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Oregon's $210 million semiconductor bill passes state Senate

A bipartisan group of lawmakers has been working quickly on ways to attract more chip manufacturing to Oregon, capitalizing on the federal CHIPS Act.
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SALEM, Ore. — A bill designed to make Oregon more appealing for semiconductor companies passed the state Senate on Wednesday with bipartisan support. Among other measures, the bill would grant Oregon Gov. Tina Kotek unprecedented powers over the state's land use rules.

Senate Bill 4 passed in a 21-8 vote, with a core group of Republicans — and Republican-turned-independent Sen. Brian Boquist — opposing the bill.

With a full price tag of $210 million, the bill commits $190 million in state funds to support Oregon businesses that apply for funding from the $52 billion federal CHIPS Act, which is the prime mover behind Oregon's bill.

Another $10 million would go to local governments in order to support them in preparing sites for industrial development. The University Innovation Research Fund would also receive $10 million for public universities to leverage federal research grants.

A bipartisan group of Oregon lawmakers has been working since the beginning of the legislative session on ways to incentivize more semiconductor manufacturing in the wake of the CHIPS Act, in hopes that tech companies will expand or establish new facilities in Oregon.

The group's initial findings were dire, suggesting that Oregon lacked the right incentives and enough viable land to attract these facilities. SB 4, the "Oregon CHIPS Bill," represents lawmakers' bid to break down some of those barriers.

“To maintain our position as a leader in the semiconductor industry and protect U.S. national security, Oregon must take steps to improve our competitive footing. SB 4 is our strong start,” said Sen. Mark Meek, a Democrat from Oregon City and member of the Joint Committee on Semiconductors. “With these investments in our semiconductor industry, Oregon will play a major role in keeping our country and our democratic partners around the globe safe.”

According to a study conducted by economic consulting firm ECONorthwest, even one new semiconductor fabrication plant in Oregon could add around 26,000 new jobs and $2.8 billion in net revenue over a 20-year timespan.

But the land issue represents one of the most controversial aspects of the bill. SB 4 would grant Gov. Tina Kotek "limited authority" to bring some plots of land into Oregon's urban growth boundaries, changing land use restrictions by fiat, for the purpose of semiconductors or other advanced manufacturing.

According to Senate Democrats, the bill would allow Kotek to designate up to eight sites — two of them more than 500 acres in size — for manufacturing facilities. The kinds of semiconductor fabrication plants that lawmakers hope to attract can have a footprint of up to 900 acres.

Earlier deliberations by the committee suggest that lawmakers were looking at sites around North Plains and Hillsboro — the only possible locations for 500-acre sites identified in Oregon by a firm commissioned for the search.

“The federal government presented us with an opportunity, and with Senate Bill 4, the legislature delivered,” said Oregon Senate President Rob Wagner, a Democrat from Lake Oswego. “With this bill, local businesses will be able to apply for billions in federal dollars and secure the future of Oregon's semiconductor economy.”

While the bill still needs to pass the state House and gain Gov. Kotek's signature, stakeholders are wasting no time. Business Oregon, the state's economic development agency, put out a call Wednesday for "written interest" from semiconductor firms for the $190 million in CHIPS Act application funding.

"Semiconductor manufacturing is Oregon's largest manufacturing sector in employment, exports, and contribution to state GDP," Business Oregon said in its statement. "Its importance to the state's economy cannot be overstated, and it has played an important role in the growth of software and other technology sectors."

Though the Biden administration opened the window for statements of interest from companies at the end of February, March 31 marks the beginning of the application process for "leading-edge facilities," with a window for other types of facilities beginning May 1.

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