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Kitzhaber, Intel strike investment agreement

ntel has become the second company in Oregon to strike an investment agreement with Oregon Gov. John Kitzhaber under the terms of a law passed in December 2012 at the request of Nike.

The Governor's Office announced Friday that Kitzhaber and Intel have signed an agreement ensuring the semiconductor manufacturer will add at least 500 jobs and invest at least $500 million in an expansion of its D1X manufacturing plant in Hillsboro.

In exchange, the state agrees that Intel’s corporate tax will continue to be calculated using the “single sales factor” apportionment method for at least the next 30 years. The agreement does not reduce Intel's tax liability and will not result in any revenue loss to the state.

“A robust advanced manufacturing sector in Oregon is critical to our efforts to get Oregonians back to work,” Kitzhaber said of the agreement. “Intel’s commitment to Oregon is staggering, from its impact on job growth, to revenue for critical public services, to influencing an economy of innovation. This agreement marks an important step forward.”

“Oregon continues to foster an investment climate that allows Intel to create jobs and manufacture leading-edge technology in America,” said Neil Tunmore, Intel’s Vice President of the Technology and Manufacturing Group and Director, Corporate Services. “The D1X project reinforces Oregon’s claim to Intel’s largest and most advanced site in the world. This tax agreement provides Intel with the certainty needed to expand our investments in a globally competitive industry.”

Expansion of the D1X plant began in February 2013, approximately two months after the legislation was approved by a special session of the Oregon Legislature. Intel is expected to spend around $3 billion on the D1X Mod 2 facility and support building, where over 500 new workers will be employed.

The “single sales factor” apportionment formula taxes companies on the basis of their sales in Oregon. Over the past 20 years, a majority of states have changed their corporate tax codes to either put more emphasis on the sales factor or apportion based only on sales. Oregon made the change in 2005.

Construction of the D2X facility is continuing under a legal cloud because Intel recently disclosed it had not been reporting its fluoride emissions. The admission came as the company was applying for its next discharge permit from the Oregon Department of Environmental Quality. Some environmental activists have threatened to sue Intel over the disclosure. Jill Eiland, Intel's Northwest Region Corporate Affairs Manager, says the company is working closely with DEQ, the activists and residents living near its Hillsboro plant to resolve the issues.

Nike sought the legislation while deciding where to expand. After it passed, the company said it would expand at its World Headquarters Campus just outside of Beaverton.

Companies have until the end of this year to apply for similar agreements with the state.




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