Confusion clouds benefits of enterprise zones.Byline: GUEST VIEWPOINT By Bob Warren For The Register-Guard The debate over how to best manage the west Eugene Eugene, city (1990 pop. 112,669), seat of Lane co., W Oregon, on the Willamette River; inc. 1862. A processing and shipping center in a farming area, the "Emerald City" has lumbering, food-processing, and microchip and other electronics industries. enterprise zone has left many people confused about how enterprise zones work. Implied in this debate is that the enterprise zone program does not have standards. That is an inaccurate perception. To boost local economies, Oregon Oregon, city, United States Oregon, city (1990 pop. 18,334), Lucas co., NW Ohio, a suburb adjacent to Toledo, on Lake Erie; inc. 1958. It is a port with railroad-owned and -operated docks. The city has industries producing oil, chemicals, and metal products. statutes demand that companies receiving enterprise zone benefits make large investments in the communities where they are located, and that they bring significant new employment to those communities in a relatively short span of time. Enterprise zones are designed to encourage local investment by companies in the `traded sector' - businesses that mainly cater to other businesses, including manufacturers, distribution centers and call centers. Traded-sector businesses that choose to locate (or are already located) within an enterprise zone are eligible to apply for property tax abatements. Retail businesses, including `big box' stores and most service-related businesses, do not qualify for enterprise zone benefits. Under state law, companies must do two things to qualify for property tax abatement A reduction, a decrease, or a diminution. The suspension or cessation, in whole or in part, of a continuing charge, such as rent. With respect to estates, an abatement is a proportional diminution or reduction of the monetary legacies, a disposition of property by will, when : 1) invest at least $50,000 in a building or major equipment within the enterprise zone; and 2) increase their employment in the zone by at least 10 percent. If a company applies for tax relief in an enterprise zone and meets both criteria, property taxes are abated Abated, an ancient technical term applied in masonry and metal work to those portions which are sunk beneath the surface, as in inscriptions where the ground is sunk round the letters so as to leave the letters or ornament in relief. From 1911 Encyclopædia Britannica on the company's building/equipment investment for three years. In addition, if a company's average pay and benefits are at least 1 1/2 times the county average, local governments may choose to grant two additional years of tax exemption tax exemption, immunity from the requirement of paying taxes. Federal, state, and usually local law provide exemption from taxation for a wide variety of organizations, usually not-for-profit, such as churches, colleges, universities, health care providers, various . Extending enterprise zone benefits is a discretionary, local decision. In Lane County, a company's average annual pay and benefits would have to be $45,474 or more to be eligible for extended benefits. A firm already located within an enterprise zone can receive tax benefits on new building(s) and equipment related to expansion. Existing companies continue to pay tax on pre-expansion buildings and equipment. Thus, no existing revenues are ever `lost' through the implementation of an enterprise zone. However, tax gains from enterprise zones can be substantial when the tax abatement period expires because, in that year, companies pay full property taxes on all buildings and equipment, including any new investments. If companies do not meet employment requirements, they lose benefits for that year and the remainder of the enterprise zone period. If higher-wage companies fail to meet the additional compensation requirements, they lose their two years of extended tax exemption. Hynix currently pays 6 percent of Eugene's citywide property tax revenues that would not exist if Hynix did not choose to locate in west Eugene in 1995. Keep in mind that, in a technology-driven marketplace, companies can choose to locate almost anywhere without losing market advantage. In the current competitive environment for new business - in which government incentives are the norm and even required for municipalities to be considered - it is unlikely Hynix would have located in west Eugene without the enterprise zone in place. Without Hynix, the community would not only have lost direct tax revenues, but also the substantial economic stimulus stimulus /stim·u·lus/ (stim´u-lus) pl. stim´uli [L.] any agent, act, or influence which produces functional or trophic reaction in a receptor or an irritable tissue. of Hynix employees' personal taxes and local spending. Attracting and supporting businesses such as Hynix that make large local investments, even with temporary tax abatement incentives, does more to sustain the community than no business at all. Gov. Ted Kulongoski Theodore R. "Ted" Kulongoski (born November 5 1940, in rural Missouri[1]) is an American Democratic politician. Since 2003, he has served as the Governor of Oregon. He was re-elected in 2006. , by signing House Bill 3143 this week (the bill expands Oregon's enterprise zone program by 10 more zones) is to be commended for his forward-thinking approach to long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. investment in Oregon communities. Oregon's enterprise zone program was created by the Legislature with simplicity in mind. They are designed to require minimal administration at the local level. State law does allow local zone sponsors to adopt `reasonable additional standards' regarding pay, benefits and working conditions to suit their needs. But for many localities, the cost of administering local rules - i.e., the additional staff and resources needed to report on, verify (1) To prove the correctness of data. (2) In data entry operations, to compare the keystrokes of a second operator with the data entered by the first operator to ensure that the data were typed in accurately. See validate. and enforce community standards Community standards are local norms bounding acceptable conduct. Sometimes these standards can itemized in a list that states the community's values and sets guidelines for participation in the community. - can exceed the benefits of the zone. That may be one reason why few enterprise zones (only two of 49, including west Eugene) have adopted local conditions. Such standards necessarily add administrative burden, which may diminish an enterprise zone's overall benefit to the community. Bob Warren is business development officer for the Oregon Economic & Community Development Department in Benton, Lane, Lincoln Lincoln, city and district, England Lincoln, city (1991 pop. 79,980) and district, Lincolnshire, E England, in the Parts of Kesteven, on the Witham River. , Linn counties Linn County is the name of four counties in the United States:
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