Oregon semiconductor bill advances, but nobody’s satisfied

Senate Bill 4, now called Oregon CHIPS, advanced on a 12-2 vote out of the Legislature’s newly created semiconductor committee. It includes $200 million in direct funding for chipmakers and $10 million for university research. Those investments are broadly popular in the Capitol.

Semiconductor manufacturing is among Oregon’s largest industries but taxpayer advocates and industry supporters are divided over whether additional legislation should offer tax credits for research and hiring. And there is fierce debate over whether, or how, Oregon should convert rural land near Hillsboro for industrial development.

“I am personally disappointed and disheartened by where we landed, and concerned about land use,” Sen. Janeen Sollman, the semiconductor committee’s co-chair said Wednesday. The Hillsboro Democrat voted in favor of the bill but said lawmakers had strayed from the recommendations issued last summer by a task force of government and business leaders.

SB 4 gives Gov. Tina Kotek extraordinary power to bring rural land into a city’s urban growth boundary for industrial development. Land-conservation advocates say the bill goes too far, rolling back a legislative “grand bargain” from 2014 that had been designed to permanently resolve questions over developable land in Washington County.

But industry supporters say “loopholes” in SB 4 leave it essentially useless at attracting big chipmakers, the legislature’s stated goal. The bill allows the governor to designate industrial land only for specific projects, which creates “an unworkable chicken and egg scenario,” according to Duncan Wyse, president of the Oregon Business Council.

“We do not believe that semiconductor industry firms will be willing to commit to investments without regulatory certainty on land,” Wyse wrote in a letter to the semiconductor committee ahead of Wednesday’s vote. He said lawmakers should give governors the authority to act earlier in the site-selection process.

Further, Wyse said that the bill leaves lengthy appeals processes in place that would leave land in doubt even after the governor acts.

“These provisions create a significant risk of protracted litigation, sending Oregon down the road of years of process and appeals while other states are (putting) dollars, shovels and advanced lithography machines to work,” Wyse wrote.

The two committee members who voted against SB 4 on Wednesday split over the land-use question. Rep. Ed Diehl, R-Salem, said the Legislature should be responsible for choosing industrial sites.

“That’s what the people voted us here to do,” Diehl said. “And they expect us to make those tough decisions and not hand it over to the governor.”

Rep. Bobby Levy, R-Echo, said she wants to prioritize Oregon agriculture. While she said she trusts the governor to choose the right properties for development, Levy said she’s “very concerned about the proper use of land in our state.”

“Oregon agriculture is a very important part of our economic future and our economic stability,” Levy said.

SB 4 now moves to the Joint Committee on Ways and Means, which will revisit the land-use question and other issues. Industry backers hope separate legislation will address tax credits, too, and initiatives to boost research and workforce training for diverse populations at colleges and universities across the state.

Rep. Janelle Bynum, semiconductor committee co-chair, said those are “glaring areas” where SB 4 falls short.

“It’s pretty empty, and I am committed to continuing to work on that,” the Clackamas Democrat said.