OBI Updates Legislative Priorities as Session Progresses
What happened: OBI has updated the list of legislative priorities released Jan. 30 to reflect the current state of various legislative proposals. For example, some bills have emerged as more significant threats while others are no longer as threatening due to important amendments negotiated by OBI. This list of bills and concepts reflects OBI’s conviction that the 2026 legislative session is an important opportunity for lawmakers to follow through on their commitment to strengthen Oregon’s economic competitiveness and grow the private sector. OBI’s list of priorities includes bills that would enhance competitiveness and those that would threaten it. You can download the updated priorities document here.
Key deadline: The 2026 short legislative session, which began on Feb. 2, hits a key deadline today: the first chamber deadline, by which bills must have received a committee vote in their chamber of origin to survive. This deadline does not apply to the rules and revenue committees in both chambers or to joint committees (like the budget-writing committee). The session must conclude no later than March 8.
Portland Metro Chamber Releases Sobering Economic Data
What happened: On Feb. 12, the Portland Metro Chamber released its annual reports on the Portland region’s economy and the state of the city and its downtown. The findings are sobering. The region in 2025 experienced job losses, slow population growth, dwindling exports and rock-bottom real estate attractiveness.
Regional economy at a glance:
- 8,800: Number of jobs lost in the region in 2025, fourth worst of all metro regions in the nation.
- 3,300: More births than deaths in Portland metro in 2024, down from 13,800 in 2001.
- 80th: Portland ranked second to last again in a national real estate attractiveness ranking.
- 656: Number of multifamily housing units in Portland’s pipeline, lowest since 2011.
- $6.4 billion: Quarterly value of exports, down from $10 billion in Q3 of 2024.
Why it matters: While the reports focus only on one region in the state, the health of Portland’s economy matters a great deal to the rest of Oregon. The tri-county region has roughly 40% of the state’s population but contributes nearly 60% of Oregon’s GDP. For Oregon to prosper, the Portland metro area must as well.
Statewide data sobering: In a presentation accompanying the reports’ release, ECONorthwest Director of Economic Research Mike Wilkerson shared data showing that Oregon’s economic problems are not confined to the Portland metro area:
- Migration is costing Oregon personal income, estimated to be roughly $530 million in 2022, the most recent year for which data are available. Oregon’s public services rely heavily on the personal income tax.
- Government expenditures in Oregon as a share of personal income (24.7%) were the nation’s third highest in 2022, topped by two states with sovereign wealth funds, New Mexico and Alaska. Given the state’s nearly nation-leading spending, resulting in a budget that doubled between 2015-17 and 2025-27, the state needs to focus on growing the economy, not perpetuating unsustainable budgeting by increasing the tax burden.
- Competition among states for job-creating businesses is fierce, and Oregon is simply not competitive.
Takeaway: Oregon’s economy and that of its largest city have suffered in recent years as the state’s business climate has eroded. Keeping to the policy path that has produced these results will not turn things around for Oregon or for the Portland metro area. State and local policymakers must prioritize economic development and private-sector job creation.
Learn more: Go here to learn more about the Portland area economy, here to learn more about the state of downtown Portland and here to read OBI’s Oregon Competitiveness Agenda, which contains dozens of necessary pro-growth reforms.
OBI Asks DEQ to Pause Recycling Program Enforcement
What happened: On Feb. 9, OBI and more than a dozen allied organizations sent a letter to the Department of Environmental Quality requesting a pause in enforcement of the Plastic Pollution and Recycling Modernization Act. Just days before the request, federal district court Judge Michael Simon denied Oregon’s motion to dismiss the National Association of Warehousers and Distributors’ (NAW) lawsuit questioning the constitutionality of the law. Judge Simon additionally granted NAW’s motion for a preliminary injunction preventing DEQ from enforcing the program against NAW’s members until the court rules on the merits of the case. A trial is scheduled to begin July 13.
Request rationale: Judge Simon’s injunction pauses enforcement only for NAW’s members. However, the program’s potential harms remain serious threats to businesses not covered by the injunction, which will continue to shoulder compliance costs and suffer competitive distortions. Pausing enforcement for all producers selling material into Oregon, as OBI has requested, would prevent this disparate treatment.
DEQ’s response: DEQ responded late Friday, Feb. 13, declining to meet the request made by more than a dozen associations. Despite the open constitutional questions and now existing enforcement injunction, DEQ intends to plow forward with collecting exorbitant fees from companies.
The law’s problems: OBI has raised many issues with the program – including constitutional issues, its rushed implementation and DEQ’s haphazard enforcement scheme – since it was enacted. According to the NAW’s press release, Simon “agreed with NAW that the law’s opaque regulatory scheme raises serious questions about whether the Act violates the Due Process and Dormant Commerce Clauses in the United States Constitution.”
Learn more: Visit OBI’s Recycling Modernization Act web page to learn more about the program.
Policy and Rulemaking Updates
Tax disconnect bill: Despite high-profile calls from Gov. Kotek and several legislators that we need to improve prosperity and create private sector jobs, the Senate Committee on Finance and Revenue has passed SB 1507. As amended, the bill would disconnect from three provisions of H.R. 1 (auto loan interest deductions, a Clinton-era small business stock provision and, the biggest bite, accelerated depreciation of equipment and machinery). As OBI has said, these are short-sighted changes that take away important benefits for no good reason. The state’s general fund is more than balanced. The full Senate is likely to pass SB 1507 on a partisan vote this week.
Recent disconnect media: Ken Boddie at KOIN invited OBI to join him on Eye on Northwest Politics for a segment about the disconnect bill the various prosperity efforts and a few other topics he squeezed into the last minute. You can see the segment here. The Oregonian editorial board put out an exceptionally good piece on the disconnect topic, distilling it down to key points and putting a lot of noise to the side. Thanks to OBI members, including OBI Chair Lori Olund, who is quoted in the editorial, for talking to them about the realities of these tax provisions on Oregon businesses. It is here. And on Feb. 12, OBI discussed the disconnect bill with Michael Dunne at KLCC on his Oregon On The Record program. You can listen to the segment here.
Kotek bill improved: Gov. Kotek’s economic development bill, HB 4084, was passed on a bipartisan basis by a first House committee last week and now moves to the House Committee on Revenue (due to enterprise zone provisions). As previously reported, the bill was always well intentioned and had a couple of good provisions, but OBI had concerns that the introduced bill needed work to ensure the so-called fast-track permitting was, well, faster. Duke Shepard on the OBI team negotiated several improvements to the permitting section, and OBI now supports the bill without reservation. Unfortunately, building trades unions continue to press for the application of prevailing wage standards or project labor agreements to enterprise zone projects. The bill remains a priority of the governor and has bipartisan support, but challenges to final passage remain because of these demands.
JOBS Act moving: SB 1586 will have its first hearing this week before the Senate Finance and Revenue Committee. The bill continues to gain support from business groups, companies and associations representing cities and counties. Organized opposition is primarily from those opposed to adding land in urbanized Hillsboro into the urban growth boundary for industrial use. The bill has already been pared down. The original 1,700 acres proposed for inclusion has been reduced to 373 acres, with the remaining acreage designated as urban reserves and subject to Metro’s standard governance process. This change eased some resistance. Additional amendments that strengthen and clarify the bill are also under discussion. OBI has been an active participant in shaping many of these changes.
Rulemaking fixes alive: OBI’s rulemaking transparency and modernization bill, HB 4073, has received a hearing in the House Rules Committee. It was generally well received, and OBI is hopeful of further action. Legislators seem particularly interested in the arbitrary and capricious standard OBI wants to enact. This standard is used at the federal level and in all but a handful of states. In fact, it’s a cited basis for dozens of claims filed against the Trump administration by Oregon Attorney General Dan Rayfield.
Referendum shenanigans: Last week was a contentious one in the newly established Joint Special Committee on Referendum 2062-302. The committee was established solely to pass SB 1599, which would move the transportation referendum vote from November to May. Thousands of Oregonians joined Republican lawmakers in submitting testimony opposing the bill and date change. Democratic lawmakers were unperturbed, advancing the bill out of committee on Feb. 12. There is a particular piece of this bill that is of extreme concern to OBI. By way of background, legislators have the ability to write a ballot title for something they believe may be sent to the ballot as a referendum. They affirmatively chose not to do so for the transportation package. Thus, they knew that the normal ballot title process would be in effect. That process includes the right of Oregonians to appeal draft titles (written by the attorney general’s office) to the Oregon Supreme Court. This is a well-established right. However, SB 1599A sets the table for a fundamental breach of that right. It does so by stating that if a Supreme Court appeal is not resolved (i.e., the Supreme Court has not yet issued a final title), then the referendum will just use the latest version released by the attorney general. This could interrupt existing appeals as those must be filed for this in late February. Because of this language added to the bill, OBI now strongly opposes SB 1599A. If the Supreme Court has not ruled by March 12 (the date when the secretary of state needs all information for the May election), then the referendum should stay on the November ballot as signers intended to begin with.
Gas tax bill: On Feb. 13, lawmakers posted an amendment to HB 4007, an otherwise unassuming e-bike regulatory bill. The proposed amendment, offered by Rep. Paul Evans, D-Monmouth, adds language repealing the existing requirement that local gas tax and fee increases go before voters for approval. It also proposes changes to the allocation of revenue generated by the 2017 transportation package. It is unclear how seriously Democratic lawmakers intend to pursue the amendment, which will receive fierce pushback from Republicans, especially considering the broader context of the more recent transportation package and subsequent referendum. HB 4007 is scheduled for a work session on Feb. 16.
Rule adoption notice: HB 4021 requires advance notice of regulatory changes before they become effective. The intent is to provide adequate notice to businesses so they can prepare for new compliance obligations. On Feb. 17, the House Rules Committee will consider an amendment that that reflects OBI’s Oregon Competitiveness Agenda.
Immigration retaliation fixes: HB 4111 contains three provisions related to immigration. These relate to evidence in civil cases; employer liability for retaliating, discriminating or taking adverse action against an employee for changing their name, Social Security number or employment authorization documents; and a law-enforcement provision on which OBI has taken no position. Paloma Sparks has been negotiating on OBI’s behalf for the past two weeks. Last week, proponents and the sponsor agreed to important language to protect employers. Specifically, it would protect employers from unlawful practice claims if a third party takes adverse action in response to changes in personal information or if the employer had to act in response to federal employment authorization requirements. With this change, OBI will be neutral on the bill, which is expected to move out of committee Feb. 16.
Vacation payout bill: The original version of HB 4094 would have required employers to pay out any unused vacation upon the termination of employment. This would have increased complexity for employers and led to reduced accrual opportunities for employees. After much discussion – and the involvement of additional stakeholders – the sponsor has finally responded to those concerns. He’s indicated that he will move forward with an amendment that codifies current case law, requiring employers to pay out vacation or PTO accruals only if the employer’s policy requires it to do so. OBI is neutral on the bill with this amendment. The bill is scheduled for a committee vote on Feb. 16.
Climate superfund bill: SB 1541 passed out of the Senate Natural Resources and Wildfire Committee on a party line vote and now heads to the Joint Committee on Ways and Means, where hopefully it will stay until adjournment. The most worrisome environmental bill of the 2026 session, it would impose strict liability on businesses that extracted or refined fossil fuels resulting in “climate damages” between 1995 to 2024. These financial obligations lack clear limits on total costs or future reassessments, and the bill would increase fuel costs for consumers. Regulatory programs such as the Climate Protection Program apply to current and future emissions, while the climate superfund would add another significant layer of cost by imposing retroactive liability. OBI doesn’t believe leadership intends to move the bill. It has a significant fiscal impact for agency administration, and similar bills have faced litigation in New York and Vermont.
Permit denial explanations: HB 4020 moved out of the House Rules Committee last week and is headed for a floor vote. The bill requires five state agencies, including DEQ, to explain reasons for permit denials and provide guidance for applicants interested in contesting denials. It requires agencies to develop performance measures for evaluating permit processing timeframes and the factors that delay timely issuance of permits. OBI is neutral on the bill, which would do very little to improve the permitting process. Permit denials are rare. Typically, applicants agree to requirements or the process simply stalls. Further, performance measures that have no teeth would do little to improve permitting.
Wage claim penalties: As introduced, HB 4089 would make failure to pay wages of all sorts owed to workers subject to criminal penalties as well as the current remedies through BOLI or the courts. If the bill moves forward, OBI expects it will be with an amendment that clarifies current criminal law relating to theft of services. It also would provide penalties for contractors and subcontractors who use unlicensed construction labor contractors. OBI understands that a new amendment – which OBI hasn’t yet seen – may clarify that criminal penalties would apply only for multiple violations. The bill is scheduled for a committee vote on Feb. 16, but it is far from certain that it will be acted on.
Prevailing wage fix: OBI testified last week on SB 1566, which proposed modest adjustments to Oregon’s prevailing wage law that would have returned it closer to its historic application prior to a series of expansive administrative decisions at BOLI. The hearing before the Senate Labor and Business Committee was a courtesy hearing only. The chair has no interest in advancing the bill. Thus, despite housing being a stated priority of so many policymakers, there will be no fix this session to prevailing wage interpretations that stymie housing projects.
ODOT bills: OBI testified last week in opposition to two bills involving transportation planning and leadership. First was HB 1542, which would set a capital investment plan for ODOT whose scoring system would de-prioritize funding for highway expansion projects and focus on modes of transportation that reduce greenhouse gas emissions. Second was HB 1543, which would revamp the Oregon Transportation Commission and limit ODOT’s bond indebtedness in unhelpful ways. While several amendments have been posted that would mitigate worrisome language in the base bill, they would still have the effect of politicizing the commission. Both bills are scheduled for work sessions on Feb. 16.
Notable News
Oregon business bankruptcies: More evidence of the growing strain on Oregon’s economy: Business bankruptcies jumped 25% last year, to their highest point since 2013. The latest numbers are especially worrying for Oregon. Business bankruptcies rose almost four times faster here than they did nationwide (The Oregonian).
Tech job losses: Oregon high-tech employment has struggled the last few years and its losses accelerated in 2025 (Portland Business Journal).
Oregon economic cycles: In the face of economic stagnation and rising unemployment, Oregon’s governor announces a plan to make the state more competitive and create well-paying jobs. The previous sentence applies to Oregon’s current Democratic governor, Tina Kotek, who unveiled “Oregon’s Prosperity Roadmap” in December. It also describes periodic efforts by her predecessors dating back decades (Portland Business Journal).
Oregon competitiveness: Skeptics question why Gov. Kotek waited three years to make economic development a priority, allowing issues like high taxes, tough permitting, negative perceptions of the state’s largest city and a lack of shovel‑ready sites to intensify without a clear game plan to address them. On top of all that, competition to retain and attract employers is fierce, and Oregon looks to be playing catchup against ambitious and well-funded business recruitment initiatives in other states (Portland Business Journal).
Snow incoming: Mount Hood could see as much as 2 feet of snow between Feb. 16 and Feb. 18, meteorologists say — but it’s still too little and too late to catch up to past snowfall averages after months of snow drought (The Oregonian).
Governor poll: Gov. Tina Kotek currently holds a lead over three top Republicans seeking to challenge her in the governor’s race this fall, according to a new statewide poll conducted by a California-based firm (The Oregonian).
Healthcare job surge: Over the past year, demand for healthcare workers has quietly propped up the labor market as other sectors reined in hiring or even shed jobs. On Feb. 11, the full power of healthcare’s role burst into full view, and marked a clear shift in a labor market now geared toward the hard, often physical, work of caring for America’s aging population (Wall Street Journal).
Moda Center funding: Efforts to secure public funding to renovate the aging Moda Center formally ramped up on Feb. 9 with the introduction of a bill in the Oregon Senate that drew widespread support from government leaders, including Gov. Kotek (The Oregonian).
BPA departure: John Hairston is retiring as administrator and CEO of the Bonneville Power Administration, the federal agency that is a major force in shaping the Pacific Northwest’s grid and power supply — both items of increasing concern in the region these days (Portland Business Journal).
Multnomah County chair: Multnomah County Commissioner Julia Brim-Edwards has joined the race for Multnomah County chair (Oregon Public Broadcasting).
School funding proposal: An ambitious effort to reshape the way Oregon calculates how much it needs to spend to produce a top-tier education system is on shaky ground in Salem, after key school lobbying groups lined up against it Feb. 10 (The Oregonian).
Democrats’ housing bind: Salem’s Democratic supermajority finds itself in a double bind as lawmakers weigh a bill intended to lower the cost of building affordable apartments. If they approve Senate Bill 1566 — brought forward by the ranking Republican lawmaker on the Senate housing committee to address the high cost of publicly subsidized apartment construction — they’ll alienate trade unions that spend heavily for Democrats during election season. If they ignore the bill, they skip a chance to do what housing policy analysts, and even state agency Oregon Housing and Community Services, say is necessary to build more affordable housing: lower construction costs (The Oregonian).
Woodburn expansion: Woodburn’s population has been growing so fast that city leaders think it could be out of land for new housing in 18 to 24 months. A proposed bill in the Oregon Legislature would allow the city to fold 120 acres of former farmland into its urban growth boundary in an expediated manner (Salem Statesman Journal).
Vancouver office market: Developers behind a Vancouver mixed-used project are paring back plans as the local office market has made them no longer feasible (Portland Business Journal).
Metro economic development: Metro is getting serious about economic development. Metro Councilors Ashton Simpson, Christine Lewis and Juan Carlos Gonzalez recently hosted what they said was the regional government’s first-ever Economic Boardroom Roundtable (Portland Business Journal).
Oregon semiconductor company: Shares in Lattice Semiconductor jumped 16% Feb. 11, a day after the Hillsboro company reported strong quarterly results and issued a robust outlook for 2026 (The Oregonian).
Liability bill advances: A liability waiver reform bill desperately sought by Oregon ski resort operators and other recreation providers remained on track in the Legislature on Feb. 11. Senate Bill 1593 was endorsed by its originating committee with a unanimous “do pass” recommendation. That was expected. The more important development was that Democratic leadership in the Senate released the bill from referral to the Judiciary Committee, directing it to the Rules Committee instead (Portland Business Journal).
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.
- Partners Retirement Plan: Allows multiple employers to offer a 401(k) benefit to employees through a group structure while maintaining individual company design and control over the benefit – such as eligibility, employer match, and vesting.
- 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.
- 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.