OBI Urges Lawmakers to Increase Rulemaking Transparency
What happened: On Feb. 12, OBI Executive Vice President and General Counsel Paloma Sparks testified in support of two key pieces of OBI’s Oregon Competitiveness Agenda. The agenda contains dozens of policy proposals designed to enhance Oregon’s economic competitiveness. Many of these proposals focus on the state’s regulatory environment, including the bills about which Paloma testified before the House Committee on Rules.
Oregon’s regulatory environment: State regulatory agencies develop rules in such volume that businesses have trouble keeping up. The problem is particularly acute for small businesses. Almost 75% of small businesses responding to a 2023 survey said that regulations affecting businesses change so frequently that it’s hard to keep up with what they’re supposed to do. Over a six-month period in 2024, state agencies proposed 500 agency rulemakings. Compounding the volume problem, there is little consistency among agencies in the way rules are developed and adopted.
Why it matters: Businesses that are unable to keep up with Oregon’s rulemaking torrent are unlikely to expand in Oregon, depriving Oregonians of jobs and state and local governments of tax revenue. Moreover, agencies that create rules without adequate transparency or input from affected Oregonians can lose legitimacy, warned Will Rassmussen, administrative law partner at Miller Nash LLP, who also testified. Watch his testimony here.
What the bills do: HB 2692 would improve the consistency and transparency of agency rulemaking while increasing fairness and encouraging public engagement. HB 3382 would require the creation of a website that would make it easier for the public, legislators, the media and affected businesses to follow rulemakings. Watch Paloma’s testimony HB 2692 here and HB 3382 here.
OBI Testifies in Defense of Unemployment Insurance System
What happened: On Feb. 11, Paloma also testified in opposition to SB 916 before the Senate Committee on Labor and Business. The public hearing was a continuation of a Feb. 6 hearing on the bill. Go here to watch her testimony and here to read her written testimony.
The problem with SB 916: The bill would make unemployment insurance benefits available to striking workers. Doing so would violate the intent of the unemployment insurance system, which is funded by employers to support people who lose work through no fault of their own. Collective bargaining, as Sparks explained to the committee, involves compromise by workers and employers in pursuit of a mutually acceptable agreement. A strike is a way for employees to gain an advantage in the process. Because employers pay all unemployment taxes in Oregon, SB 916 would force employers to subsidize strikes meant to inflict pain upon them. The bill would create an incentive for workers to go on strike and to remain on strike for long periods.
Why this matters: By many measures, Oregon’s business climate has eroded in recent years. And according to CNBC’s latest America’s Top States for Business ranking, only two states are less business-friendly than Oregon. Interestingly, these two states, New York and New Jersey, are the only to have adopted this policy. By stacking the deck against employers – and even forcing them to pay unemployment to striking workers – SB 916 would erode the state’s business climate even more. Employers would be further incentivized to invest in other states, depriving Oregonians of jobs and state and local governments of tax revenue.
OBI Urges Legislators to Address Industrial Land Shortage
What happened: On Feb. 10, Duke Shepard testified in support of HB 2411 before the House Committee on Economic Development, Small Business and Trade. The bill would establish the Industrial Site Loan Fund and allocate $40 million to it. Go here to watch Duke’s testimony and here to read his submitted testimony.
The problem: Oregon suffers from a shortage of market-ready industrial land, and public and private owners of industrial land have limited tools to develop it. As a result, Shepard explained, Oregon manufacturers often expand in other states. When this happens, Oregon loses the benefits such development brings, including jobs and tax revenue.
What the bill would do: In 2023, the Legislature created the Semiconductor Industrial Lands Loan (SILL) Program and committed $10 million to it. The forgivable loan program reimburses government entities, property owners and businesses for development and planning activities. The SILL program is restricted to semiconductor projects in limited areas. HB 2411 would create a similar program that is not limited to semiconductor projects.
Why it matters: Jobs in Oregon’s manufacturing sector pay better than jobs in other industry sectors. Additionally, by producing goods sold outside of the state, traded sector companies pull dollars into Oregon. Helping to make buildable land available to such companies will encourage them to expand in Oregon, keeping good jobs here.
Learn more: Increasing funding for site-readiness programs is one component of OBI’s Oregon Competitiveness Agenda, which you can read here.
OBI Testifies in Support of Estate Tax Reform
What happened: On Feb. 6, OBI Policy Director and Counsel Derek Sangston testified before the House Committee on Revenue in support of HB 2301, which would increase the value of assets excluded from Oregon’s estate tax from $1 million to $7 million. It would apply a single rate of 7% to taxable estate value. Go here to watch Derek’s testimony and here to read his submitted written testimony.
Background: The low threshold for Oregon’s estate tax provides an incentive for people to leave the state, taking their talent and money with them. Most states – 38 – do not impose estate taxes, and Oregon’s tax applies to more assets left at death than similar taxes imposed by any other state. Finally, Oregonians can avoid the state’s tax easily by moving across the river to Washington, where the tax threshold is twice as high as Oregon’s.
Learn More: Addressing Oregon’s punitive estate tax is one of many proposals contained in OBI’s Oregon Competitiveness Agenda, which you can read here.
Legislative and Rulemaking Updates
Land Use: HB 2950 would overhaul the statewide land use planning goal involving citizen involvement (more here). The problematic bill would create an advisory group whose members would not come close to representing the full range of Oregonians who are stakeholders of the system. Further, Oregon’s system is already remarkably process driven (appeals, meetings and an inherent bias toward a “not-in-my-back-yard” mentality). The bill also includes aggressive timelines that, combined with the proposed makeup of the advisory committee, seem to fast-track certain predetermined outcomes. OBI does not agree with proponents that the time has come to review the goals of the 50-year-old system, and OBI and others have proposed a variety of amendments to expand participation and extend timeframes. The bill’s fate is uncertain.
OR-OSHA Oversteps: During a Feb. 12 hearing, Rep. Anna Scharf, R-Amity, told the House Committee on Rules about an opinion she had received from the Office of Legislative Counsel finding that Oregon OSHA had exceeded its statutory authority when it adopted agricultural labor housing rules. The agency had adopted rules regulating homes where a family lives or where five or fewer unrelated individuals reside despite a statute that clearly exempts those homes from regulation under the statute. OBI is talking with Rep. Scharf and agriculture industry partners about next steps.
Age Discrimination: Once again, OBI is opposing an effort by AARP and trial lawyers to change age discrimination law. Oregon law already provides very expansive protections against age discrimination and applies such discrimination to anyone over 18. HB 3187 would make salary, experience and retirement status proxies for age in a discrimination complaint. As a result, many types of employee complaints could become the basis of age discrimination lawsuits even if the actions involved were sound and based on important and informative work factors. Additionally, the bill would prohibit employers from asking for an applicant’s age, date of birth or date of graduation until a conditional offer of employment. There are exceptions for these inquiries if age is related to a bona fide occupational qualification or necessary to comply with a law, rule or regulation. The bill will be up this week, and OBI expects that AARP will bring a large crowd to testify.
Hydrogen Blending: On Feb. 12, OBI testified in opposition to SB 685, which would significantly increase regulatory burdens for natural gas utilities blending even small amounts of hydrogen with natural gas. Proponents, largely anti-natural gas activists, assert that the bill is necessary to ensure safety. Opponents, including OBI, argued that existing regulatory requirements are adequate to maintain system safety. Although Sen. Khanh Pham’s -1 amendment would narrow the bill’s scope to a notification requirement, concerns remain that it could increase a utility’s regulatory burden, hinder greenhouse gas reduction efforts and compromise a utility’s ability to comply with the Climate Protection Program (CPP). (Reminder: Natural gas suppliers and other regulated entities have enforceable requirements under the CPP to reduce emissions with penalties of $10,000 per day per metric ton of emissions over the allowable limit — costs that would ultimately be borne by industrial, commercial and residential customers.)
Union Power Push: Unions are pushing to expand power in Oregon. Below is summaries of some of their proposals and actions, in addition to SB 916 (above). First, before the session even began, Gov. Kotek issued Executive Order 2024-31, which requires project labor agreements where any state funds are obligated. Effectively, that means that any contractor that wants to bid on public projects would have to agree to be unionized. HB 2792 would require hospitals to disclose costs for continuing operations during a strike. HB 2793 would require cost disclosures for hospitals responding to a unionization effort. HB 2944 would allow unions to file civil suits against public employers for failing to meet certain demands. HB 2866 would expand union power in workplaces even if employees had not voted to be part of a union. Finally, various proposals would create workplace standards boards for specific industries. These are all part of an alarming trend that OBI is helping to resist.
Foam Restrictions: OBI will testify Feb. 19 on SB 91, which would ban the use of firefighting foam containing perfluoroalkyl and polyfluoroalkyl substances (PFAS). Firefighting foam used in wildland firefighting and fire extinguishers does not contain PFAS, but the substances are used in foam used to extinguish fuel fires. Until very recently, there were no viable alternatives to PFAS for firefighting foam, and its use was considered a public safety necessity. OBI expects to see an amendment providing a transition period to non-PFAS firefighting foams, which would bring OBI to a neutral position.
Notable News
Transmission Challenges: Over the next decade, Oregon’s need for clean energy is expected to grow exponentially thanks to rising demand for electricity from data centers, heat pumps, electric cars and state climate mandates. And though developers are clamoring to build more solar, wind and battery storage projects, the region faces a major hurdle to expanding the energy flow: It doesn’t have enough transmission lines to connect the projects into the electric grid and carry electricity to homes and businesses (The Oregonian).
Transportation Projects: Eight years after Oregon lawmakers approved a multibillion-dollar transportation bill to fix roads and improve infrastructure, key projects remain unfinished, funding is running short and an audit has uncovered major financial missteps (Salem Statesman Journal).
Portland Land Use: Amid ongoing legal challenges to its costly and controversial water filtration plant, Portland officials are seeking an assist from state lawmakers to stamp out continued opposition. Senate Bill 936 would allow the $2 billion Bull Run water treatment facility — which broke ground east of Gresham last year — to circumvent Oregon’s typical land-use appeals process, a move the city says is needed to ensure the project meets a looming regulatory deadline (The Oregonian).
Salem Tax: Salem City Council on Feb. 10 opted for a less costly local option levy to send to voters in May that would fund parks, the library and Center 50+. Council voted unanimously to direct staff to draft a resolution to refer a five-year local option levy to voters on May 20 at the levy rate of $0.98 per $1,000 of assessed value (Salem Statesman Journal).
Fewer Wineries: In another sign that a wine-industry slowdown is taking a toll in Oregon, the number of wineries in the state fell in 2024, the second straight year of decline. WineBusiness Analytics put Oregon’s winery count at 846 as of this month, down 5% from 895 a year ago. In February 2023, the state had 908 wineries (Portland Business Journal).
Jaguar Investment: Automaker Jaguar Land Rover plans to invest $180 million in its Portland technology hub over the coming decade to develop new driving technology, it said Feb. 11 (Portland Business Journal).
Opioid Funds: A state board overrode a request from Gov. Tina Kotek to spend the entirety of Oregon’s national opioid settlement money over the next two years on harm reduction services and supplies, preserving funding for drug treatment and prevention programs (The Oregonian).
Class Size Debate: Conversations about class size have swept across Oregon over the past few years, particularly for students in elementary grades. But some education experts say lowering class sizes is an expensive intervention that produces only marginal results (Willamette Week).
Drug Deflection Data: It’s been five months since changes to Oregon law made possessing small amounts of hard drugs a crime again, prompting counties to launch programs to deflect drug users away from jail and into addiction treatment or other services. Between Sept. 1 and Jan. 22, only 26 people successfully did so statewide, early data from the Oregon Criminal Justice Commission show (The Oregonian).
Intel Departure: The head of Intel’s data center and artificial intelligence business, Justin Hotard, is leaving the chipmaker after just a year on the job to be CEO of Finnish telecommunications giant Nokia (The Oregonian).
Microchip Furloughs: Semiconductor manufacturer Microchip Technology plans to put workers at its Gresham factory on unpaid leave periodically through the rest of 2025 as the company struggles through a prolonged downturn in revenue (The Oregonian).
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.