Legislative and Rulemaking Updates
That significant April 4 deadline has come and gone. This deadline eliminated nearly half of the session’s bills, from just over 2,900 to around 1,500. Many bills are now waiting for a third reading, which is legislative speak for a vote by the full House or Senate. Committees have been canceled April 10 and 11 to give the House and Senate additional time to work through third readings. Committee work will resume Wednesday.
The next major milestone is May 5, by which time policy bills must be scheduled for a vote in committee (this time in the other chamber). That vote must then occur by May 19. Again, this deadline doesn’t apply to the Rules, Revenue, Joint Ways and Means or other joint committees.
Preferential Contracting: Earlier this session, OBI opposed and ultimately persuaded the Senate Committee on Labor and Business not to advance a bill that would grant public contracting preference in some circumstances to non-profit organizations. There is now a bill in the House, HB 3572, that would grant the same public contracting preferences to certified B corps. The preference would allow such companies to have costs up to 10% higher than others. While Oregon has certain preference statutes, those typically involve a policy goal such as using Oregon companies or recycled materials. To grant preferential status solely on a filing status or third-party certification is a dangerous precedent that ultimately will cost taxpayers more.
Energy Bills: Two energy-related bills have died. HB 3152 would have restructured the Public Utilities Commission, making it an environmental regulator rather than an economic regulator, and eliminated energy efficiency incentives for natural gas infrastructure. It was pulled from its committee agenda, and no vote was held by the April 4 deadline. Meeting a similar fate was HB 2816, which would have required high energy use facilities like data centers to meet a renewable portfolio standard.
Right to Repair: SB 542, this session’s version of a “right to repair” bill, passed out of the Senate Committee on Energy and Environment on a party-line vote. OBI has and will continue to oppose the bill because it does not provide adequate intellectual property protection for original equipment manufacturers. The amended version of SB 542 is more narrowly tailored than prior years’ efforts. It focuses on consumer electronics such as phones and laptops and specifically excludes vehicles, engines, battery and power storage systems, HVAC systems, and machinery and equipment related to a wide group of sectors, including forestry, farming and construction. The bill has not yet been scheduled for a vote in the full Senate and probably does not have the votes to pass.
Workplace Bullying: OBI and others have opposed SB 851, which would have allowed employees to file lawsuits against employers when decisions like promotions or work assignments did not go their way or when two or more employees had disagreements. Fortunately, the bill was amended significantly, and OBI no longer opposes it. The amended version requires the Bureau of Labor and Industries to develop model respectful workplace policies that employers may adopt. The bill is expected to pass the Senate and head to the House this week. OBI will share those models with members when they are developed.
Gas Reduction Goals: The Senate Energy and Environment Committee moved SB 522 out of committee last week. Prior to doing so, it adopted an amendment to clarify that the greenhouse gas reduction targets are intended to be aspirational rather than mandatory. The amendment was intended to satisfy concerns raised by Sen. Lynn Findley, R-Vale, but the concession frustrated proponents of the original bill. This has created some uncertainty about the bill’s fate. Meanwhile, OBI remains concerned that even aspirational language could lead to policies that would raise costs for businesses and consumers without affecting climate change.
Universal Health Care: SB 704A would establish a Universal Health Care Governing Board and direct it to present a comprehensive plan for a single-payer universal health plan, including funding, to a legislative committee by Sept. 15, 2024. This bill was moved from the Senate Health Care Committee to the Senate Rules Committee. Meanwhile, the bill’s chief sponsor introduced SB 1089, which is virtually identical to the current version of SB 704. It is scheduled for a public hearing and possible work session in Senate Rules on April 13. In addition, the sponsor filed an amendment that would instruct the Universal Health Care Governing Board to identify strategies that would allow employers to continue offering benefits if they chose while making some contribution to the cost of universal health care.
Diesel Ban: SB 803, which would have phased out the sale of petroleum diesel statewide by the end of 2029, was amended and passed out of committee. The amendment would require the Department of Environmental Quality to study a possible petroleum diesel ban as well as the availability and cost of renewable diesel. OBI has expressed concern about the supply and cost of renewable diesel.
Mandate Review Committee: On April 3, the House Committee on Behavioral Health and Health Care passed HB 3157, which would establish a Health Insurance Mandate Review Advisory Committee to review proposed legislation expanding mandated coverage of specified procedures. The bill has been sent to the Joint Committee on Ways and Means.
Key Semiconductor and Manufacturing Bill Passes
One of the biggest pieces of news to emerge from the Legislature last week is the passage of Senate Bill 4, which provides $210 million to support advanced manufacturing and gives the governor authority to bypass land-use laws for industrial development.
In passing the bill, the Legislature took an important step to position Oregon for semiconductor investment supported by CHIPS Act funding. While employers throughout the state are grateful, the work of lawmakers is not finished. Oregon will not be truly competitive for semiconductor or other advanced manufacturing investment until the Legislature approves additional tax policy identified by industry leaders and by the Oregon Semiconductor Competitiveness Task Force.
Oregon, the task force notes, is one of the few states without a research and development tax credit. Unless that changes, the state will continue to underperform as a competitor for manufacturing projects, including semiconductor projects, which provide good jobs and abundant tax revenue.
According to the semiconductor task force, every $1 billion in semiconductor capital investment generates $44 million in public revenue and 7,000 construction-related jobs. Every 2,000 permanent chip jobs create $57 million in government revenue annually.
As for manufacturing generally, research conducted for OBI has found that this sector contributed $33 billion to Oregon’s gross domestic product in 2020. The median earnings of full-time manufacturing workers are 17% higher than those of workers in other industries. And a 10% increase in Oregon’s manufacturing output would support 66,000 new jobs and generate $800 million annually in state and local tax revenue.
U.S. Commerce Secretary Gina Raimondo, who visited Oregon before SB 4 passed last week, said the state “will be extremely competitive” for CHIPS Act investment. She emphasized the fact that Oregon has about 15% of the nation’s semiconductor workforce but only 1.3% of the country’s population. Raimondo oversees the Commerce Department, which will distribute $52 billion in CHIPS Act funding.
If passed, the recommendations of the semiconductor task force would amount to one of the most important economic development policy packages the state has ever offered. The Legislature has now passed some of those recommendations, and that’s undeniably a good thing. If lawmakers want to create the conditions for enduring prosperity, however, they’ll need to do more, beginning with a robust R&D tax credit.
Intel CEO Visit: Intel CEO Pat Gelsinger told The Oregonian April 4 that Oregon will remain the heart of the company’s research spending “forevermore” and that the company hopes to use CHIPS Act funding to build a major lithography center in the state.
Arizona Semiconductor Expansion: According to The Wall Street Journal, a fight involving a half-cent sales tax threatens to impede the operation of a large semiconductor project. The tax pays for most transportation and infrastructure projects in Maricopa County and will sunset at the end of 2025 barring legislative and voter action. A number of Republican legislators have refused to support an extension of the tax, however. Its failure, the Journal reports, could impede the growth of a $40 billion semiconductor campus Taiwan Semiconductor Manufacturing Co. is building in north Phoenix. TSMC agreed to build in Phoenix under the assumption that additional infrastructure would be built to serve its site, the Journal reports.
Population Loss: The loss of population in Multnomah County since 2020 stands out in the three-state region that includes Washington and Idaho, the Portland Business Journal writes.
Multnomah Tax Cost: The cost of administering the capital gains tax on which Multnomah County residents will vote in May could consume more than 50% of collected revenue, Willamette Week reports.
Central Oregon Home Sales: The real estate market in Bend and Redmond heated up in March, The Bulletin reports. The median sale prices of a single-family home increased to $685,000 in Bend from $660,000 in February. While the median price of a single-family home in Redmond decreased $1,000 in March to $439,000, homes took on average only 27 days to sell, down from 56 in February.
Job Growth Slows: The nation’s employers added 236,000 jobs in March, The New York Times reports. This is a drop from an average of 334,000 over the past six months. Year-over-year growth in average hourly earnings also slowed, to 4.2%, which is the slowest pace since July 2021. This is a sign the Federal Reserve has been looking for as it seeks to address inflation, The Times reports.
Register for May 17 Annual Meeting
OBI’s Annual Meeting is May 17 at the Salem Convention Center. The program will begin promptly at 3:30 p.m., and a reception will follow at 5:00 p.m.
This year’s Annual Meeting will feature a keynote address and Q&A session with Gov. Tina Kotek. In addition, John Horvick, senior vice president of DHM Research, will present recent OBI polling data regarding public opinions and key issues. Finally, Kat Saunders, partner with Economic Leadership, will discuss current national economic trends, including how Oregon stacks up in the national economic picture.
In addition to these timely presentations, the Annual Meeting is a chance for hundreds of OBI members to hear about the association’s key initiatives, connect with elected officials and network with each other.
CompSAFE Webinar: Heat and Smoke Rules, One Year In
Join experts from Oregon Occupational Safety and Health on Thursday, May 18 to learn how the first year under the rules went and hear about potential adjustments. The online webinar will provide a brief refresher on rule requirements, a look back at 2022 and a look ahead to 2023. State experts also will field questions from webinar participants.
The webinar is made possible by OBI’s CompSAFE program, which allows qualifying members to save on workers’ compensation insurance through OBI’s partnership with SAIF, Oregon’s not-for-profit workers’ compensation insurance provider.
The webinar will run from 10-11 a.m. and is open only to OBI members and to invited guests.
OBI members can register here.