Chapter 3.35
PROPERTY TAX EXEMPTIONS Revised 10/19

Sections:

3.35.010    Brownfield properties.

3.35.020    Rural industrial property. Revised 10/19

3.35.010 Brownfield properties.

A. Purpose. The purpose of this section is to establish rules for the consideration of applications for exemption of “brownfield” properties, as that term is defined in ORS 285A.185, pursuant to Chapter 96, Oregon Laws 2016 (House Bill 4084 (2016) (codified as a note following ORS 307.430)).

B. Exemption of Qualifying Brownfield Properties. Properties satisfying the application and eligibility requirements set forth herein qualify for an exemption or partial exemption of improvements and personal property on land that constitutes a brownfield, as that term is defined in ORS 285A.185.

C. Eligibility Requirements. An owner of a brownfield shall show in an application:

1. That the owner or authorized representative of the owner has obtained, as applicable, a site evaluation, preliminary assessment, confirmation of release or remedial investigation of the brownfield prepared by a geologist registered under ORS 672.505 to 672.705 or a professional engineer as defined in ORS 672.002.

2. If the site evaluation, preliminary assessment, confirmation of release or remedial investigation required under subsection (C)(1) of this section concludes that a remedial action, as defined in ORS 465.200, is required in response to the release of a hazardous substance at the brownfield, that the remedial action shall be conducted pursuant to an agreement with, an order of or a program or process authorized by the Oregon Department of Environmental Quality (“DEQ”) under ORS 465.200 to 465.455 and 465.900.

3. That the owner is in compliance with any agreement, order, program or process governing the conduct of the remedial action under subsection (C)(2) of this section.

4. That the report of the site evaluation, preliminary assessment, confirmation of release or remedial investigation required under subsection (C)(1) of this section, and a report prepared by a geologist or professional engineer showing that any remedial action has complied with any applicable agreement, order, program or process authorized by DEQ and with any other applicable state law administered by DEQ, have been submitted to DEQ.

D. Ineligible Property.

1. Property is not eligible for this exemption if, at the time an application for the property is filed, the property is:

a. Subject to assessment under ORS 308.505 to 308.681.

b. State-appraised industrial property as defined in ORS 306.126.

c. Listed on the National Priorities List pursuant to the Federal Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (a “Superfund site”).

2. For any property tax year, property granted any other special assessment, exemption or partial exemption is ineligible for this exemption.

E. Term of Exemption. This exemption shall last until the earlier of:

1. Ten years; or

2. The date on which the dollar amount of the exemption equals the eligible costs for the property as determined under subsection (I) of this section.

F. Amendment/Repeal of Section. The Marion County board of commissioners may amend or repeal this section at any time. However, property that is receiving an exemption when this section is amended or repealed shall continue to receive the exemption pursuant to the codified version of this section, as amended, when the property was initially granted the exemption.

G. Effective Date of Exemption. This exemption does not become effective unless the rates of taxation of the taxing districts located within the county whose governing boards agree to the exemption described in this section, when combined with the rate of taxation of the county, equal 75 percent or more of the total combined rate of taxation within the territory of the county. Once this exemption becomes effective, it shall be effective for the tax levies of all taxing districts in which a brownfield that is granted an exemption is located.

H. Application.

1. The owner of a brownfield seeking this exemption must file an application, with the assessor, on or before March 15th preceding the beginning of the property tax year for which the exemption is sought. A single application may be filed for brownfields in contiguous tax accounts under common ownership. Notwithstanding the foregoing, an application may be filed after March 15th and on or before December 31st if the application is accompanied by a late filing fee equal to the greater of $200.00 or one-tenth of one percent of the real market value of the property to which the application relates as of the assessment date for that tax year.

2. An application must include:

a. The address of the brownfield.

b. Documentation showing the ownership of the property by the person filing the application.

c. An affidavit signed by the owner of the brownfield under penalty of perjury affirming that the owner has not, by any acts, or omissions where there is a duty to act, caused, contributed to or exacerbated the release of a hazardous substance at the brownfield for which the eligible costs as determined under subsection (I) of this section are to be incurred.

d. Documentation showing that all applicable eligibility requirements have been met.

e. Documentation of estimated eligible costs with respect to the brownfield prepared by DEQ or by a person unrelated to the owner of the brownfield and having expertise in estimating such costs.

f. An application fee, if any, required by the county. The county may adopt an application fee by board order.

3. The application shall be reviewed by the assessor. Upon request, DEQ may consult with the assessor regarding remedial action costs included in the application as eligible costs. The assessor may consult with the owner of the brownfield about the application, and the owner may amend the application.

4. If the assessor determines that the application does not meet the requirements of this section, the assessor shall present the application and the facts supporting the assessor’s conclusion to the board. The board shall consider the information provided by the assessor and either issue an order determining the brownfield to be ineligible or give direction to the assessor to take further steps to determine eligibility. If the board issues an order determining the brownfield to be ineligible, the assessor shall promptly notify the owner of the brownfield in writing that the application is not approved, stating the reasons for the determination. A determination of ineligibility is not reviewable, but the owner of the brownfield may file an application under this section for any subsequent year.

5. If the assessor determines that the application meets the requirements of this section, the assessor shall promptly present the board with an order to approve and certify the period for which the exemption is granted and the estimated eligible costs with respect to the brownfield. If the board adopts an order to approve the exemption, the assessor shall notify the owner of the brownfield in writing that the application is approved. If the board does not adopt an order to approve the exemption, it may give direction to the assessor to take further steps on the application.

6. The assessor may charge the owner a fee of up to $200.00 for the first year and up to $100.00 for each subsequent year for which the exemption is granted to compensate the assessor for duties imposed by this section. This fee is in addition to any application fee which the board may adopt by order.

7. The transfer of the brownfield in an arm’s-length transaction shall not disqualify the property from the exemption granted to the property under the ownership of the transferor provided the transferee:

a. Notifies the assessor as soon as practicable of the transfer;

b. Files an affidavit described in subsection (H)(2)(c) of this section; and

c. Complies with all requirements of this section.

I. Eligible Costs.

1. Eligible costs equal the discounted present value of estimated after-tax costs directly related to the remaining work necessary to remove, contain or treat the contamination of a brownfield.

2. Eligible costs may include:

a. Remedial action costs as defined in ORS 465.200, including costs for a site evaluation, preliminary assessment, confirmation of release or remedial investigation performed by a geologist or professional engineer without the oversight or approval of DEQ.

b. The costs of demolishing existing improvements on the brownfield as necessary for removal or remedial action, as those terms are defined in ORS 465.200.

c. The costs of abating the release of hazardous substances within existing improvements on the brownfield.

d. The costs of new improvements constructed on the brownfield for the purpose of containing hazardous substances or limiting exposure to the release of hazardous substances.

e. The costs of managing, handling, removing, treating and disposing of solid waste, environmental media and building materials containing hazardous substances in the course of redeveloping the brownfield.

f. The costs of environmental audits, surety bonds, insurance, engineering and legal fees and monitoring other than water monitoring.

3. For purposes of subsection (H)(2)(e) of this section, documentation of eligible costs may include, but is not limited to, bids, cost estimates, remediation plans, copies of contracts, notes and minutes of contract negotiations, and accounts, invoices, sales receipts and other payment records of purchases, sales, leases and other transactions relating to the eligible costs.

4. Eligible costs shall be reduced by the amount of any state, federal or other grant moneys, tax credits, insurance proceeds or legal settlements received by the owner of the brownfield to offset eligible costs for the brownfield.

J. Exemption Percentage – Applicability to New Property – Notation on Tax Roll.

1. An approval of an exemption shall state the percentage, up to 100 percent, of exemption to be applied to the real market value of the improvements and personal property. ORS 307.032 applies to improvements and personal property granted partial exemption.

2. The exemption or partial exemption shall apply to new or existing property of any classification under applicable Oregon Department of Revenue rules.

3. Each year the assessor shall add to the assessment and tax rolls of the county, with respect to the improvements and personal property granted exemption or partial exemption, the notation “potential additional tax.”

K. Procedures for Monitoring and Verifying Compliance.

1. By April 1st of each tax year subject to exemption, the owner shall provide a written report to the assessor detailing, for the previous tax year:

a. The owner’s continued compliance with all eligibility requirements set forth in subsection (C) of this section; and

b. The owner’s progress on remediation or redevelopment of the brownfield.

2. The owner shall attach to the report all documentation necessary to substantiate compliance with subsections (K)(1)(a) and (b) of this section.

3. The assessor shall review the report for compliance with the requirements of subsections (K)(1) and (2) of this section. The assessor may request additional documentation from the owner in order to verify compliance with subsections (K)(1)(a) and (b) of this section.

4. At any point while the property is subject to exemption, the assessor may request an inspection of the subject property or any documents which would substantiate compliance with subsections (K)(1)(a) and (b) of this section.

L. Disqualification.

1. Property that is granted an exemption shall continue to receive the exemption until the property is disqualified by the earliest of:

a. The expiration of the period for which the exemption was certified under subsection (H) of this section.

b. The date on which the dollar amount of the exemption equals the eligible costs for the property as determined under subsection (I) of this section.

c. The discovery by the assessor that the owner of the brownfield has failed to:

i. Comply with the eligibility requirements set forth in subsection (C) of this section;

ii. Begin or make reasonable progress on remediation or redevelopment of the brownfield; or

iii. File any required reports.

d. The discovery by the assessor that any statement or representation in any documentation filed pursuant to subsection (H) of this section was misleading or false.

2. The assessor may provide an owner with the opportunity to cure the grounds for disqualification under subsection (L)(1) of this section.

3. Upon disqualification the property shall be assessed and taxed under ORS 308.146.

4. Upon disqualification, there shall be added to the tax extended against the improvements or personal property on the next assessment and tax roll, to be collected and distributed in the same manner as other property taxes, additional taxes, equal to the difference between the taxes assessed against the property and the taxes that otherwise would have been assessed against the property if the property had not been granted exemption or partial exemption, for all years for which the property was granted exemption or partial exemption.

5. Additional taxes collected under this section shall be deemed to have been imposed in the year to which the additional taxes relate.

6. The amount of additional taxes determined to be due under this section may be paid to the tax collector prior to the completion of the next assessment and property tax roll pursuant to ORS 311.370.

M. Sunset. Subsections (A) through (L) of this section are repealed on January 2, 2027. However, property that has been granted an exemption before January 2, 2027, shall continue to receive the exemption for the period of time for which the exemption was granted. [Ord. 1390 §§ 1 – 13, 2018.]

3.35.020 Rural industrial property. Revised 10/19

A. Purpose. The purpose of this section is to create a process for the consideration of applications for exemption of qualifying rural industrial property pursuant to Chapter 112, Oregon Laws 2016 (Senate Bill 1565 (2016) (codified as a note following ORS 307.340)).

B. Definitions. The following definitions shall be used in considering applications for property tax exemptions pursuant to this section:

1. “Annual average employment of the applicant” means the average employment of the applicant, calculated over the 12 months preceding the date of application.

2. “Eligible location” means land and improvements that are located in a rural area. “Eligible location” includes a location that has not formerly been used for industrial purposes.

3. “Eligible property” means improvements classified as industrial under rules established by the Oregon Department of Revenue (“DOR”) pursuant to ORS 308.215(1)(a)(C), and associated personal property whether appraised by the county or by the DOR, that:

a. Are newly constructed or installed at an eligible location; and

b. Have a cost of initial investment to the purchaser of at least $1,000,000 and not more than $25,000,000.

4. “Employment of the applicant” means the number of employees working for the applicant a majority of their time in eligible operations at a location for which the applicant has submitted an application under this section.

5. “First-source hiring agreement” means an agreement between an applicant and a publicly funded job training provider whereby the provider refers qualified candidates to the firm for new jobs and job openings in the firm.

6. “Qualified property” means eligible property for which an application has been approved.

7. “Rural area” means an area located in unincorporated territory that is located entirely outside of the urban growth boundaries of any and all cities with populations of 40,000 or more, as the urban growth boundaries are acknowledged on the date on which an applicant submits an application for eligible property.

C. Grant and Scope of Authority.

1. The Marion County board of commissioners may adopt a resolution granting a property tax exemption for eligible property located within the unincorporated areas of Marion County.

2. The terms of the exemption must conform to the provisions of this section.

3. Qualified property must be:

a. Owned or leased by the applicant filing the application.

b. Used through the final year of exemption for the purpose, and at the location, identified in the application.

4. The exemption:

a. May be granted to eligible property only if the first assessment year to which the application relates is the first assessment year that begins after the eligible property was first placed in service; and

b. Shall be granted only for qualified property that was first placed in service after the resolution was adopted.

5. The exemption shall be equal to 100 percent of the real market value of the qualified property for the next three consecutive property tax years following the tax year in which an exemption is granted. If an application is filed for the current property tax year pursuant to subsection (D)(3) of this section and the application is granted, the exemption shall be for the current plus the next two consecutive property tax years.

6. An exemption does not become effective unless the rates of taxation of the taxing districts whose governing bodies agree to grant the exemption, when combined with the rate of taxation of the county, equal 75 percent or more of the total combined rate of taxation on the qualified property.

a. Upon the taking effect of an exemption, the exemption shall apply to all property tax levies of all taxing districts in which qualified property is located.

b. The decisions of the taxing districts under this subsection may not be changed but are not binding with respect to a resolution adopted pursuant to subsection (C)(7) of this section or a new resolution adopted pursuant to subsection (C)(1) of this section.

c. All qualified property shall be granted exemption on the same terms provided in the resolution adopted or amended by the county and in effect on the date the application is submitted.

7. The county may adopt at any time a resolution amending the terms of an exemption previously granted, subject to approval of the taxing districts under subsection (C)(6) of this section, or terminating the exemption. However, qualified property that has been granted an exemption shall continue to receive the exemption under the terms in effect at the time the exemption was first granted.

8. Qualified property granted an exemption is not eligible for any other property tax exemption or special assessment. Otherwise eligible property that has received another property tax exemption or special assessment is not eligible for this exemption. However, this subsection does not apply to the exemption granted under ORS 307.330.

D. Application.

1. The board hereby delegates to the assessor the responsibility for processing applications pursuant to this section.

2. The assessor shall prescribe exemption application forms and the information required to be included in the application.

a. If eligible property is located in a city and county, each of which has adopted an ordinance or resolution under Chapter 112, Oregon Laws 2016 (Senate Bill 1565 (2016)), the applicant shall elect the exemption the applicant wishes to receive for the eligible property by submitting the application to the city or county, as applicable.

b. If the initial cost of investment of the eligible property exceeds $25,000,000, the applicant shall specify in the application the items of eligible property having a total cost of initial investment of $25,000,000 for which the exemption is sought.

c. An application must be accompanied by an application fee fixed by the board by order in an amount determined to compensate the county for the actual costs of processing the application.

3. An application must be submitted for review to the county on or before March 1st preceding the property tax year to which the application relates. However, an application may be filed under this section for the current property tax year:

a. On or before December 31st of the property tax year, if the application is accompanied by a late filing fee of the greater of $200.00 or one-tenth of one percent of the real market value as of the most recent assessment date of the eligible property to which the application relates.

b. On or before April 1st of the property tax year, if the application is accompanied by a late filing fee of $200.00 and the applicant demonstrates good and sufficient cause, as defined in ORS 307.162, for failing to file a timely application or is a first-time filer, as defined in ORS 307.162.

c. A late filing fee collected under this subsection must be deposited in the general fund of the county.

d. An application may be filed as provided in this subsection notwithstanding that there are no grounds for hardship as required for late filing under ORS 307.475.

e. If the ownership of all property included in the application for a prior year remains unchanged, a new application is not required.

4. Upon receipt of an application the assessor shall determine as soon as practicable:

a. Whether the property to which the application relates is eligible property located within the unincorporated area of the county;

b. The cost of initial investment of the eligible property to the purchaser; and

c. The date on which the eligible property was first placed in service.

5. If any determination made pursuant to subsection (D)(4) of this section renders the property ineligible for the exemption, the application shall be rejected.

6. An application for exemption may not be approved unless the applicant and the board have agreed to, and the applicant has complied with, the conditions of this subsection.

a. The following standards apply to the imposition of conditions under this section:

i. The assessor may propose conditions to the board. The board may direct the assessor to communicate the proposed conditions to the applicant as proposed or modify conditions proposed by the assessor. In addition, the board may establish other reasonable conditions related to economic development, including, but not limited to, greater employment requirements than those required by subsection (D)(6)(a)(iv)(B) of this section.

ii. The assessor shall communicate the proposed conditions to the applicant after the assessor has discussed proposed conditions with the board. The assessor shall communicate any feedback from the applicant to the board, until a set of conditions have been agreed upon by the applicant and the board.

iii. All conditions must be satisfied within 90 days of the date of the board’s resolution granting an exemption unless a greater period is granted in the resolution.

iv. Each resolution granting a property tax exemption under this section shall contain the following terms as conditions:

(A) The applicant must agree to enter into a first-source hiring agreement with the board for the period of the exemption.

(B) As of a date certain agreed upon by the applicant and the governing body of the county, but in no event later than the end of the first property tax year for which the exemption is granted, the employment of the applicant may not be less than the greater of:

(1) One hundred ten percent of the annual average employment of the applicant; or

(2) The annual average employment of the applicant plus one employee.

(C) The applicant or another firm under common control may not close or permanently curtail operations in another part of the state that is more than 30 miles from the eligible location. This subsection applies to the transfer of any of the applicant’s operations to an eligible location from another part of the state, if the closure or permanent curtailment in the other part of the state decreased the applicant’s employment in the other part of the state.

(D) The applicant or another firm under common control may not close or permanently curtail operations in another part of the state that is 30 miles or less from the eligible location unless the employment of the applicant at the eligible location and at the other locations from which employees were transferred has been increased to not less than 110 percent of the annual average employment of the firm at the eligible location and the other locations from which the employees were transferred.

(E) The applicant must agree to the procedures for monitoring and verifying compliance with the conditions as set forth in subsection (E) of this section. The board may impose as a condition the applicant’s consent to annual inspections of either the subject property or specific documentation in order to substantiate applicant’s compliance with any conditions.

v. The board may make the conditions required by subsection (D)(6)(a)(iv) of this section more stringent, but cannot make them less stringent.

b. The conditions established under this subsection may be modified at the request of the applicant at any time before the beginning of the first property tax year for which the exemption is granted.

c. The conditions established under this subsection shall be set forth in the resolution adopted under subsection (D)(7) of this section and shall remain in effect throughout the period for which the exemption is granted.

7. If the property is eligible for exemption under subsection (D)(4) of this section, the application meets the requirements of this section, and the board and the applicant have agreed to conditions under subsection (D)(6) of this section, the assessor shall present a resolution to the board:

a. Approving the application;

b. Stating the conditions; and

c. Notifying the assessor and, if the qualified property is state-appraised industrial property, the DOR of the approval and including with the notification such information as is necessary for the assessor and the DOR to perform their respective duties with respect to the qualified property.

8. Provided all other requirements of ORS 305.275 are met, the cost of initial investment of the qualified property as determined under this section may be appealed pursuant to ORS 305.275 even if, for purposes of ORS 305.275(1)(a), the board makes the determination of the cost. The rejection of an application on any basis other than the cost of initial investment may not be appealed.

9. For each property tax year that qualified property is granted exemption, the assessor:

a. Shall enter on the assessment and tax roll the notation “potential additional tax liability”; and

b. May impose and collect a fee in an amount determined by the assessor to compensate the assessor for the actual costs of administering the exemption for the qualified property.

E. Procedures for Monitoring and Verifying Compliance.

1. By April 1st of each tax year subject to exemption, the applicant shall provide a written report to the assessor detailing how the applicant has remained in compliance with all the conditions during the previous tax year. The applicant shall attach all documentation necessary to the report in order to substantiate compliance with all conditions.

2. The assessor shall review the report for compliance with all the conditions during the previous tax year. The assessor may request additional documentation from the applicant in order to verify compliance with all the conditions.

3. At any point while the property is subject to exemption, the assessor may request an inspection of the subject property or any documents which would substantiate compliance with any conditions imposed upon the grant of exemption.

4. Upon the assessor’s conclusion that the applicant has failed to comply with any conditions at any point while the property is subject to exemption, the assessor shall comply with the disqualification process in subsection (F) of this section.

F. Disqualification.

1. The assessor shall immediately disqualify the property for this exemption, and the disqualified property shall be assessed and taxed in the same manner as other property is assessed and taxed, if, in any year through the final assessment year of the exemption:

a. The qualified property is not used for the purpose, or at the location, identified in the application; or

b. The applicant fails to comply with the conditions established and agreed to in the resolution.

2. Upon disqualification, additional taxes shall be assessed against the property for the first property tax year following the disqualification in an amount equal to the difference between the taxes assessed against the property and the taxes that would have been assessed against the property without the exemption, for the number of years that the exemption was granted.

G. Sunset. Subsections (A) to (F) of this section are repealed on January 2, 2024. However, newly constructed or installed industrial improvements that are granted exemption shall continue to receive the exemption under the provisions of the resolution granting the exemption.

H. Reporting to DOR. If the county has granted an exemption under this section, then as soon as practicable after December 1st of each year, the county shall submit the following information from the current property tax year to the DOR:

1. The kind and value of the qualified property;

2. The name of the owner or lessee that submitted an approved application;

3. The real market value of the qualified property;

4. The amount of ad valorem property taxes that were not imposed on the property because of the exemption;

5. The number of years and the percentage of real market value for which the exemption was granted; and

6. A copy of the employment and other conditions established for the property. [Ord. 1403 § 2, 2019; Ord. 1391 §§ 1 – 8, 2018.]