69th OREGON LEGISLATIVE ASSEMBLY--1997 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 157-1
House Bill 2273
Ordered printed by the Speaker pursuant to House Rule 12.00A (5).
Presession filed (at the request of Representative Tony
Corcoran)
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 as
introduced.
Requires business seeking key industry property tax exemption
to commit to paying employees at specified wage level or more,
maintaining minimum employment level, providing health insurance
and implementing certain environmental protection programs.
Imposes such requirements for duration of exemption period.
Imposes minimum employment level requirement for exemption period
plus an equal number of years after exemption ends.
Establishes reporting requirements. Authorizes state agencies
to verify compliance with environmental protection programs.
Creates cause of action for breach of commitment. Authorizes
court to award such remedy as court determines appropriate.
Directs court in case of minimum employment level breach to award
damages approximating taxes forgone as result of exemption, as
determined under specified formula.
Applies to projects determined to be eligible for tax exemption
on or after effective date of Act.
A BILL FOR AN ACT
Relating to economic development; creating new provisions; and
amending ORS 285.398, 285.400, 285.402 and 307.123.
Be It Enacted by the People of the State of Oregon:
SECTION 1. { + The people of the State of Oregon find that
when a business is granted the tax exemption described under ORS
307.123 as an incentive for locating and expanding business
operations in Oregon, the exemption results in a shift in the
burden of paying for local services and education to individuals
and small businesses. Therefore, the people find that no business
should receive a tax exemption for the location and expansion of
business operations within Oregon unless the business makes a
binding commitment to pay each employee a living wage, to provide
each employee and each employee's family member with health
insurance, to take measures to prevent pollution, reduce waste
and conserve water, and to continue to provide jobs to Oregonians
after the period of exemption has expired. The people further
find that a business that is awarded a tax exemption after making
this binding commitment should be held accountable and, when the
commitment to provide jobs is broken, should be required to
reimburse the taxing districts of this state for the taxes that
were forgone as a result of the grant of exemption. + }
SECTION 2. ORS 285.398 is amended to read:
285.398. As used in ORS 285.399, 285.400, 285.401,
285.402 { + , + }
{ - and - } 307.110 { + , 307.123 and sections 5, 9 and 10 of
this 1997 Act + }, unless the context requires
otherwise { + : + } { - , - }
{ + (1) 'Average weekly wage' means the average weekly wage
of workers in covered employment in Oregon, as determined by the
Employment Department, for the last quarter of the calendar year
preceding the fiscal year in which compensation is paid.
(2) 'Code area' has the meaning given that term in ORS 308.221.
(3) + } 'Eligible project' has the meaning given that term in
ORS 285.315.
{ + (4) 'Key industry business firm' means the entity that
will own, lease or operate an eligible project, or the entity
that has undertaken to have a project declared an eligible
project.
(5) 'Minimum employment level':
(a) Means an amount of full-time equivalent jobs performed by
employees of the key industry business firm and located in the
county in which the eligible project is located that equals 50
percent of the peak employment level and that consists of jobs
connected with the eligible project or that are created in
connection with operations other than the eligible project after
the date that the determination described in ORS 285.399 is made;
and
(b) May include an employment level of less than 50 percent of
the peak employment level if the periods at which employment is
less than 50 percent of peak employment cumulatively total less
than 26 weeks of any three-year period.
(6) 'Oregon Health Plan' has the meaning given that term in ORS
414.019.
(7) 'Peak employment level' means the largest annual average
number of full-time equivalent jobs connected to the eligible
project, performed by employees of the key industry business firm
and located in the county in which the eligible project is
located during the period in which property used in connection
with the eligible project is subject to ORS 307.123. + }
SECTION 3. ORS 285.400 is amended to read:
285.400. (1) The undertaking of any eligible project must be
requested by official action of the governing body of the county
taken at a regular or duly called special meeting thereof by the
affirmative vote of a majority of its members.
(2) The governing body of any Oregon county is encouraged to
forward appropriate prospective eligible projects to the Economic
Development Department for processing.
(3) For purposes of this section, for projects located on a
federally recognized Oregon Indian reservation, the governing
body of a county shall be considered to be the governing body of
the federally recognized Oregon Indian tribe.
(4) The county shall not request an eligible project to be
determined to be eligible for a tax exemption under ORS 307.123
unless, after a public hearing:
(a) The county and, if the proposed eligible project will be
located within a city, the city have approved the special
provisions related to the property tax exemption.
(b) As consideration for the county requesting determination
that the eligible project is eligible for a property tax
exemption under ORS 307.123, the { + key industry + } business
firm that will be benefited by the eligible project enters into
an agreement with the county { + that meets the requirements of
paragraph (c) of this subsection and that provides + } for
payment to the county of an annual fee for community services
support in an amount equal to 25 percent of the property taxes
exempted in each tax year, but not exceeding $2 million in any
year. The fee shall be paid annually during the tax exemption
period. For purposes of this paragraph, the property tax exempted
in a tax year shall be calculated as the effective tax rate after
any constitutional limits on the taxable portion of the value of
the project multiplied by the exempt value of the project.
(c) The applicant has { - reached - } { + entered into an
+ }agreement with the county { - on any other requirements
related to the project. The agreement shall - } { + under
paragraph (b) of this subsection, the terms of which shall
also + } include provisions { + :
(A) + } For the date of payment of the fee required under
paragraph (b) of this subsection, for refunding or crediting
overpayments, for interest on late payments or underpayments and
for the manner in which an appeal of the real market value of the
property included in the project will affect the payment of the
fee { + ; + } { - . - }
{ + (B) Requiring the applicant to pay each individual
employed full-time by the applicant in the county as a result of
the eligible project a wage of not less than the average weekly
wage and each part-time employee the hourly equivalent of this
wage;
(C) Requiring the applicant to provide health insurance the
coverage of which equals or exceeds that of the Oregon Health
Plan to each employee of the applicant who is employed in the
county by the applicant as a result of the eligible project and
to the dependents of the employee, at no cost to the employee;
(D) Requiring the applicant to maintain at least a minimum
employment level within the county for the entire period for
which the property used in connection with the eligible project
is entitled to the tax exemption and for an equal number of tax
years immediately succeeding the last year of the tax exemption;
(E) Requiring the applicant to describe credible pollution
prevention, waste reduction and water conservation programs to be
implemented in connection with the eligible project, to file
annually an implementation statement that reports on the
implementation of the programs and to permit verification by the
Department of Environmental Quality or the Water Resources
Department that the described programs are being implemented in a
reasonable, timely and ongoing manner;
(F) Requiring the applicant to refrain from discrimination or
retaliation against an employee because the employee has in good
faith acted to monitor or enforce compliance with this agreement;
(G) Consenting to the inspection of such books and records of
the applicant's as are necessary to determine compliance with the
average weekly wage and minimum employment level requirements of
the agreement by the Department of Revenue or the county
governing body; and
(H) Describing any other requirements relating to the project
as may be provided for by the parties to the agreement and that
do not conflict with the other provisions of this paragraph. + }
(5) The fee collected under subsection (4)(b) of this section
shall be distributed by the county based on an agreement entered
into at the time of application between the county and the city,
if any, in which the eligible project is located.
SECTION 4. ORS 285.402 is amended to read:
285.402. { + (1) + } Notwithstanding ORS 192.410 to 192.505,
the identity of { - an applicant - } { + a key industry
business firm applying + } for an eligible project designation
under ORS 285.399, the application form submitted to the county
governing body and the Oregon Economic Development Commission and
the negotiations conducted between the { - applicant - } { +
key industry business firm + } and the county shall be
confidential, until the county governing body gives notice of its
intent to take official action on the application.
{ + (2) Upon a determination by the commission that a project
is an eligible project, the key industry business firm shall
annually file a report with the county governing body, the county
assessor, the commission and the Department of Revenue.
(3) The report shall be filed in accordance with rules adopted
by the Department of Revenue and shall contain the following
information for the year for which the report is being made:
(a) For each week, the number of full-time equivalent jobs in
the county that are connected with the eligible project and that
are filled by employees of the key industry business firm;
(b) For each week, the total number of full-time equivalent
jobs filled by employees of the key industry business firm in the
county;
(c) The real market value of property used in connection with
the eligible project, as determined by the Department of Revenue
for the tax year beginning in the calendar year for which the
report is being made;
(d) The amount of the annual fee that was paid to the county
under ORS 285.400 for the tax year beginning in the calendar year
for which the report is being made;
(e) The lowest full-time weekly wage paid by the applicant to
an employee employed in connection with the eligible project and
the lowest hourly wage paid to a part-time employee employed in
connection with the eligible project at any time during the year;
(f) For the work weeks ending immediately before the last day
of each calendar quarter, the hours worked and the wages earned
by each employee;
(g) A copy of all health insurance plans in which an employee
employed in connection with the eligible project was eligible to
enroll;
(h) An implementation statement describing the measures taken
during the year to comply with such pollution prevention, waste
reduction or water conservation programs as may be described in
the agreement made under ORS 285.400; and
(i) Any other information as may be required to be reported by
the agreement made under ORS 285.400.
(4) The report shall be filed on or before March 15 following
the calendar year for which the report is being made. A report
shall be filed for each year from the date the determination is
made under ORS 285.399 that the project will be an eligible
project through the year in which concludes the tax year that is
15 tax years after the last year that the eligible project was
entitled to a tax exemption under ORS 307.123, whether or not the
eligible project received any economic benefit as a result of the
exemption.
(5) If a report is being filed for a year prior to a year in
which property used in connection with an eligible project first
receives a tax exemption under ORS 307.123, the report need only
contain the total number of full-time equivalent employees
employed by the key industry business firm in the county in which
the eligible project is to be located.
(6) In the case of a county governing body, the inspection
findings and implementation statements furnished by the
Department of Environmental Quality or the Water Resources
Department pursuant to sections 9 and 10 of this 1997 Act shall
be added to and considered a part of the most recent report filed
under this section.
(7) A report filed under this section shall be a public record
subject to ORS 192.410 to 192.505.
(8) A report filed under this section shall be retained by the
entities in receipt of the report for a period of not less than
20 years after the tax year in which the eligible project last
qualifies for the tax exemption under ORS 307.123. + }
SECTION 5. { + (1) The following persons may bring an action
in circuit court against a key industry business firm that has
entered into an agreement described under ORS 285.400 (4) for a
breach of the terms of that agreement:
(a) The county governing body or a municipal governing body in
the county wherein the eligible project is located;
(b) A current or former employee of the key industry business
firm who has been affected by the breach of the agreement;
(c) A resident of the county in which the eligible project is
located; or
(d) In the case of an action brought for the breach of the
agreement to meet a minimum employment level as described under
ORS 285.400 (4)(c)(D), the Department of Revenue.
(2) Except for an action brought for the breach of the
agreement to meet a minimum employment level as described under
ORS 285.400 (4)(c)(D), the court may award the following to a
plaintiff who prevails in an action under this section:
(a) Damages that may have been incurred as a result of the
breach of the agreement;
(b) Costs, disbursements and reasonable attorney fees that may
have been incurred by the plaintiff;
(c) A prevailing plaintiff fee of up to $5,000; and
(d) Such other remedies as the court may deem appropriate.
(3)(a) In the case of an action for the breach of the agreement
to meet a minimum employment level as described under ORS 285.400
(4)(c)(D), the exclusive remedy that a court may grant is an
award of monetary damages. The damages shall be calculated as
follows:
(A) For each tax year in which the eligible project received a
tax exemption under ORS 307.123, subtract the value of the
property that was subject to tax under ORS 307.123 from the total
real market value of property used in connection with the
eligible project for that tax year;
(B) Multiply each amount calculated under subparagraph (A) of
this paragraph that is greater than zero by the tax rate for the
code area in which the eligible project is located;
(C) Subtract from each amount calculated under subparagraph (B)
of this paragraph the amount of fees paid to the county under ORS
285.400 (4)(b) for the tax year upon which the calculation is
based;
(D) Determine an amount of interest for each amount calculated
under subparagraph (C) of this paragraph for each year from the
tax year on which the calculation is based to the tax year in
which damages under this paragraph are being awarded; and
(E) Add together the amounts calculated under subparagraphs (C)
and (D) of this paragraph.
(b) In making the calculation under paragraph (a) of this
subsection:
(A) The tax rate for the code area shall be the actual tax rate
that was extended on the general property tax and assessment roll
for the tax year ending in the year in which the action brought
under this section was commenced;
(B) No redetermination of the tax rate shall be made for
purposes of making the calculations described under this
subsection; and
(C) The interest rate to be applied in computing the amounts of
interest described in paragraph (a)(D) of this subsection shall
be the applicable rate in ORS 311.505 for the tax year ending in
the year in which the action brought under this section was
commenced, notwithstanding ORS 311.500.
(c) If property used in connection with the eligible project is
located in more than one code area, the amounts calculated under
paragraph (a)(A) of this subsection shall be allocated to each
code area in the same proportion as the real market value of the
eligible project's property in a code area relates to the total
real market value of all property used in connection with the
eligible project.
(d)(A) The court shall order the damages described in paragraph
(a) of this subsection to be paid to those taxing districts
having jurisdiction over the property in the same proportion to
the total amount of damages as each taxing district's levy was to
the total levy for the tax year ending in the year in which the
action brought under this section was commenced.
(B) A payment made under this paragraph shall be paid into the
general fund of the taxing district, to be distributed in the
same manner and for the same purposes as other general fund
moneys of the taxing district.
(e) Notwithstanding paragraph (a) of this subsection, the court
may award:
(A) Costs, disbursements and reasonable attorney fees to a
prevailing plaintiff in an action to which this subsection
applies; and
(B) A prevailing plaintiff fee of up to $5,000.
(f) A court ordering an award under this subsection shall
notify the county assessor of the court's determination. + }
SECTION 6. { + (1) An action under section 5 of this Act must
be commenced within two years of the date a report was filed
under ORS 285.402 for a year in which a breach of the agreement
described under ORS 285.400 (4) is claimed.
(2) If a filed report contains false information with respect
to a material fact underlying the claim of breach of the
agreement, the time for bringing an action under section 5 of
this Act shall be extended until two years after the date the
report is corrected. + }
SECTION 7. { + An action brought under section 5 of this Act
is not subject to the provisions of ORS 20.190. + }
SECTION 8. ORS 307.123 is amended to read:
307.123. (1) Except as provided in subsection (3) of this
section, real or personal property that the Oregon Economic
Development Commission, acting pursuant to ORS 285.399, has
determined is eligible for the tax exemption provided in this
section, shall be subject to assessment and taxation as follows:
(a) The first $100 million in real market value, increased
annually for growth at the rate of six percent shall be taxable.
The first $100 million of real market value, as adjusted, shall
be allocated as follows until the entire amount is assigned:
first to land, second to buildings, third to real property
machinery and equipment and last to personal property.
(b) The remainder of the real market value shall be exempt from
taxation for a period of 15 years from the beginning of the tax
year after the earliest of the following dates:
(A) The date the property is certified for occupancy or, if no
certificate of occupancy is issued, the date the property is used
to produce a product for sale; or
(B) The expiration of the exemption for commercial facilities
under construction under ORS 307.330.
(2) If the real market value of the property falls below that
set out in subsection (1)(a) of this section, the owner or lessee
shall pay taxes only on the real market value of the property.
(3) Notwithstanding subsection (1) of this section, no real or
personal property that has received an exemption under ORS
285.597 shall be assessed under this section.
(4) The Department of Revenue may adopt such rules, and
prescribe such forms, as are necessary for administration of this
section.
(5) { + (a) Except as provided in paragraph (b) of this
subsection, + } the determination by the Oregon Economic
Development Commission that a project is an eligible project that
may receive a tax exemption under this section shall be
conclusive, so long as the property included in the eligible
project is constructed and installed in accordance with the
application approved by the commission.
{ + (b) If the county assessor receives notification that an
order has been issued under section 5 of this 1997 Act as the
result of a court determination that the minimum employment level
required in an agreement entered into in connection with an
eligible project has not been met, property used in connection
with the eligible project shall not be eligible for a tax
exemption under this section, beginning with the first tax year
that commences after receipt of the notification by the
assessor. + }
(6) Notwithstanding subsection (1) of this section, if the
owner or lessee of property exempt under this section fails to
pay the fee required under ORS 285.400 (4)(b) by the end of the
tax year in which it is due, the exemption shall be revoked and
the property shall be fully taxable for the following tax year
and for each subsequent tax year for which the fee remains
unpaid. If an unpaid fee is paid after the exemption is revoked,
the property shall again be eligible for the exemption provided
under this section, beginning with the tax year after the payment
is made. Reinstatement of the exemption under this subsection
shall not extend the 15-year exemption period provided for in
subsection (1)(b) of this section.
SECTION 9. { + (1) The Department of Environmental Quality
shall inspect an eligible project for which an implementation
statement has been filed describing the implementation of a
pollution prevention or waste reduction program required under an
agreement entered into pursuant to ORS 285.400. The purpose of
the inspection shall be to ascertain the reasonableness and
timeliness of the program's implementation and the degree to
which the program's implementation complies with the description
of the program in the agreement.
(2) The inspection shall be made within six months of the date
the implementation statement is filed with the department.
(3)(a) The results of the inspection shall be reported in
written findings to the key industry business firm.
(b) A copy of the department's findings, along with a copy of
the implementation statement upon which the inspection was based,
shall be sent to the county governing body of the county in which
the eligible project is located.
(4) The department shall impose on the key industry business
firm an inspection fee equal to the cost of the inspection.
(5) The Environmental Quality Commission may adopt such rules
as it deems necessary to implement the provisions of this
section. + }
SECTION 10. { + (1) The Water Resources Department shall
inspect an eligible project for which an implementation statement
has been filed describing the implementation of a water
conservation program required under an agreement entered into
pursuant to ORS 285.400. The purpose of the inspection shall be
to ascertain the reasonableness and timeliness of the program's
implementation and the degree to which the program's
implementation complies with the description of the program in
the agreement.
(2) The inspection shall be made within six months of the date
the implementation statement is filed with the department.
(3)(a) The results of the inspection shall be reported in
written findings to the key industry business firm.
(b) A copy of the department's findings, along with a copy of
the implementation statement upon which the inspection was based,
shall be sent to the county governing body of the county in which
the eligible project is located.
(4) The department shall impose on the key industry business
firm an inspection fee equal to the cost of the inspection.
(5) The Water Resources Commission may adopt such rules as it
deems necessary to implement the provisions of this section. + }
SECTION 11. { + The new provisions and amendments to statutes
made by sections 1 to 10 of this Act apply to eligible projects
that are first determined to be eligible projects by the Oregon
Economic Development Commission under ORS 285.399 on or after the
effective date of this Act. + }
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