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Download OBI’s 2024 End of Session Report

Oregon’s 2024 legislative session concluded with three days to spare. Nevertheless, the five-week frenzy of lawmaking produced dozens of legal changes that affect Oregon businesses. The Legislature also adopted sweeping legislation on drug and criminal justice policy, dedicated hundreds of millions of dollars to housing affordability programs and revamped Oregon’ campaign finance system.

It was, in other words, a highly consequential session despite its brevity.

OBI’s government affairs team worked tirelessly to support bills that promised to help Oregon’s employers and to mitigate the harm done by bills that threatened to erode the state’s business climate.

OBI’s 2024 End of Session Report, which you can view and download here, discusses the session’s highlights and describes the fates of dozens of bills that mattered most to Oregon’s employers.

Policy and Rulemaking Updates

Second CPP Rulemaking Begins

On April 2, the Department of Environmental Quality (DEQ) reinitiated rulemaking on the Climate Protection Program (CPP). The original rule was invalidated in a December 2023 Oregon Court of Appeals decision, and DEQ opted to engage in new rulemaking rather than appeal the court’s decision. At a minimum, DEQ must satisfy procedural deficiencies with the CPP, and the agency has indicated that it is open to some revisions but not wholesale changes to the policy.

Much of the six-hour April 2 meeting focused on the scope and elements of the original CPP rule, although there was some discussion of specific program features. Regulated entities have communicated clearly that they don’t believe DEQ has legal authority to implement the CPP and that the policy should be put before the Legislature in the 2025 session. Nevertheless, the business community participated constructively in the meeting by challenging the program’s prohibitive cost and its potential to diminish the competitiveness of Oregon businesses.

OBI is working very closely with members and other partners in coordinating written comments since improvements in the program for one sector could have negative impacts on other sectors. Two meetings remain—May 14 and June 25—before DEQ issues a proposed rule, which it is likely to do toward the end of July. For more information on the rulemaking, including the advisory committee roster and background materials, see DEQ’s CPP rulemaking webpage.

BOLI Leave Interpretation Alarms Employers

Following the close of the legislative session in March, the Bureau of Labor and Industries (BOLI) has worried employers with its interpretation of and rulemaking for the Oregon Family Leave Act (OFLA).

First, BOLI has been telling employers during training sessions that employees in some circumstances are entitled to leave of unexpected length. Specifically, BOLI has told employers that employees who take concurrent leave through OFLA and Paid Leave Oregon (PLO) for their own serious medical conditions are eligible to take 12 full weeks of paid PLO leave followed by four weeks of unpaid OFLA leave. This additional four weeks was not contemplated when PLO was layered onto OFLA. Fortunately, SB 1515, which passed during the 2024 session, will resolve the automatic grant of four unpaid weeks of leave. In the meantime, employers are encouraged to check with employment counsel while making determinations if they have any questions.

The second cause for alarm involves rules BOLI published in early March relating to how employers need to count hours to determine eligibility for OFLA. The rule requires employers to count hours actually worked as well as any protected leave workers take. The addition of protected leave is a substantial change from the status quo, and the rule is ill-defined and burdensome. For example, the rule does not clarify which of Oregon’s many types of protected leave employers must include in the count. Allowing workers to exhaust other leave prior to taking OFLA leave compounds the stacking problem employers have faced since PLO came online, and employers will face the protracted loss of key employees, the inability to fill vacant positions on a permanent basis, the cost of paying for absent workers’ insurance benefits, and potential liability should employers fail, even accidentally, to follow complex and overlapping leave laws correctly.

SB 1515 included other important changes. Starting July 1, workers will not be eligible to take OFLA leave for their own serious medical conditions. The bill requires BOLI to reopen its new rule on OFLA eligibility, and OBI is ready to ensure BOLI does not overreach in updating its rules.

Housing Panel Proposes Massive Tax Hikes

Due to the acute shortages in workforce housing across the state, which hamstrings Oregon businesses and reduces their competitiveness, OBI has become increasingly involved in state housing policy. We have supported recent proposals, including SB 1537 from the 2024 session, that address some of the key barriers to housing construction. These barriers include inflexible and outdated land use regulations as well as other regulatory hurdles, including the cost, complexity and long wait times for permitting.

In its recently released final report, the governor’s Housing Production Advisory Council (HPAC) offers some continued positive steps on these issues. However, the HPAC report also recommends new taxes and significant tax increases in order to pay for housing programs. The taxes, which include an increase in personal income tax brackets, establishment of a special real property tax assessment, implementation of a retail sales tax, a new payroll tax, and doubling of the fuel tax, collectively would place a massive new burden on Oregon’s residents and businesses (see the housing panel’s tax recommendations here). In addition, HPAC’s recommendations would take no fewer than three constitutional amendments, including one to redirect fuel taxes from transportation to housing.

As we explained to the governor’s office, such significant tax hikes would erode consumer spending, lower business investment and slow the economy generally. In short, we are continuing to help the governor’s office understand that Oregon cannot lower the cost of and increase access to housing by increasing the cost of and lowering access to everything else, including housing. We are hopeful that Gov. Kotek will see that HPAC’s tax recommendations are detrimental to her own goals and will instead focus on the regulatory reforms necessary to lower costs and increase production.

Notable News

Drug Criminalization: Gov. Tina Kotek has made it official: Drug possession will soon be a crime once again in Oregon. On April 1, Kotek signed House Bill 4002, which both expands funding for substance abuse treatment and makes possessing small amounts of hard drugs a misdemeanor beginning Sept. 1 (Oregon Public Broadcasting).

Goodwin Challenge: A group of Grants Pass voters who have contended in court that state Rep. Christine Goodwin doesn’t live in her district will drop their effort to remove her from her House seat. However, they will move forward with an effort to prevent her from seeking a seat in Senate District 2, which has the same boundary as her current district (The Oregonian).

Testy Primary: A Republican state senator in a hotly contested primary race on April 1 threatened to sue a House candidate and a former conservative radio host over statements suggesting he’s connected to the Chinese Communist Party (Oregon Capital Chronicle).

Candidate’s Contributions: The Democratic candidate running against incumbent Democratic Rep. Jules Walters in a Clackamas County House district has given nearly $400,000 to state and federal Republican candidates and causes over the past 20 years, campaign finance records show. Brian Maguire, the CEO of a data storage company, filed to challenge Walters, a first-term representative and the former mayor of West Linn (Oregon Capital Chronicle).

First Lady Role: Gov. Tina Kotek told reporters April 3 she is not making any immediate changes in the role of first lady Aimee Kotek Wilson, but she will seek guidance from the Oregon Government Ethics Commission this week on the proposed Office of the First Lady (Willamette Week).

Independent Redistricting: An Oregon group has decided to table until 2028 its proposed ballot measure to empower an independent commission instead of elected politicians to redraw boundaries of the state’s congressional and legislative districts. The group cited a drawn-out legal challenge from labor unions and a lack of financial support as primary reasons for the delay (The Oregonian).

School Tax ‘No’: In January, Portland Public Schools floated the idea of asking voters to increase the local property tax that pays for around 700 teachers, polling 400 voters to gauge their willingness. The answer came back a resounding no (The Oregonian).

Health Contract: An eleventh-hour deal will keep the Legacy Health system in-network for some 200,000 patients insured by Regence BlueCross BlueShield of Oregon (The Oregonian).

Progressive Policies: Oregon boasts the most progressive policies to support families and workers in the nation, according to a new report. The Century Foundation, a progressive New York City think tank, graded states on the quality of their care infrastructure, including everything from child care access to paid sick leave to fair working conditions for care providers (The Oregonian).

Drug Prices: As Oregon moves closer to limiting prescription drug prices, the pharmaceutical industry has stepped up its efforts targeting the state board that could set those limits (The Lund Report).

Seafood vs. Wind: A coalition of independent fishing boat operators, seafood companies and industry groups is calling on Gov. Tina Kotek to ask the federal government to stop a planned auction for floating wind energy projects off the Oregon Coast (Oregon Capital Chronicle).

Rate Proposal: Oregon utility regulatory staff lawyers cast doubt on a bid by the state’s residential ratepayer advocate to derail a Portland General Electric 2025 rate increase proposal before fuller consideration by the Public Utility Commission (Portland Business Journal).

Standard Acquisition: The Standard has completed its acquisition of the life and disability insurance business of Elevance Health, one year after it announced the deal. Portland-based StanCorp Financial Group announced its completion April 1, saying the move brings together two leading employee benefit brands. The combined businesses will operate under The Standard brand (Portland Business Journal).

Dairy Rules: Small dairy farms across Oregon will no longer be subject to a state policy change some farmers say would’ve been too burdensome. The Oregon Department of Agriculture announced March 21 that it’s withdrawing its decision to require small dairy operations to apply for a permit usually intended for larger commercial farms (Oregon Public Broadcasting).

Water Settlement: An Eastern Oregon potato processing plant run by Lamb Weston has reached an agreement with state regulators over wastewater violations (Oregon Public Broadcasting).

Wine Industry: The economic contributions grape growing and wine industries make to Oregon grew almost $1 billion from 2019 to 2022, according to the new report released March 27 by the Oregon Wine Board (Wine Industry Advisor).

OBI Joins U.S. Chamber Brief in Landmark Homelessness Case

On April 22, the U.S. Supreme Court will hear oral arguments in City of Grants Pass v. Johnson, a pivotal case in the struggle of west coast cities to manage an explosion of homeless encampments that has eroded livability and threatened businesses. OBI has joined a U.S. Chamber of Commerce amicus curiae brief that details the consequences of stripping state and local governments of “the discretion to enforce public health measures and ensure public safety for the benefit of all citizens.”

The 9th Circuit Court of Appeals has tied the hands of state and local governments in just this fashion since 2018, when it ruled in Martin v. City of Boise that enforcing criminal restrictions on public camping violates the Eighth Amendment’s clause on cruel and unusual punishment unless adequate shelter is available.

Similarly, the 9th Circuit later ruled in City of Grants Pass v. Johnson that cities can’t ticket homeless people for sleeping outside on public property unless adequate shelter is available.

Go to OBI’s website here to learn more.

What to Know about the Corporate Transparency Act

The Corporate Transparency Act, which went into effect Jan. 1, will affect millions of small businesses across the country. Notably, it requires businesses that meet certain criteria to submit a Beneficial Ownership Information Report to the U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN).

The Corporate Transparency Act is intended to combat illicit activity such as tax fraud, money laundering and financing for terrorism. To do that, it captures information about beneficial owners with specific U.S. businesses operating in or accessing the country’s market. Beneficial owners are people who, directly or indirectly, have a significant ownership stake in a company. They must own at least 25% of a company’s shares or exert a comparable level of control over the company’s equity.

Businesses created before Jan. 1, 2024, must file by Jan. 1, 2025. Businesses created after Jan. 1, 2024, must file within 90 calendar days of receiving notice of their creation or registration.

To learn more about the Corporate Transparency Act and to find useful links, go to OBI’s website here.

Report: Growth in State Spending Outstrips Growth in Economy

On April 2, the Common Sense Institute Oregon released its first Oregon Government Budget Competitiveness Index. The report ranks Oregon against other states according to several budget metrics, including debt, tax and fee revenue, government employment and spending.

Among the report’s notable findings: Between 2011 and 2021, state and local government spending in Oregon grew 75.5%. Over that same period, the gross state product grew 59.5% while the state population grew 9.7%.

The Common Sense Institute, which develops data-driven policy analyses, was founded in 2010 by business and community leaders concerned about the partisan tenor of policymaking in Colorado.

CSI’s Oregon chapter is the nonpartisan organization’s fourth. In addition to Colorado, it operates in Arizona and Iowa. The institute has affiliates in Indiana and Utah.

OBI President and CEO Angela Wilhelms serves on the Oregon chapter’s board of directors.

Go here to read the full report.

OBI Accepting Visionary Award Nominations

Is there a person or organization you’d like to nominate for OBI’s highest honor, the Oregon Visionary Award? If so, please let us know.

The Oregon Visionary Award recognizes people, employers and organizations that strengthen Oregon’s economy and contribute significantly to shared prosperity by developing solutions to significant problems. Winners are honored at OBI’s annual Vision Oregon Event, which will take place this year on Oct. 23 at the Portland Art Museum.

The 2023 recipients of the Oregon Visionary Award are Families First Childcare Center and the Oregon Manufacturing Innovation Center (OMIC R&D). Go here to learn more about these organizations. Even better, watch the videos shared at the 2023 Vision Oregon Event. You can find the Families First Childcare Center video here and the OMIC R&D video here.

Please send nominations for the 2024 award to obi@oregonbusinessindustry.com, and be sure to explain how nominees have contributed to shared prosperity by developing solutions to significant problems.

Nominations must be received by the end of the day Friday, April 26.

State Health Care Cost Advisory Committee Seeks Members

The Oregon Health Authority (OHA) Office of Health Policy is recruiting people to serve on the Sustainable Health Care Cost Growth Target (CGT) Advisory Committee. The announcement about the recruitment, including instructions on how to apply, is available on the CGT Advisory Committee website.

Oregon’s goal is to achieve financial sustainability and long-term health care affordability of the state’s health care system. The CGT Committee advises and supports the OHA, Oregon Health Policy Board and Oregon Department of Consumer and Business Services on health care cost efforts and policy. The CGT Advisory Committee collaborates with state partners to develop strategies to lower cost growth.

This recruitment is for people representing various sectors and expertise within the scope of the committee. This work directly affects long-term health care affordability and sustainability for patients, health plan insurers, employers, hospital systems and provider organizations.

Please feel free to share with your networks and anyone you think may be interested in applying to be a member of the CGT Advisory Committee. Applications are due Friday, April 26. Please reach out to HealthCare.CostTarget@oha.oregon.gov with any questions.

Check Out OBI’s Member Benefits

OBI offers members a range of programs that can save money or help small businesses offer benefits normally available only to much larger companies. Benefit programs include:

  • HealthChoice: Helps businesses with fewer than 100 employees offer comprehensive health-care benefits through our partnership with Regence BlueCross BlueShield of Oregon.
  • CompSAFE: Helps eligible companies enjoy workers’ compensation discounts through SAIF Corporation.
  • Fuel Program: Helps members save fuel costs through our partnership with Ed Staub & Sons.
  • ODP Business Solutions: Helps OBI members save money on office furniture, supplies and other services.
  • LegalPLUS: OBI members receive 15 minutes of free legal consulting per month from Innova Legal Advisors.

Go here to learn about all of OBI’s member benefits.