Oregon lawmakers finalize plans to pay for I-5 bridge, give tax breaks to semiconductor companies – Oregon Capital Chronicle

Tens of thousands of people use the Interstate 5 bridge every day. (Courtesy of Interstate Bridge Replacement Program)
Legislative plans for a research tax credit for the semiconductor industry and paying Oregon’s share of a multibillion-dollar bridge over the Columbia River took shape Tuesday.
Bridge funding and the tax breaks were in a group of bills approved by committees on Tuesday and expected to come up for votes in the House and Senate during the next few days. They’re two of the biggest issues left for lawmakers to tackle during the mad dash to a June 25 deadline to adjourn, as Oregon tries to compete with other states for federal funding for the semiconductor industry and infrastructure. 
What a replacement bridge connecting Oregon and Washington on Interstate 5 should look like and how to pay for it have proved to be major sticking points this session. A handful of progressive Democratic legislators and climate activists opposed plans they said would result in an unwanted freeway expansion, while some Republicans balked over the bridge’s cost and others over proposals to limit construction contracts to unionized companies. 
That division resulted in the Legislature’s transportation committee ending its work earlier this spring without a plan to pay for Oregon’s share of the bridge replacement. It is estimated to cost between $5 billion and $7.5 billion, and officials hope to receive some funding from the 2021 Infrastructure and Jobs Act. 
Washington has committed $1 billion. The proposal approved by the Legislature’s Capital Construction and Joint Ways and Means committees on Tuesday calls for the state to issue $250 million in general obligation bonds, repaid from the General Fund, as a down payment on Oregon’s portion. 
Legislators expect to contribute the remaining $750 million over the next several years, but that funding may not come from bonds. House Speaker Dan Rayfield, D-Corvallis, said plans are purposefully flexible to allow the bridge project leaders to demonstrate the state’s commitment to the project while seeking federal funding as legislators identify other sources of money. 
For instance, lawmakers expect to pass another big transportation funding package within the next few years, following up on the $5.3 billion roads bill passed in 2017 A new funding package could include money for the I-5 bridge. 
Oregon’s and Washington’s commitments could change depending on federal funding and the bridge design. 
“This is not the last time the Legislature will be talking about the bridge,” Rayfield said. 
The vote in favor of the bridge funding bill sparked a minor uproar in a committee hearing Tuesday morning, as an audience member wearing a T-shirt and top hat labeled with “climate arson” called out “You guys are climate arsonists,” referring to the impact of vehicle emissions on global warming. Committee co-chair Fred Girod, R-Stayton, asked Capitol security to remove the man, who initially refused and said he would have to be dragged out until an Oregon State Police officer persuaded him to step outside. 
Lawmakers also reached an agreement on a new tax credit for the semiconductor industry, building on a $210 million investment the state made earlier this year. The new tax credits are intended to give Oregon a leg up in competing for some of the $52 billion in federal funding made available by last year’s CHIPS and Science Act.
Oregon hasn’t offered a research and development tax credit for several years, but business leaders said it was necessary to help Oregon compete against other states, including Arizona, Texas and Ohio. 
Under the proposal, semiconductor companies could receive a 15% tax credit for research done in Oregon, with a maximum credit per company up to $4 million annually. Companies could receive between 25% and 75% of the credit as a refund depending on their size. 
The tax credit per company is lower than the $10 million considered in an earlier proposal, but the total amount of tax credits could be higher. Over the next four budget cycles, the proposal would allow the state to give up between $35 million and $90 million in tax revenue per budget period. 
The proposal also would extend until 2032 a planned 2025 sunset for enterprise zones, or areas where new or expanding businesses don’t have to pay local property taxes for several years. Local governments are responsible for designating enterprise zones.
“I think all in all this package sends a strong signal that in Oregon we can offer strong incentive packages Oregon’s way that is still competitive on a national scale,” said Rep. Nancy Nathanson, a Eugene Democrat and chair of the joint tax committee. 
Sen. Mark Meek, D-Gladstone, said lawmakers plan to revisit the tax credit in the 2024 legislative session after seeing how companies use it. 
“While we may not be the best research and development tax credit in the United States, we are competitive and we are doing our best,” Meek said. Critics say tax credits don’t actually drive research and are a gift to industry.
A separate bill approved by legislative committees Tuesday set aside an additional $50 million that the Oregon Business Development Department could use to grow the semiconductor industry. That money would revert back to the General Fund if it isn’t spent by Dec. 1, 2024. 
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by Julia Shumway, Oregon Capital Chronicle
June 20, 2023
by Julia Shumway, Oregon Capital Chronicle
June 20, 2023
Legislative plans for a research tax credit for the semiconductor industry and paying Oregon’s share of a multibillion-dollar bridge over the Columbia River took shape Tuesday.
Bridge funding and the tax breaks were in a group of bills approved by committees on Tuesday and expected to come up for votes in the House and Senate during the next few days. They’re two of the biggest issues left for lawmakers to tackle during the mad dash to a June 25 deadline to adjourn, as Oregon tries to compete with other states for federal funding for the semiconductor industry and infrastructure. 
What a replacement bridge connecting Oregon and Washington on Interstate 5 should look like and how to pay for it have proved to be major sticking points this session. A handful of progressive Democratic legislators and climate activists opposed plans they said would result in an unwanted freeway expansion, while some Republicans balked over the bridge’s cost and others over proposals to limit construction contracts to unionized companies. 
That division resulted in the Legislature’s transportation committee ending its work earlier this spring without a plan to pay for Oregon’s share of the bridge replacement. It is estimated to cost between $5 billion and $7.5 billion, and officials hope to receive some funding from the 2021 Infrastructure and Jobs Act. 
Washington has committed $1 billion. The proposal approved by the Legislature’s Capital Construction and Joint Ways and Means committees on Tuesday calls for the state to issue $250 million in general obligation bonds, repaid from the General Fund, as a down payment on Oregon’s portion. 
Legislators expect to contribute the remaining $750 million over the next several years, but that funding may not come from bonds. House Speaker Dan Rayfield, D-Corvallis, said plans are purposefully flexible to allow the bridge project leaders to demonstrate the state’s commitment to the project while seeking federal funding as legislators identify other sources of money. 
For instance, lawmakers expect to pass another big transportation funding package within the next few years, following up on the $5.3 billion roads bill passed in 2017 A new funding package could include money for the I-5 bridge. 
Oregon’s and Washington’s commitments could change depending on federal funding and the bridge design. 
“This is not the last time the Legislature will be talking about the bridge,” Rayfield said. 
The vote in favor of the bridge funding bill sparked a minor uproar in a committee hearing Tuesday morning, as an audience member wearing a T-shirt and top hat labeled with “climate arson” called out “You guys are climate arsonists,” referring to the impact of vehicle emissions on global warming. Committee co-chair Fred Girod, R-Stayton, asked Capitol security to remove the man, who initially refused and said he would have to be dragged out until an Oregon State Police officer persuaded him to step outside. 
Lawmakers also reached an agreement on a new tax credit for the semiconductor industry, building on a $210 million investment the state made earlier this year. The new tax credits are intended to give Oregon a leg up in competing for some of the $52 billion in federal funding made available by last year’s CHIPS and Science Act.
Oregon hasn’t offered a research and development tax credit for several years, but business leaders said it was necessary to help Oregon compete against other states, including Arizona, Texas and Ohio. 
Under the proposal, semiconductor companies could receive a 15% tax credit for research done in Oregon, with a maximum credit per company up to $4 million annually. Companies could receive between 25% and 75% of the credit as a refund depending on their size. 
The tax credit per company is lower than the $10 million considered in an earlier proposal, but the total amount of tax credits could be higher. Over the next four budget cycles, the proposal would allow the state to give up between $35 million and $90 million in tax revenue per budget period. 
The proposal also would extend until 2032 a planned 2025 sunset for enterprise zones, or areas where new or expanding businesses don’t have to pay local property taxes for several years. Local governments are responsible for designating enterprise zones.
“I think all in all this package sends a strong signal that in Oregon we can offer strong incentive packages Oregon’s way that is still competitive on a national scale,” said Rep. Nancy Nathanson, a Eugene Democrat and chair of the joint tax committee. 
Sen. Mark Meek, D-Gladstone, said lawmakers plan to revisit the tax credit in the 2024 legislative session after seeing how companies use it. 
“While we may not be the best research and development tax credit in the United States, we are competitive and we are doing our best,” Meek said. Critics say tax credits don’t actually drive research and are a gift to industry.
A separate bill approved by legislative committees Tuesday set aside an additional $50 million that the Oregon Business Development Department could use to grow the semiconductor industry. That money would revert back to the General Fund if it isn’t spent by Dec. 1, 2024. 
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Oregon Capital Chronicle is part of States Newsroom, a nonprofit news network 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: [email protected]. Follow Oregon Capital Chronicle on Facebook and X.
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Julia Shumway is the Capital Chronicle’s deputy editor and lead political reporter. Before joining the Capital Chronicle in 2021, she was a legislative reporter for the Arizona Capitol Times in Phoenix and reported on local and state government and politics in Iowa, Nebraska and Bend. An award-winning journalist, Julia also serves as president of the Oregon Legislative Correspondents Association, or Capitol press corps.
Oregon Capital Chronicle is part of States Newsroom, the nation’s largest state-focused nonprofit news organization.
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