Rule Rule 123-674-8200
Grandfathering in a Terminated Zone

Under ORS 285C.245 (Termination)(1)(b) and (c) after termination of an enterprise zone:
(1) In order for an eligible business firm to receive an exemption according to section (2) of this rule, the firm must have been on the effective date of the zone’s termination in that zone:
(a) A qualified business firm; or
(b) An actively authorized business firm consistent with OAR 123-674-8100 (Authorization and Zone Termination)(1)(a), but in that case no subsequent Application is allowed in section (2) of this rule, until an exemption is successfully claimed on qualified property pursuant to the outstanding authorization in accordance with OAR 123-674-8100 (Authorization and Zone Termination)(2) and (3).
(2) Qualified property owned or leased by the eligible business firm shall be exempt under ORS 285C.170 (Construction-in-process exemption) or 285C.175 (Enterprise zone exemption) subject to any other normally applicable requirement, if all of the following are true:
(a) Not more than 10 years from the effective date of termination, the firm submits a complete Application under ORS 285C.140 (Application for authorization), in accordance with OAR 123-674-2000 (AUTHORIZATION PROCESS — Timely Submission) and 123-674-2100 (Allowably Late Applications);
(b) The qualified property is to be located entirely within the boundaries of the terminated zone, as they existed at the time of termination, and not inside any currently designated enterprise zone;
(c) The eligible business firm’s Application is:
(A) Approved by the county assessor and:
(i) The local manager of the terminated zone; or
(ii) Absent an appointed zone manager, by a suitable representative or formal action of the zone sponsor, or by the Department; or
(B) Allowed on magisterial or judicial appeal.
(d) Construction, modification or installation of the qualified property pursuant to the Application commences no later than June 30 following the last year of the firm’s final outstanding exemption in the zone—that is, before the end of the very last tax year in which qualified property of the firm is still exempt;
(e) Completion of construction, additions, modification or installation occurs in accordance with OAR 123-674-8300 (Timely Completion of Construction);
(f) Timely exemption claim is made to the county assessor under ORS 285C.220 (Exemption claims) and 285C.225 (Sponsor’s addendum);
(g) The business firm and all of its qualified property have not been disqualified in the terminated zone consistent with OAR 123-674-6400 (General Firm Disqualification) or section (4) of this rule; and
(h) The authorized business firm complies with any applicable local policy or requirement, as well as ORS 285C.050 (Definitions for ORS 285C.050 to 285C.250) to 285C.250 (Redesignation or designation of new zone following zone termination), in effect when the zone terminated including but not limited to any requirement arising from or associated with authorization.
(3) The sponsor of a terminated enterprise zone may enter into a written agreement with an eligible business firm for an extended abatement under ORS 285C.160 (Agreement between firm and sponsor for additional period of exemption) prior to final action in paragraph (2)(c)(A) of this rule.
(4) Disqualification for purposes of ORS 285C.245 (Termination)(1)(c) does not include:
(a) Loss of an extended abatement under ORS 285C.240 (Disqualification)(3)(b) as described in OAR 123-674-0500 (EXTENDED TAX ABATEMENT — General Points)(2);
(b) Payment to the zone sponsor of the equivalent of one year’s tax savings under ORS 285C.240 (Disqualification)(6) according to OAR 123-674-6600 (PAYBACK IN LIEU OF DISQUALIFICATION — Applicability) to 123-674-6630 (Utilization of Payments); or
(c) Failure to meet a requirement pertaining to some but not all property consistent with OAR 123-674-6300 (Disqualification of Particular Property).
(5) An authorized or qualified business firm may not make Application as described in section (2) this rule, if since termination, another business or corporation has bought or absorbed the firm, such that the firm neither remains essentially intact, even as a subsidiary of the purchasing company, nor continues to operate substantially as it had prior to its being acquired.
Last accessed
Oct. 21, 2020