(2) If the director finds that a danger to public health exists because of conditions within the affected territory, the director shall file a certified copy of findings with the city and, except where the condition causing the danger to public health is impure or inadequate domestic water, with the Environmental Quality Commission.

(3) If the director determines that a danger to public health exists because of conditions within only part of the affected territory, the director may, upon petition and hearing, reduce the boundaries of the affected territory to that part of the territory that presents a danger if the area to be excluded would not be surrounded by the affected territory remaining to be annexed and would not be directly served by the sanitary, water or other facilities necessary to remove or alleviate the danger to public health existing within the affected territory remaining to be annexed. The findings shall describe the boundaries of the affected territory as reduced by the director. The director shall file a certified copy of findings with the city and, except where the condition causing the danger to public health is impure or inadequate domestic water, the commission.

(4) In determining whether to exclude any area the director may consider whether or not such exclusion would unduly interfere with the removal or alleviation of the danger to public health in the affected territory remaining to be annexed and whether the exclusion would result in an illogical boundary for the extension of services normally provided by an incorporated city.

(5) The city shall, when requested, aid in the determinations made under subsections (3) and (4) of this section and, if necessary, cause a study to be made.

(6) Notwithstanding ORS 222.111 (3), the director, in implementing an order under ORS 222.840 to 222.915, may allow the use of the tax differential authorized by ORS 222.111 (3) for a period not exceeding 15 years with the consent of the affected city. [1967 c.624 §8; 1973 c.637 §7; 1975 c.639 §6; 1983 c.407 §8; 1989 c.780 §1; 2009 c.595 §185]