Strategic Investment Program (SIP) Successes
Ball Janik LLP Partners Jack Orchard and Steve Janik have represented several companies in successfully obtaining approvals and agreements under Oregon’s Strategic Investment Program (SIP), a property tax program created to induce companies to build new facilities in Oregon and increase employment. This tax reduction program is available to companies that are in "industries in which member firms sell their goods and services into markets for which national or international competition exists." (ORS 285C.600) The legislation was designed to reduce property taxes for large facilities where the assessed value of real and personal property exceeds $100 million or, in rural areas, exceeds $25 million.
All of the SIP application matters handled by Mr. Orchard and Mr. Janik have been successful. Examples of their work include:
- Obtaining a SIP approval for a Japanese company that built one of the first wafer fabrication facilities in Oregon, becoming the first company to obtain a SIP approval;
- Obtaining a SIP approval for a large semiconductor manufacturer for $25 billion in reduced tax assessment for multiple projects over an extended period of time; and
- Obtaining SIP approvals for rural wind power generating facilities.
Their work required analyzing the applicable statutes, structuring the ownership of the facility, preparing the application, negotiating the terms of the agreement with the county, and obtaining county and state approvals through public hearing processes.
Some SIP applications have posed unique challenges, such as a wind farm where the project straddled two different counties and where the ownership was a complex structure of multiple LLCs, which required a persuasive statutory analysis that the ownership structure complied with the statutory language. Another unique challenge was a SIP application that did not identify specific projects and requested a long term assessment reduction for projects to be built in the future. Mr. Janik and Mr. Orchard have also dealt with a situation where, after obtaining a SIP approval, the value of the plant dropped below the $100 million level, which led the client to a decision to unwind the SIP agreement before the end of its term.