Oregon House OKs semiconductor aid plan

By PETER WONG
Oregon Capital Bureau

The House gave final legislative approval on Thursday to Oregon’s $200 million-plus bid for a share of the billions available in federal incentive to boost domestic semiconductor manufacturing.

The 44-10 vote sent Senate Bill 4 for the signature of Gov. Tina Kotek, a day after she and key federal and state legislators joined high-tech executives, educators and students to meet with U.S. Commerce Secretary Gina Raimondo in Hillsboro. It has been a key early-session priority for Kotek, who proposed the money in her two-year budget, and legislative leaders from both parties. The Senate approved it, 21-8, on March 29.

Raimondo will decide which states get some of the $52 billion available, plus $200 billion more for scientific and technological research provided for in the CHIPS and Science Act that President Joe Biden signed last year.

Though she was careful not to take sides, the former governor of Rhode Island did tell reporters afterward there is a lot to like about Oregon’s plan – including the fact that it is a state with a plan – as she decides on how and where the federal incentives can best boost the nation’s future economy and security. Many semiconductors, and most of the advanced ones, are made in Taiwan, which China regards as a renegade province and has threatened to use military force against it. Other leading producers are South Korea, Japan and Singapore.

“This is about America leading the world, securing our future, our national security,” Raimondo said. “It’s about being a global leader in technology and innovation. That is what we are talking about here.”

Oregon already accounts for 15% of the nation’s semiconductor manufacturing workforce, its 40,300 workers trailing only California and Texas. Oregon’s largest private employer is Intel, the California company that has more than 20,000 workers at four plants in Aloha and Hillsboro and its advanced research-and-development plant. A network of suppliers has emerged from Intel and other chip producers.

“Oregon CHIPS is a once-in-a-generation opportunity to solidify our status as a global leader in semiconductor production and advanced manufacturing,” said Rep. Janelle Bynum, a Democrat from Clackamas who is the House co-chair of the joint committee that came up with the legislation, and who is an electrical engineer by training.

What it does

The key elements of Oregon’s plan for CHIPS (Creating Helpful Incentives for Producing Semiconductors):

• $190 million for businesses and others seeking a share of federal incentives for domestic semiconductor manufacturing. The Business Development Department would administer the state money, and for each $1 million granted, a business would have to show a minimum return of $1 million or $1.5 million in state and local revenue, with five years as the dividing line. The bill also specifies that two-thirds of the newly created jobs be at the area median income, which for the Portland metro area would top $70,000. If a state grant exceeds $50 million, Kotek would have 30 days to inform lawmakers.
• $10 million for universities to match federal grants for innovative research.
• $10 million for a loan fund to help local governments develop industrial sites.

 

The top House Republican on the joint committee was Rep. Kim Wallan of Medford, who also praised the bill.

“Oregon is the No. 3 producer of semiconductors in the world and the No. 1 developer of new technology in this industry,” she said. “It is vital to our economic and national security that we do everything we can to secure Oregon’s position as a global leader in advanced manufacturing. I am thrilled to see this act pass out of the Legislature and look forward to seeing it signed into law.”

Supersiting authority

The bill also contains a much-debated provision that empowers Kotek, after public meetings in the nearest cities and 20 days of public comments, to redraw urban growth boundaries of cities to allow for eight industrial sites. Two sites must be at least 500 acres each, and six smaller sites, suitable for semiconductor or other advanced manufacturing. A semiconductor fabrication plant usually requires a large site.

Legal challenges to either the procedure or the governor’s executive orders would go directly to the Oregon Supreme Court within 60 days, and the justices would have to give priority in deciding such challenges.

It would be the first time under Oregon’s land use planning law, which was passed 50 years ago, that the governor would get such supersiting authority.

Senate Republican Leader Tim Knopp of Bend, who sat on both the joint committee and a task force last summer that came up with the framework for the plan in Senate Bill 4, said the supersiting authority is necessary to identify the two large sites. He said it is likely that the six smaller sites can be found within the existing urban growth boundaries of cities, though he said they still will undergo an assessment to determine their readiness for development.

“Oregon CHIPS will be a historic accomplishment when it comes to keeping Oregon’s economy stable and competitive in the 21st century,” said Rep. David Gomberg, a Democrat from the central coast who sat on the joint committee and also co-led the budget subcommittee that reviewed the legislation.

Of the 35 Democrats, only Rep. Farrah Chaichi of Beaverton voted against the bill; two others were absent. Nine of the 25 Republicans voted no; four others were absent.