The Oregon Senate on Wednesday passed a $210 million bill to increase the state's semiconductor industry. (File photo by Amanda Loman/Oregon Capital Chronicle)

The state Senate last week passed the Oregon CHIPS Act, a move intended to bolster the state’s ability to compete for semiconductor projects and federal money to expand the sector in the state. 

Senate Bill 4 would put $210 million toward giving Oregon a competitive edge and make the state a bigger player for research and manufacturing projects in the semiconductor industry, potentially bringing thousands of jobs to the state and pumping more money into the economy and government budgets for mental health, housing and other services. 

The biggest share, $190 million, would pay for grants and loans for semiconductor companies seeking federal funding to expand in Oregon. 

The Senate passed the bill with a 21-8 vote and bipartisan support and sponsors, including Sens. Janeen Sollman, D-Hillsboro, and Senate Minority Leader Tim Knopp, R-Bend. The measure still faces a vote in the House.

“What a great win,” Senate President Rob Wagner, D-Lake Oswego, told Sollman, hugging her after its passage.

Supporters consider the bill to be critical to Oregon’s future in the industry. Besides money, it provides tools to navigate Oregon’s complex land use laws more efficiently.

The proposal would give Gov. Tina Kotek the authority to designate some land outside urban growth boundaries, the invisible line that limits where cities can expand, as industrial land for annexation by cities. In particular, Hillsboro is seeking to add hundreds of acres of land near its northwest corner, creating a roughly 800-acre plot that could be used for a major manufacturing facility, or fab. 

Semiconductors are one of the largest industries in Oregon – and the high-tech companies are a target for economic development officials across the state.

“These are tomorrow’s jobs,” Sollman said in an interview with the Capital Chronicle after the hearing. “These are jobs that can lift families from poverty to prosperity. We heard it over and over again in our hearings.”

Semiconductors are building blocks in society, driving cybersecurity, classified military technology and everyday devices like refrigerators, medical equipment and cars.

“What this does, honestly, is it doubles down on the future, and the future, there’s no question, is high-tech semiconductors and these high-paying jobs,” Knopp said in an interview. “And that’s why I think it’s important for Oregon to keep its dominance in this area.”

Earlier this month, a bipartisan, bicameral 14-member committee endorsed the bill, part of its work to make Oregon competitive for the nearly $53 billion in grants and tax credits the U.S. Department of Commerce will begin providing this year for semiconductor research and manufacturing because of the federal CHIPS and Science Act. Congress passed that act last year.

While the bill is the Legislature’s main response to the federal law, it fits within a patchwork of other proposals and recent efforts that address semiconductor industry needs. Examples include last year’s $200 million workforce training plan, which focuses on jobs in manufacturing and health care, as well as pending legislation to expand broadband, build more homes and make child care more affordable and available. 

Separately, Kotek last month announced a $1 million grant program to help small and mid-sized firms prepare applications for federal funding. The state agency Business Oregon will run that grant program, and it plans to post updates online once it finalizes rules for the grants.

More than 40,000 Oregonians work in the semiconductor industry – only California and Texas have more residents employed by the industry. About 15% of the nation’s semiconductor workforce is in Oregon, though only about 1.3% of the U.S. population lives here. 

About half of Oregon’s semiconductor employees work at Intel, the state’s largest private employer with nearly 22,000 employees in Washington County. Intel has suppliers in 15 of Oregon’s 36 counties. 

Sen. Fred Girod, R-Stayton, was among the eight senators who opposed the bill. The seven other opponents included six Republicans and Sen. Brian Boquist, an Independent from Dallas.

The only member of the budget-writing Joint Ways and Means Committee to oppose the proposal’s funding, Girod said lawmakers shouldn’t commit to the funding ahead of the May revenue forecast. 

“We have no idea the exact amount of money we have to budget here,” Girod said. “If we have a big cut in the May forecast, that austere budget is going to get ugly.”

The bill is  not the only legislation on semiconductors this session. Another bill in the works would create incentives for companies to conduct research and development.

Oregon Capital Chronicle

Oregon Capital Chronicle is part of States Newsroom, a network of news bureaus supported by grants and a coalition of donors as a 501c(3) public charity. Oregon Capital Chronicle maintains editorial independence. Contact Editor Lynne Terry for questions: Follow Oregon Capital Chronicle on Facebook and Twitter.

Ben Botkin, Oregon Capital Chronicle

Ben Botkin covers justice, health and social services issues for the Oregon Capital Chronicle. He has been a reporter since 2003, when he drove from his Midwest locale to Idaho for his first journalism job. He has written extensively about politics and state agencies in Idaho, Nevada and Oregon. Most recently, he covered health care and the Oregon Legislature for The Lund Report.