Oregon’s Senate Bill 4 Will Empower and Accelerate Semiconductor Growth

By Charles Harrell

In the 2023 legislative session, Oregon passed Senate Bill 4 – a groundbreaking move to bolster its position as a leader in the semiconductor industry and to strengthen the industry within its borders. The legislation empowers the state to designate new sites specifically aimed at fostering semiconductor manufacturing and innovation, an essential sector in today’s digital economy that could herald a new era of economic growth and technological advancement.

Understanding the CHIPS Act

The semiconductor industry is at the forefront of technological innovation, with demand soaring across various sectors, from consumer electronics to automotive manufacturing. In July 2022, the U.S. Congress passed the $52 billion Creating Helpful Incentives to Produce Semiconductors (CHIPS) and Science Act to strengthen domestic semiconductor manufacturing, design, and research; fortify the U.S. economy and national security; and reinforce America’s chip supply chains. The CHIPS Act is part of a broader national strategy to boost semiconductor manufacturing in the U.S., ensuring that the nation remains competitive in this vital field. With increasing demand for semiconductors across various sectors, including technology, automotive, and healthcare, Oregon’s proactive stance is a crucial move to attract investment and talent in this burgeoning industry. By providing incentives for research, development, and manufacturing within the U.S., the CHIPS Act champions innovation and economic stability. Oregon stands to benefit substantially from this initiative, given its established reputation as a hub for technology and semiconductor production.

Senate Bill 4: A State-Level Response

Oregon’s Senate Bill 4 (SB 4) establishes the Oregon CHIPS fund to provide grants and loans to qualifying businesses. It also empowers Governor Tina Kotek with the authority to designate new sites for semiconductor manufacturing, enabling streamlined processes for development and investment. Specifically, on or before December 31, 2024, Governor Kotek can issue an Executive Order to bring within the existing urban growth boundary designated areas for the purposes of providing lands available for industrial use. Governor Kotek may designate up to eight such sites: two that exceed 500 acres in size and six that do not exceed 500 acres in size.

By proactively identifying and promoting locations suitable for semiconductor facilities, SB 4 positions Oregon as an attractive destination for manufacturers looking to capitalize on the CHIPS Act. This strategic move not only aims to attract new businesses but also ensures that existing ones can expand and innovate.

Senate Bill 4: Key Provisions

SB 4 outlines essential frameworks and incentives designed to make Oregon an attractive location for semiconductor companies. Some of the key provisions of the bill include:

  1. Site Designation Authority: SB 4 gives Governor Kotek the authority to identify and designate up to eight specific sites across the state for semiconductor manufacturing. This flexible approach allows for Oregon to respond quickly to the evolving needs of the semiconductor industry and can help streamline the development process.
  2. Financial Incentives for Investment: SB 4 introduces various funding mechanisms, including tax incentives and grants to support businesses involved in semiconductor production and research. This financial support aims to make Oregon more economically attractive to semiconductor manufacturers. Ensuring that the state remains competitive on a national and global scale is critical for luring new companies and encouraging existing firms to expand.
  3. Workforce Development: Recognizing that advanced manufacturing requires a skilled workforce, SB 4 emphasizes the importance of education and training programs in partnership with local colleges and universities to prepare Oregonians for careers in the semiconductor industry. This commitment to workforce development is key to ensuring long-term growth and sustainability.
  4. Environmental Considerations: SB 4 stresses sustainability, ensuring that new semiconductor sites adhere to environmental standards. This focus aligns with Oregon’s commitment to a clean and safe environment while fostering industrial growth.
  5. Collaboration with Industry Stakeholders: SB 4 encourages partnerships between the state, educational institutions, and the semiconductor industry. By fostering collaboration, Oregon aims to drive innovation and enhance technological advancement in semiconductor manufacturing.

The Impact on Oregon’s Economy

The passage of the CHIPS Act and SB 4 is expected to have a profound impact on Oregon’s economy and signals a significant potential for economic growth in Oregon. By cultivating a thriving semiconductor ecosystem, the state can create thousands of well-paying jobs, attract new businesses, bolster research and development initiatives, foster innovations in technology, and catalyze growth in related industries. Furthermore, as the semiconductor industry flourishes, growth has the potential to positively impact local economies through increased investments and improved infrastructure, and the resultant economic activity will benefit local businesses and communities.

SB 4 is a critical step towards securing the state’s future in the rapidly evolving semiconductor landscape. As the demand for semiconductors continues to rise, the strategic initiatives set forth in SB 4 will undoubtedly pave the way for a prosperous and technologically advanced future for Oregonians. As developments unfold, it will be exciting to see how Oregon capitalizes on this momentum, transforming challenges into opportunities within the booming semiconductor industry.

Comment Period on Proposed Urban Growth Boundary Expansion in Hillsboro

Governor Tina Kotek is considering a proposal to bring specific lands into the urban growth boundary near Hillsboro, Oregon to increase competitiveness for semiconductor and advanced manufacturing development, subject to the authority granted to the Governor in Senate Bill 4 (2023) Section 10. The land being considered under this authority is north of the city of Hillsboro. Senator Ron Wyden, Intel, and Hillsboro Mayor Steve Callaway have initially proposed for approximately 1700 acres (located along Highway 26 and Jackson School Road) to be brought into the UGB. However, Governor Kotek’s proposal is for an area approximately 373 acres in size and adjacent to the existing urban growth boundary.

Written comments and statements regarding this proposed expansion can be directed to the Governor’s Office via email at Oregon.CHIPS@oregon.gov or by physical mail to 900 Court Street Suite 255 Salem, OR 97301. The deadline for public comment ends on October 30, 2024 at 5:00 pm.