Article | by Geffen Mesher

Businesses evaluating Oregon expansion, manufacturing investments, or large-scale development projects may find new opportunities under recent changes to the state’s Enterprise Zone program. Oregon House Bill 4084 significantly expands local flexibility in how enterprise zones are established and administered, potentially opening the door to projects that may not have qualified under previous rules. These updates took effect June 5, 2026, under temporary rules, with permanent guidance expected by December 1, 2026. There are currently 73 enterprise zones across Oregon – 55 rural and 18 urban – and local governments are responsible for creating, amending, managing, and renewing most of these zones until June 30, 2032.

What Has Changed

One of the most significant shifts is how enterprise zones are defined and justified. Historically, eligibility was tied closely to census tract data and standardized measures of economic hardship. That approach has been replaced with a more flexible, locally driven needs-based model. Communities now have greater control over defining what areas qualify and why. Instead of relying strictly on census boundaries, local sponsors can establish a “local area” that reflects the actual economic footprint of a project, supported by relevant data. Areas can now qualify based on economic transition, redevelopment opportunities, alignment with regional strategies, or the potential to support emerging industries. The program is moving toward a performance-based development approach that prioritizes measurable outcomes, including investment activity, wage levels, and workforce development.

The bill also introduces more flexibility in how businesses satisfy ongoing requirements. Local sponsors now have the ability to expand eligible industries when those industries are part of a broader economic development strategy, creating opportunities for businesses that may not have fit neatly into the program before, including those in research and development. Activities that were previously considered ineligible may be able to be brought in through a one-time waiver for a specific project or through a pilot program that allows similar projects on a broader basis. In both cases, there must be a clear community benefit or alignment with economic development goals, and approvals must go through both the local jurisdiction and Business Oregon.

For larger or more impactful projects, there is now the potential to extend property tax abatements for up to ten years. Local jurisdictions may choose to offer these longer exemptions if a project involves significant investment, supports regional economic goals, or otherwise provides meaningful community benefit. The approval process and requirements, including written agreements and wage thresholds, are largely consistent with what existed before. This could be especially valuable for businesses with longer development timelines or substantial capital investments, particularly manufacturers and other capital-intensive operations.

The bill also gives local sponsors and businesses additional options for demonstrating compliance with exemption requirements during the  period. Rather than relying solely on strict hiring targets, businesses and local sponsors can now agree to alternative performance measures in certain situations. For example, job retention or increasing wages in place of traditional headcount growth. There is also the option to phase in hiring over time. These terms must be clearly documented upfront through written agreements that define how and when the performance measures will be met. That flexibility, however, comes with a stronger emphasis on accountability. If benchmarks are not met, the exemption can be revoked, making careful agreement structuring essential to protecting the investment.

While the program is becoming more flexible in many areas, data centers are facing additional restrictions. A temporary moratorium on data centers in the standard Enterprise Zone program took effect in June 2026 and is expected to remain in place until after the 2027 legislative session, consistent with the timing established under HB 4084. Data centers are also permanently excluded from certain benefits, including extended abatements and some of the flexible performance options described above.

What to Expect Next

The program is currently operating under temporary administrative rules. Through the summer, public comment and multiple stakeholder engagement sessions will be held to refine those rules, with final guidance expected to be in place by December 1, 2026. Businesses should anticipate updated forms and additional guidance as that process concludes. Given that the rules are still being finalized, staying closely connected with qualified advisors throughout this period is more important than ever.

Planning Ahead

Overall, HB 4084 makes the Enterprise Zone program more adaptable and potentially more accessible for a wider range of projects. At the same time, it introduces more variables into the process, particularly around local decision-making and negotiated performance terms. For businesses with Oregon projects on the horizon, early planning and coordination will matter more than ever. There are real opportunities to tailor the program to a specific situation, but doing so will require a thoughtful approach to structuring agreements and aligning with local priorities.

Because local governments now play a larger role in defining eligible areas, evaluating industries, and establishing performance agreements, businesses should engage local sponsors early in the site selection and project planning process. Early coordination may help identify opportunities that were not available under the previous program structure.

Geffen Mesher’s team is here to monitor these changes and to help businesses think through how these changes may affect them and plan accordingly. Contact us to start the conversation.

Additional information can be found at Business Oregon Enterprise Zones.

About Geffen Mesher: Geffen Mesher is a Portland-based CPA and advisory firm with more than 90 years of experience serving businesses, families, and investors across the Pacific Northwest. We provide ongoing financial strategy, accounting, and tax advisory services for businesses and individuals across a wide range of industries. Learn more at gmco.com.

Geffen Mesher’s team is available to assist you with questions related to these updated rules. Please contact professionals for more information at INFO@GMCO.COM.