WaferTech is a semiconductor manufacturer in Camas, Wash., pictured here on Feb. 1, 2023. The company is a wholly owned subsidiary of the chipmaking giant Taiwan Semiconductor Manufacturing Company.
Kate Davidson / OPB
States all over the country are hoping to lure federal money, and semiconductor companies after Congress recently passed the CHIPS bill. In Oregon, lawmakers are considering a major overhaul of longstanding land-use laws to do just that. Duncan Wyse, president of the Oregon Business Council, and Sam Diaz, executive director of 1,000 Friends of Oregon, join us to discuss the changes the Legislature is considering.
Note: The following transcript was created by a computer and edited by a volunteer.
Dave Miller: This is Think Out Loud on OPB. I’m Dave Miller. States all over the country are hoping to lure both federal money and semiconductor companies right now after Congress passed the CHIPS Act. In Oregon, lawmakers are moving forward on a bill aimed at doing just that. It would dedicate $190 million from the general fund to prep sites for potential new facilities. It would also grant Governor Tina Kotek new powers to change land-use designations, meaning she could bring rural land inside urban growth boundaries. Farmers and others say this bill goes too far. Many business boosters say it doesn’t go far enough. We’re going to get two perspectives on this bill and the larger situation right now. Duncan Wyse is the president of the Oregon Business Council. Sam Diaz is the executive director of the land use watchdog group 1,000 Friends of Oregon. Welcome back to both of you.
Duncan Wyse: Thank you.
Sam Diaz: Great to be here.
Miller: Duncan first. We last had you on just over a year ago to talk about luring chip manufacturers to Oregon. That was although before Congress passed this CHIPS act. How has that changed the landscape?
Wyse: Well, it’s been quite a year, Dave. Last February, we were just beginning the semiconductor task force that was chaired by Senator Wyden, the governor, Governor Brown, and Maria Pope from PGE. That task force took a hard look at the opportunity and came up with a five point strategy for taking advantage of the CHIPS act that we anticipated. And the strategy involves education, research, land development, regulatory streamlining and incentives. And then with that task force in hand, Senator Wyden, Representative Bonamici, the whole congressional delegation working together played a huge role in the CHIPS Act passing last summer, enabling over $50 billion dollars of federal dollars to come help create incentives for expansion of semiconductors in America.
Oregon is the leading place in America for advanced design and manufacture of semiconductors. We have an extraordinary opportunity to create a lot of very well paying jobs across the state and really bring a lot of new revenue into the state coffers for all kinds of great services. So a lot’s been going on, the legislature has stepped up, the governor has stepped up and we are really excited about this opportunity.
Miller: The most controversial part of the bill that’s currently under consideration would give the governor, as I noted briefly, new land use powers, I think unprecedented land use powers, at least as the chief executive alone. Can you explain briefly how it would work, [and] what would change?
Wyse: What it allows the governor to do on a very selective basis is to bring land into the urban growth boundary for industrial development for semiconductors exclusively. It’s a very, very surgical piece of legislation, but it does streamline the review and the appeals process so we can move quickly to take advantage of an opportunity that’s staring right in our face. We really need that authority. The governor needs that authority to be able to take advantage of the CHIPS Act.
Miller: Sam, how would what Duncan just outlined be different from the way land use law has worked in Oregon for the last 50 or so years?
Diaz: The focus on the urban growth boundary and the Joint Committee on Semiconductors was really examining, how does the urban growth boundary work? For those who may not know, Oregon is known for the urban growth boundary and it says, here’s the amount of land we need over 20 years, for the types of jobs that we forecast and the population numbers that we get from Portland State University. There’s a lot of data behind where that boundary is put. And then local jurisdictions have the tools, need to have the tools and resources in order to make sure that they are able to build on that land and meet Oregonians needs. And really you talk about, as Duncan said, the great opportunities that can come, that are unanticipated.
Miller: But broadly to balance economic development and jobs and industry on the one hand and maintaining agricultural land on the other.
Diaz: That’s right. Yeah. So our boundaries have really served well for another pillar of our economy which is agriculture and forestry. A lot of folks may know about cross laminated timber, the future of timber products and our watersheds as well, right? You go to Travel Portland, you go to Travel Oregon, you think of any feature promoting Oregon and it’s beauty, and that is top of the list for why people come to visit Portland and really support the tourism industry. So while we’re having a really great discussion about semiconductors, what we’ve really appreciated in the conversation is, let’s take a holistic look at all of the pillars of our economy and make sure that the approach that we take for semiconductors doesn’t have a domino effect on other pillars, right? We don’t harm other really important industries in Oregon.
Miller: Well, the bill as it stands now, would it… I mean, my understanding is 1,000 Friends is neutral on this bill. So, not saying yes, not saying no, which is a careful political position. How did you arrive at that position?
Diaz: Well, I would just say the Joint Committee has been really responsive and legislative leadership and the governor’s office have been very responsive to the hundreds of pieces of testimony that are passionate, that are science based, that are pointing out the success that Oregon has because of our land use system. As Duncan pointed out, we are number one in semiconductor expansion and part of that has to do with our intentional land use planning and the livability that Oregon is able to provide residents. We are an attractive place to call home. And that’s something to be really proud of. And that special advantage is something that we really need to lean into. So when the task force that Duncan talked about last year came together, there was a cry, there was a grave concern that we didn’t have any industrial land inside of our boundaries and we didn’t have any large sites in particular.
Miller: So, there is industrial land, am I right? But the question is, is it big enough for the kinds of fab plants that these companies like to put in now? Is it 1,000 acres as opposed to two or three or even 600? Right? Is that one of the key points here? Just how big the parcel is?
Diaz: Yeah. So I’d say, what’s nice is we definitely both agree on it and we really, I am really appreciative to see the focus and support on the nuts and bolts. We need the readiness dollars inside our boundaries to help cities realize their economic development plans and assemble aggregate, really piece together those industrial lands there. So we have… actually there was a survey done for local jurisdictions, and private property owners. It says we have over 9,000 acres across the state inside our boundaries, zoned industrial, waiting. Waiting for industrial readiness dollars, waiting for a company to call Oregon home, and apply for the CHIPS Act. And that’s great. We’ve heard from the governor’s office that there are eight applications already halfway completed to hit that first deadline in May. So it’s great to see that maybe the land supply isn’t the main problem. Maybe it’s readiness or maybe it’s the R&D tax credit or maybe these, definitely education and workforce need to be elevated. But it seems like when we put this puzzle together, we’re not missing the amount of industrial land.
Miller: Duncan, so let me say this to you and especially so, I mentioned the $190 million which is also included in this bill. It’s not just land use changes, but it’s also a significant amount of state money going for land readiness to make these sites available.
Wyse: No, I need to correct you on that. Those are dollars for companies to apply for, as part of their CHIPS application. This is not for land readiness per say.
Miller: What could those companies use that money for?
Wyse: They could use it for, basically, it’s incentives to decide to develop in Oregon. These are really incentive dollars for the companies. They can use it for workforce development and other purposes, but they will be part of the CHIPS Act. We need, as Sam mentioned, additional dollars, probably state bonding to develop sites that, as Sam mentioned, there are a number of sites in Oregon in the urban growth boundaries that need development, they need infrastructure. But I would, the one thing I do disagree on, we need a large site in Oregon for an advanced fab, that is much larger than is currently available anywhere within the urban growth boundaries.
Miller: When you say that, are you thinking about Washington County?
Wyse: Yes.
Miller: So that really is a place that we’re talking about?
Wyse: So we had a very careful analysis of looking with site developers where it’s feasible to put an advanced fab. And the fact is that Washington County is one of the centers in the world for advanced fab. And that’s where folks want to be because of the talent, because of all the relationships that are there. And we have, we need a parcel that is large enough to, to put an advanced fab, to take advantage of all the other suppliers who would then feed into it, because it’s a whole ecosystem of, of companies, but without space for a new advanced fab, we’re gonna lose a huge opportunity.
Miller: You’ve argued that even though the land use components that changes would streamline some aspects of land use planning law, that there’s still too much possibility for delay even in the streamlined approval process. What’s your argument here?
Wyse: Well, the legislature made changes this week and I think we’re in much better shape. Sam and I, we spent some time over the weekend and I think we’ve made some adjustments that are going to be very helpful. I think the governor now has the authority she needs to surgically find land that will be available that she could use to recruit an advanced fab, a large advanced fab and that’s what we needed and that’s what we asked for.
Miller: So how much appeal possibility would there be? And what’s the time frame? Because that was the key thing that it would take too long, it could be appealed and then the CHIPS money would evaporate.
Wyse: Yeah. The way this is now set up is the governor makes a decision that goes to the Supreme Court.
Miller: And Sam, why is this all right? I mean, I can imagine 25 years ago, 1,000 Friends of Oregon saying no, this is exactly, this is why we formed. You’re biting too much into this prime agricultural land that will never come back. Why are you OK with this?
Diaz: Well, we’re neutral and we had many member conversations. We have a Forestry and Agriculture Advisory Committee and we have local groups, local land use groups, many of them farmers and ranchers and foresters. And what we’re seeing and what the Joint Committee on Semiconductors enabled all of us to see is we have the land, we need the readiness dollars, that is definitely a missing piece of the puzzle. And let’s focus on these opportunities, on these eight active CHIP applications that are already in process, already going to be submitted to the commerce department for federal funding. There’s no question that this is an exciting, once in a lifetime opportunity, and brings high quality jobs to Oregon throughout the state. We’re a statewide organization. So yes, we do zoom in on areas. But what’s really exciting is we see 500 acre sites in Hillsboro, inside the urban growth boundary, in Wilsonville, in Redmond. There’s 180 acres in McMinnville.
And I also want people to view this as an opportunity to also transform some under-used sites. When we think about what COVID did, how it transformed our spaces, commercials down, people shop differently. We know Walmart is leaving Portland, we know there’s a vacant site on 122nd, we know Jantzen Beach is underutilized. And Kimco, the private property owner is saying, hey, we’re here, we would love to be part of this conversation. So it’s really exciting that we have so many of these transformative opportunities for our state, not just in the greater Portland area, but in Redmond, in Rogue Valley. And that said, as a statewide organization, we’re there, we’re neutral and we’re here to really solve problems and bring these high quality jobs across the state to Oregon.
Miller: Duncan, we have one minute left, what else would you like to see in addition to land use changes to bring companies here?
Wyse: Thank you. The agenda is, this bill, SB4 is a great start, but there is more to do. We need money in the university and community college system to advance the talent and research agenda. We need more dollars for industrial readiness, as Sam pointed out, we need bonded funding for that and we need some additional incentives. In particular, the R&D tax credit is a really important part and we have to make sure the Strategic Investment Program and the Enterprise Zone Programs are extended. And so all of that creates what we see as the road map for incredible success in the semiconductor sector and that gives the governor the ability to really move quickly, and we’re excited about that opportunity.
Diaz: If I could just add, I will say there’s $200 million for K-12 Stem Centers in the CHIPS Act. And there’s also 1.4 billion proposed from President Biden to continue that. And as a student, as a kid who grew up in a school that didn’t have these hands-on learning experiences or these opportunities, we’ve been able to see students testify and school district leaders testify to the Joint Committee on bringing that type of opportunity to school districts. I would say let’s really prioritize technical assistance for our school districts to apply for that line item of the CHIPS Act, and make sure that we’re investing in the next generation and that these are opportunities for all.
Miller: Duncan and Sam, thanks very much.
Wyse: Thank you.
Miller: Sam Diaz is the executive director of 1,000 Friends of Oregon. Duncan Wyse is the president of the Oregon Business Council.
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