Kotek proposes $200 million for semiconductor plan

By PETER WONG
Oregon Capital Bureau

Gov. Tina Kotek has proposed $200 million toward Oregon’s probable bid for federal money to promote domestic manufacturing of semiconductors and advanced research into science and technology.

The money, in the form of Oregon Lottery funds, is included in her recommended state budget for the two years starting July 1. Though she did not single it out as one of her three top priorities, Kotek said the money is among her other policy initiatives.

Kotek mentioned it to reporters at a budget press conference Jan. 31 – one day before the legal deadline for a new governor to submit budget recommendations – and at a follow-up session with reporters afterward.

A joint legislative committee will focus on details of Oregon’s plan as the U.S. Department of Commerce writes rules for distribution of the $52 billion to spur domestic semiconductor manufacturing and $200 billion for scientific research that is not limited to new technologies. A total of $280 billion was authorized in the CHIPS and Science Act that President Joe Biden signed on Aug. 9.

The rules are expected to be released soon, and the federal agency will accept applications afterward.

Kotek had mentioned the $200 million figure on Dec. 12, when she met with reporters after remarks to the 2022 Oregon Business Plan summit at the Oregon Convention Center in Portland.

She told reporters that she will leave it to the legislative committee, which first met Jan. 18, to fashion the details of any Oregon plan that will be competitive with other states. But she also said she isn’t wedded to semiconductor manufacturing, and she wants the Oregon Business Development Department, which would receive the $200 million, to consider help for small and mid-sized businesses that may seek a share of that federal money.

“Semiconductor folks are out of the gate first. But we need to support advance manufacturing writ large in our state. I am focused on supporting our in-state employers … people who are already here,” she said.

“It is a clear signal from my administration that we take this opportunity seriously and that we are trying to help people who make applications.”

House Speaker Dan Rayfield told reporters afterward that a state plan for semiconductors, plus Kotek’s request for $133 million to deal with immediate needs of unhoused people, will be fast-track items for lawmakers early in the session. The 160-day session is scheduled to end by June 25.

“We have a unique opportunity to make investments… to mitigate the effects of a potential slowdown” in Oregon’s economy, the Democrat from Corvallis said.

Obstacles to a plan

At its initial meeting Jan. 18, lawmakers on the committee heard potential obstacles to a plan: What form financial incentives should take, and a lack of readily available industrial sites.

A task force report released last summer said that Oregon ought to have at least two large sites, each 500 acres or more; four medium sites, each between 80 and 100 acres, and eight sites, each between 15 and 35 acres. “Available” includes ready access to services such as power, water and sewer lines, and streets.

Based on company searches during the past couple of years, Duncan Wyse – whose Oregon Business Council did the staff work for the task force – said no large sites are available.

Two potential large sites could be available in Hillsboro and North Plains, though neither meets the standards in the task force report.

Hillsboro and Aloha already have four plants by Intel, the California-based company that is Oregon’s largest private employer with more than 20,000 employees. Intel’s initial investment in Oregon goes back to 1974. Intel opened an advanced facility for research and development last year at Ronler Acres in Hillsboro, but according to news reports, it has decided against proceeding with another major “mega lab” at $700 million at its Jones Farm site in Hillsboro.

North Plains has a pending request to the state Land Conservation and Development Commission to expand its urban growth boundary by more than 500 acres for industrial and other purposes. Mayor Teri Lenahan filed a letter with the legislative committee about the city’s plan.

“We are at a point in our growth where we do not have any more land,” Lenahan told reporters Jan. 25 at a League of Oregon Cities event. “We feel it is our time to look to the future and expand our urban growth boundary.”

Although other land appears open in Washington County, the Legislature put much farmland off-limits to development in 2014 as part of legislation that otherwise wrote its urban growth boundary expansion into law.

Lawmakers acted soon after a decision by the Oregon Court of Appeals called into question the ways the county designated rural reserves, which are generally closed to development for 50 years. The alternative to legislation was additional time, probably years, required for the county and the Metro regional agency to redo the process.