(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 195.137 to 195.145 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 within an urban reserve:
(a) May be the site of a receiving area only if:
(A) The receiving area is likely to be brought within an urban growth boundary at the next periodic review under ORS 197.628 to 197.651 or legislative review under ORS 197.626; and
(B) Development pursuant to the transferable development credits is allowed only after the receiving area is brought within an urban growth boundary.
(b) That is selected for use as a receiving area may be designated for priority inclusion in the urban growth boundary, when the urban growth boundary is amended, if the land qualifies under the boundary location factors in a goal relating to urbanization.
(8) The governing body of a governmental unit administering a transferable development credit system may, directly or indirectly through a contract with a nonprofit corporation, establish a transferable development credit bank to facilitate:
(a) Buying severable development interests from lots, parcels or tracts of resource land in a sending area.
(b) Selling transferable development credits to potential developers of lots, parcels or tracts in a receiving area.
(c) Entering into agreements or contracts and performing acts necessary, convenient or desirable to achieve the requirements set forth in this section and the objectives set forth in ORS 94.534.
(d) Managing funds available for the purchase and sale of transferable development credits.
(e) Authorizing and monitoring expenditures associated with the system.
(f) Maintaining records of the transactions, including dates, purchase amounts and locations of severed development interests and development pursuant to transferred development credits, that are sufficient to manage and evaluate the effectiveness of the system.
(g) Providing periodic summary reports of activities of the system to the governing body of a governmental unit administering the system.
(h) Obtaining appraisals of development interests and transferable development credits as necessary and pricing transferable development credits for purchase or sale.
(i) Serving as a clearinghouse and information source for buyers and sellers of transferable development credits.
(j) Accepting donations of transferable development credits.
(k) Soliciting and receiving grant funds for the implementation of this section and ORS 94.536.
(9) A holder of a conservation easement shall hold, monitor and enforce the conservation easement to ensure that lands in sending areas do not retain development credits transferred under this section and ORS 94.536. [2009 c.504 §3; 2010 c.5 §2]
Note: See note under 94.534.