Nike employs thousands of people in Oregon, many of them at its headquarters in relatively high-wage jobs, including legal, design, sales, information technology and corporate strategy.
Company officials have been mum about their expansion plans, refusing to say where they'll build or what the new workers will do.
The company's presence near Beaverton, a Portland suburb, has helped make the area a hub for athletic and outdoor apparel companies. Columbia Sportswear's global headquarters is in Beaverton, and Adidas has its North American headquarters in Portland.
Nike has deep roots in Oregon, where it was created in the 1960s by a former middle-distance runner and his college track coach. Together, Phil Knight and Bill Bowerman built the company into one of the globe's most influential brands.
Knight also is the largest contributor to University of Oregon athletics, and his money is considered a key factor in vaulting the school's football program into national prominence.
Kitzhaber has said Nike approached his staff about a month ago, saying the company was being courted by other states but would expand in Oregon if officials promised to keep in place the substantial tax benefits for companies that employ many people in Oregon but sell most of their goods elsewhere.
The legislation passed Friday would authorize the governor to give Nike that promise for up to 30 years.
A handful of people opposed to the legislation set up anti-Nike signs in front of the Capitol as lawmakers met inside.
"You cannot do this in such a rushed manner, and this is just not an emergency," Susan Barrett of Portland told lawmakers.