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Strategic Investment Program (SIP)

Strategic Investment Program (SIP)

The Strategic Investment Program (SIP) offers a 15-year property tax exemption on a portion of large capital investments by "traded sector" businesses anywhere in Oregon.

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In its determination that a project is eligible for SIP, following local‒county approval, the Oregon Business Development Commission​ (OBDC) must find that it will:​​

  • Be developed by a business firm in the “traded sector" which consists of “industries in which member firms sell their goods or services into markets for which national or international competition exists." (ORS 285B.280), and 
  • ​Have total investment costs of at least $154.2 million or $41.1 million in a rural area. (These minimums are indexed to price changes starting in 2025)​.
A “rural area" is located entirely outside the urban growth boundary (UGB) of a city with a population of 40,000 or more.

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A portion of the SIP project is still taxed, consisting first of real estate, improvements and so forth, up to a certain amount of market value. All other project property is exempt from tax. The value of the taxable portion grows by 3 percent with each year of the SIP period. In a rural area, the initial or base taxable portion depends on the size of the investment, as follows:

​​Total Project Cost
​Rural Taxable Base
​Of $500 million or less
​​​$40 million​
​Between $0.5  & 1.0 billion
​​​$75 million
​Greater than $1.0 billion
​​​$150 million

​Outside a rural area the taxable portion’s property value begins at $100 million, as price-indexed starting in 2026.​

Approval to receive SIP tax treatment begins with contact between the business firm and the county government to negotiate an agreement. If the SIP project will locate inside a city or port district, their governments also need to be parties to that agreement. The county’s governing body must hold a public hearing before the agreement is executed.

After initiating discussions with the county and other local governments, the business may apply to Business Oregon for the OBDC determination. The application needs to precede any investment in the project. The OBDC cannot make its determination until there is complete local approval, including a vote by the county’s governing body.​

A SIP business must:
  1. Enter into a first-source agreement with the local Worksource Oregon office;
  2. Pay application and administrative fees to Business Oregon for OBDC determination;
  3. Hold a job fair by announcement through Worksource Oregon;
  4. Pay a community service fee to the county in each year of the (15-year) SIP period, which by law equals 25% of that year’s property tax savings up to an annual maximum of $3 million (as price-indexed starting in 2025);
  5. Satisfy any additional requirement as negotiated and contained in the agreement with the county government and possibly with city or port government(s); and,
  6. Report employment and payroll data for the SIP project to Business Oregon following each tax year of using SIP for purposes of program analysis and transparency, and to estimate state personal income tax revenue, which is shared with the county.
Distribution of the community service fee is subject to another agreement among the county and certain other local governments or taxing districts, which also governs shared funds received from the state.
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The three legacy SIZs below offer a streamlined process for local approval based on a standardized agreement and established additional requirements, in addition to approval through any county government as described above​. A SIP project does NOT need to be located in an SIZ. No further SIZ may be designated.​

Gresham SIZ #1
Designation: January 16, 2009
Sponsor(s): Multnomah County, City of Gresham
Features
500 acres prime manufacturing land inside Gresham

Clackamas Rural SIZ #1
Designation: September 24, 2010
Sponsor(s): Clackamas County; cities of Canby, Estacada, Happy Valley, Molalla and Sandy
Features
Rural Area*; Zone Map
1,791 square miles of rural area across county/ cities

Clackamas Urban SIZ #2
Designation: September 24, 2010
Sponsor(s): Clackamas County; cities of Happy Valley, Lake Oswego and Milwaukie
Features
46 square miles of non-rural area across county/cities

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