Sponsoring an Enterprise Zone

Currently, Oregon enterprise zones are sponsored by:

• 2 (out of 9) Indian Tribes,
• 30 (out of 36) counties,
• 11 (out of 23) ports and
• 106 (out of 242) cities.

In addition, four cities, ten ports and a few counties consent to zones within their territory that are sponsored by overlapping jurisdictions.

Designations for Local Governments

Cities, ports and counties across Oregon can seek an enterprise zone whenever there is a round of designation. At present, all such available designations under the law are in existence, so opportunities for a new enterprise zone are limited to those years when any of the 58 existing zones are scheduled to terminate.

The statutes specify the following two criteria for local economic hardship in order for a proposed zone to be designated: (1) Household median income is 80% or less of state median income, or (2) Unemployment rate is 2 percentage points or more above comparable state unemployment rate, based on the most recent annual figures. Business Oregon can consider alternative but equally severe threshold criteria, and defines several by rule.

Each zone terminates at the latest on July 1 after more than 10 years, at which time local governments may reapply to Business Oregon. The director of Business Oregon is responsible for ordering the designation and termination of enterprise zones and for approving changes to zone boundaries. The boundary of a zone may be noncontiguous, but it must not encompass more than 12 square miles (above the high water mark) and must conform to restrictions on distances within the zone.

Role of the Zone Sponsor

Although enterprise zones are largely self-functioning units—and the property tax exemption that they offer is typically automatic—sponsorship of an enterprise zone still entails both responsibilities and opportunities for the zone sponsor. The sponsor may do the following (if there is more than one sponsoring government, they must act jointly in all cases):

• Set policy, filing fees; make plans covering marketing, organization, etc
• Appoint the local zone manager.
• Change the zone boundary: remove areas, add new areas or cosponsors and send request to Business Oregon.
• Implement local incentives for authorized businesses.
• Assist in making publicly-owned real estate within zone available to authorized businesses.
• Elect to terminate the enterprise zone.
• Help businesses use zone and verify compliance by businesses.
• Fulfill arrangements worked out with local taxing districts.
• Enter into written agreements with authorized firms extending exemption for four or five years in total or allowing special long-term rural tax incentives.
• Adopt resolutions to waive a 10% employment increase (stipulating alternative conditions), for existing businesses that invest $25 million or more, or that measurably modernize operations and fund workforce training.

In an urban enterprise zone, the sponsor also may establish local policy and standards for additional, worker-related conditions that are consistently imposed with the standard three-year exemption.