Agreement gains unanimous approval from city, county

Photo Credit: HILLSBORO TRIBUNE PHOTO: CHASE ALLGOOD - The Hillsboro City Council and Washington County Board of Commissioners met in a joint session Tuesday to discuss a deal with Intel. Intel’s 2014 Strategic Investment Program (SIP) agreement was unanimously approved Aug. 26 after four hours of public testimony during a joint session of the Hillsboro City Council and the Washington County Board of Commissioners.

When it was over, there were smiles and hugs among Intel executives, elected officials and members of business and booster groups, while most of the crowd — which extended into an overflow room — had left for the evening.

Those offering testimony included a large group of construction workers and electricians, wearing red shirts and supporting the agreement, which could help keep them afloat.

“We now know that Intel reaches across the entire state and is a global leader,” said Vince Porter, jobs and economy policy advisor for Business Oregon, who was there to represent Gov. John Kitzhaber.

“This is unprecedented and shows that Oregon is a fantastic place for business,” Porter said.

The proposed agreement focuses on tax breaks for Intel’s future investments in expensive high-tech machinery, which typically has a short life cycle.

Highlights of the agreement:

n Property taxes on the machinery investments will be fully paid by Intel for the first $100 million of investment, increasing by 3 percent per year, prior to a property tax abatement being given;

n A community service fee, required by state law, of up to $2 million would be collected annually for each investment package;

n A payment of $2.87 million, collected annually over 20 years, will begin in 2024-25 as long as property tax abatement continues. (A previous SIP hasn’t yet expired);

n The company will pay full share on land and buildings, but will pay fees-in-lieu rather than property taxes. Distribution of the funds will be negotiated locally. Some commenters objected to the concept, contending that area schools are the poorer for it.

“This deal will do. It’s one of the largest deals we’ll see in the country,” said state Rep. Ben Unger (D-Hillsboro). “But the deal can be stronger at funding our K-12 schools and reducing class size. The way it’s currently structured, our schools will lose out.”

County Commissioner Roy Rogers, who led the county’s SIP negotiations with the other parties, said the board considered ways to boost school funding.

“We could find no nexus between property taxes and schools, though we would have liked to,” he said.

Commissioner Greg Malinowski and others said the tax code should be restructured at the state level to eliminate all property taxes for non-durable equipment. A Sept. 5 meeting of the Oregon Business Development Commission has been scheduled to officially seal the deal.

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