Oregon lawmakers heard hours of arguments on Monday for and against a contentious bill aimed at attracting more tech companies in Hillsboro.
A bipartisan group of lawmakers says the state needs more industrial land - and tax incentives - to stay competitive and attract more advanced manufacturing jobs. They’re again eyeing acreage north of Hillsboro that’s been at the center of a yearslong conflict over farmland becoming industrial sites.
FILE - Intel’s Jones Farm Campus in Hillsboro, Ore., July 8, 2025.
Morgan Barnaby / OPB
Land conservation watchdogs and some residents say the bill would invite tech companies and power-hungry data centers to pave over some of the best agricultural soils in the Willamette Valley.
“In my area speculators are pricing farmers out, making it nearly impossible for successful farms like mine to expand,” Hillsboro farmer Aaron Nichols said at a senate committee hearing Monday. “Should this development come to pass, it would be far worse.”
Senate Bill 1586 would expand government tax credits for semiconductor and biotech manufacturers to house research and development facilities, if they meet certain criteria.
The bill would also bring in 373 acres of rural land north of Hillsboro into the city’s urban growth boundary for advanced technology industries, and re-zone some 1,400 acres to develop for industrial use within 50 years.
Backers of the bill say Oregon is lagging behind other states on advanced manufacturing and semiconductor job growth. They say the state must do everything it can now to keep Oregon’s future economy viable.
“If we don’t figure out how to grow very modestly in this state, our future economy is going to feel that,” said state Sen. Janeen Sollman, D-Hillsboro, who has repeatedly introduced similar legislation to open up more land for industrial development in Hillsboro.
Elected officials and business leaders have long eyed this specific tract, which is directly south of U.S. Highway 26, because of its close proximity to other semiconductor manufacturing and supply chain businesses.
This is the same land Gov. Tina Kotek considered bringing into the growth boundary in 2024, through a temporary and controversial authority lawmakers granted her during that year’s legislative session.
Kotek ultimately backed off the idea after the state failed to land a federal research hub designation that would’ve brought with it more federal funds for semiconductor research and development.
Usually, expanding urban boundaries into rural farmland is a lengthy process that involves input from the public. SB 1586 would override that process.
Hillsboro Mayor Beach Pace told lawmakers at the hearing that “few sites in Oregon have been studied more thoroughly and none are more ready and better positioned to immediately help the state’s economic recovery.”
“These lands have gone through nearly 20 years of review, regional planning, legislative actions, task force work, multiple hearings and a public hearings in Hillsboro,” Pace said.
The bill would effectively undo a deal from 2014, when Hillsboro city officials agreed to reserve the land for farm purposes for five decades, while designating 1,000 acres elsewhere for industrial use.
The bill’s language would not allow “stand-alone” data centers to be built on the proposed land, unless they are an “accessory” or part of a logistics warehouse, manufacturing or technology and research facility.
The bill courts industry giants like Intel, one of the world’s largest manufacturers of computer chips, and Genentech, a biotechnology company with a 75-acre campus in Hillsboro.
Sollman said it’s not realistic for lawmakers to “say no” to data centers entirely because they are often a key component of technology industries.
“If we wanted to attract a large semiconductor or biotech company, it wouldn’t work for their business model,” she said.
But opponents are skeptical the bill would do enough to check data center development.
“There’s no limitation on the number of data centers, acreage or percentage of the land in data centers [in the bill],” said Nellie McAdams, the executive director of Oregon Agricultural Trust.
“As long as they are attached to some other facility of any other size the land surrounding it could be data centers.”
Oregon has already received roughly $1.3 billion in federal dollars for semiconductor industries and research, and it’s done so without having to expand until rural lands, McAdams said.
FILE - Local residents, farmers and environmental and land and conservation groups rallied outside the Hillsboro Civic Center in opposition of Gov. Tina Kotek's proposal to bring rural land into the city's urban growth boundary, Oct. 10, 2024.
Alejandro Figueroa / OPB
Land conservation groups have criticized Hillsboro for permitting data centers that they say provide few jobs across the city. An industry group’s map suggests there are about 14 data centers across the city, but because one site can include multiple buildings, there could be more. Land policy watchdogs say there are nearly 30 in Hillsboro.
Landowners unified under the Northwest Hillsboro Alliance have long lobbied elected officials in favor of development. They say the land around them is no longer appropriate for farming as more urban uses have encroached around them.
Data center industries are booming nationwide, especially as demand for artificial intelligence rises. Many environmental and conservation advocacy groups worry that could come at the cost of the environment, wildlife and the needs of local residents and businesses across Oregon, not just west of the Cascades.
In Oregon, utility watchdogs have accused power companies of shifting the long-term costs to residential customers. In The Dalles, local elected officials are laying the groundwork to pull more water from Mount Hood forest, while denying the quest for water is motivated by Google data centers expanding in the region
Legislators were unable to get through a long list of submitted public testimony for SB 1586 Monday. Most of the written testimony the bill has received comes from the opposition. Lawmakers will revisit the bill Wednesday.
