Oregon Revised Statutes Chapter 94 § 94.538 — Transferable development credit systems

Transferable development credit systems. (1) One or more governmental units may establish a transferable development credit system, including a process for allowing transfer of development interests from a sending area within the jurisdiction of one governmental unit to a receiving area within the jurisdiction of another governmental unit. (2) If the transferable development credit system allows transfer of development interests between the jurisdictions of different governmental units, the process must be described in an intergovernmental agreement under ORS 190.003 to 190.130 entered into by the governmental units with land use jurisdiction over the sending and receiving areas and, for purposes of administration of the process, the Department of Land Conservation and Development. The intergovernmental agreement may contain provisions for sharing between governmental units of the prospective ad valorem tax revenues derived from new development in the receiving area authorized under the system. (3) A transferable development credit system must provide for: (a) The record owner of a lot, parcel or tract in a sending area to voluntarily sever and sell development interests of the lot, parcel or tract for use in a receiving area; (b) A potential developer of land in a receiving area to purchase transferable development credits that allow a higher intensity use or development of the land, including development bonuses or other incentives not otherwise allowed, through changes to the planning and zoning or waivers of density, height or bulk limitations in the receiving area; (c) The governmental units administering the system to determine the type, extent and intensity of uses or development allowed in the receiving area, based on the transferable development credits generated from severed and sold development interests; and (d) The holder of a recorded instrument encumbering a lot, parcel or tract from which the record owner proposes to sever development interests for transfer to be given prior written notice of the proposed transaction and to approve or disapprove the transaction. (4) A transferable development credit system must offer: (a) Incentives for a record owner of resource land to voluntarily prohibit or limit development on the resource land and to sell or transfer forgone development to lands within receiving areas. (b) Benefits to landowners by providing monetary compensation for limiting development in sending areas. (c) Benefits to developers by allowing increased development and development incentives in receiving areas. (5) The governmental units administering a transferable development credit system must: (a) Designate sending areas that are chosen to achieve the requirements set forth in this section and the objectives set forth in ORS 94.534. (b) Designate receiving areas that are chosen to achieve the requirements set forth in this section and the objectives set forth in ORS 94.534. (c) Provide development bonuses and incentives to stimulate the demand for the purchase and sale of transferable development credits. (d) Require that the record owner of development interests transferred as development credits from a sending area to a receiving area cause to be recorded, in the deed records of the county in which the sending area is located, a conservation easement that: (A) Limits development of the lot, parcel or tract from which the interests are severed consistent with the transfer; and (B) Names an entity, approved by the governmental units administering the system, as the holder of the conservation easement. (e) Maintain records of: (A) The lots, parcels and tracts from which development interests have been severed; (B) The lots, parcels and tracts to which transferable development credits have been transferred; and (C) The allowable level of use or development for each lot, parcel or tract after a transfer of development credits. (f) Provide periodic summary reports of activities of the system to the department. (6) A receiving area must be composed of land that is within an urban growth boundary or, subject to subsection (7) of this section, within an urban reserve established under ORS 197A.230 to 197A.250 and that is: (a) Appropriate and suitable for development. (b) Not subject to limitations designed to protect natural resources, scenic and historic areas, open spaces or other resources protected under the statewide land use planning goals. (c) Not within an area identified as a priority area for protection in the “Oregon Conservation Strategy” adopted by the State Fish and Wildlife Commission and published by the State Department of Fish and Wildlife in September of 2006. (d) Not within a “Conservation Opportunity Area” identified in the “Oregon Conservation Strategy” adopted by the State Fish and Wildlife Commission and published by the State Department of Fish and Wildlife in September of 2006. (7) Land withi