317.510 to
317.635 and 317.705 to 317.725 { +  and section 40 of this 1997
Act + }.
  '  { +  SECTION 42. + }  { + Sections 36, 37, 38, 39 and 40 of
this Act are repealed on December 31, 2002. + }
  '  { +  SECTION 43. + }  { + Notwithstanding section 42 of this
Act, any taxpayer that qualifies for the tax exemptions and tax
credits provided for in sections 36 to 40 of this Act prior to
December 31, 2002, may continue to receive and use the tax
exemptions and tax credits allowed under sections 36 to 40 of
this Act after that date as if sections 36 to 40 of this Act had
not been repealed. + } ' .
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