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Share Your Thoughts on Oregon’s Business Climate

The Oregon Legislature is in the middle of another session, state agency rulemaking is underway for many new and revised policies, and a consequential election is around the corner.

Please take a few minutes and complete OBI’s annual business survey. OBI, in partnership with the Oregon State Chamber of Commerce and your local chamber, wants to hear from businesses across the state about a range of issues related to the state’s business climate, including taxes, regulations and the cost of labor and supplies.

Your responses will help us make the case for bills that help promote a healthy private sector and against bills that will limit the ability of businesses to operate and hamper economic growth.

This survey should take just a few minutes to complete, and an individual company’s answers will remain confidential. Go here to participate.

Legislative Updates

Week two of the legislative session is complete. Today, Feb. 19, is the first major deadline. By the end of the day, bills must be passed by policy committees in their chambers of origin. While this deadline doesn’t apply to bills in the revenue committees, the joint budget-writing committee, and a few others, it is a significant milestone in the session. Bills with any sort of cost attached to them will go to the Joint Ways and Means Committee, others will go straight to the House or Senate floor, and many will simply die. The field narrows.

Leave Alignment: A bill that would alleviate the stacking of leave under a pair of overlapping programs (paid family and medical leave and the Oregon Family Leave Act) passed the Senate last week on a strongly bipartisan vote. After much negotiation, OBI supports SB 1515, which will make the state’s leave programs more workable for employers and less confusing for employees.

CAT Exemptions: OBI testified last week in support of SB 1542, which would raise the corporate activity tax exemption level from $1 million to $5 million. The bill also would also allow medical and dental providers to exclude Medicare and Medicaid reimbursements from taxable revenue for CAT purposes. While the $1 million exemption almost certainly will not be raised this session, OBI is pleased that Sen. Mark Meek, D-Gladstone, chair of the Senate Revenue Committee, is continuing a conversation that began last session. There is growing awareness that the $1million level is too low and places an extraordinary burden on many Oregon businesses. Meanwhile, an adjustment to the exemption threshold can easily be “paid for” by higher-than-expected CAT returns. OBI does not support the position held by some legislators that the exemption level can be adjusted only if collections from those above $5 million increase by a corresponding amount. That is a false premise. OBI will continue to work on this during the 2025 legislative session as part of our Growth and Innovation Roadmap.

Housing Bill: The governor’s signature housing bill, SB 1537, was voted unanimously out of the Senate Committee on Housing and Development last week. Adopted amendments reduced the package’s price tag by $150 million and scaled back the total acreage that cities could pull into their urban growth boundaries. Although OBI was disappointed to see the UGB acreage shrink, that this was a necessary compromise to keep the bill moving forward. The policy package still would be a positive step in addressing housing cost and supply issues, including long-term workforce housing challenges. OBI offered testimony Feb. in support of the bill, which is now in the Joint Ways and Means Committee.

Bonus Bill: Once again, the Legislature failed to pass a bill giving Oregon employers tools used by employers in other states to recruit and retain workers. The House Committee on Business and Labor failed to advance HB 4050 despite the need demonstrated by Oregon’s public and private employers and bipartisan, bicameral support within the Legislature. The bill would have made it easier for Oregon employers to offer incentives such as hiring and retention bonuses when justified by a “business necessity.” The committee chair said he plans to have an interim workgroup tackle this issue.

Offshore Wind: The House Committee on Business and Labor narrowly passed HB 4080 last week. HB 4080 would place extremely strict labor standards on offshore wind projects in Oregon’s territorial waters. HB 4080 would reduce Oregon’s attractiveness for large-scale projects funded through the Inflation Reduction Act, likely benefiting Washington and California instead. OBI and allied groups will make that point to the Joint Committee on Ways and Means in the hope of amending the bill.

Transportation Funding: On Feb. 20, the Joint Transportation Committee will hear three bills (HB 4165, SB 1519 and SB 1543) aimed at addressing the disproportionate cost freight users bear as a result of the current weight-mile tax. Oregon’s Constitution requires that revenues from each vehicle class be proportional to their impact on the transportation system. For several biennia, as reported by the state itself, freight users have been paying more than their fair share relative to passenger vehicles. The latest report from the state economist indicates that heavy-duty trucks overpay by 32%. At the same time, state highway trust fund revenue is failing to keep pace with basic preservation and maintenance of the highway system. This is a critical issue that needs to be fixed, but it is unlikely that we will see the will to address rebalancing the cost allocation or the revenue shortfall this session, which means a solution will most likely be pushed to the 2025 transportation package. OBI will testify in support of the bill concepts and the need to fix this problem.

Daylight Savings: Last week, the Senate Committee on Veterans, Emergency Management, Federal and World Affairs passed SB 1548 unanimously. The bill will head to the full Senate for a vote this week. It would keep standard time in Oregon year-round, beginning in November of this year. It’s not an OBI priority, but we will provide updates if the bill progresses through the House as well.

Emissions Bill: SB 1559, which would have set more aggressive state greenhouse gas reduction goals, did not make the deadline for a committee vote and is dead this session. The bill would have established a goal of reducing emissions to 95% below 1990 levels by 2050 with interim goals in 2030 and 2040. OBI and partner organizations worked this bill extensively in the interim, arguing that additional emissions regulation should be part of a more comprehensive conversation for the 2025 legislative session rather than a rushed conversation in the short session. OBI planned to testify in opposition to the bill, but time in that hearing ran out. Unfortunately, much of the testimony offered implied that Oregon is behind in addressing emissions, disregarding the reality that Oregon has an aggressive goal (reducing emissions to 80% below 1990 levels by 2050) and has dozens of programs aimed at achieving these goals, which are listed in the testimony OBI filed for the record.

Health Mandates: HB 4091 would establish the Health Insurance Mandate Advisory Review Committee, which would allow stakeholders to review proposed health insurance mandates and report their findings to the full Legislature prior to the next session. Currently, proposed mandates are considered on a one-off basis without a comprehensive review of their efficacy, costs and impacts on consumers, providers and payers. The establishment of such a committee continues to be priority for OBI (read our comments in support). The House Committee on Behavioral Health and Health Care referred HB 4091 to the Joint Ways and Means on Feb. 14. A similar bill failed last session largely because of the substantial cost attached to it. The fiscal impact of HB 4091 is slightly smaller than last year, and OBI hopes that enthusiastic bicameral and bipartisan support will help it cross the finish line this year.

Seismic Bill: HB 4044, which would study risk from inhaling hazardous airborne chemicals in the event of a major earthquake, was moved out of committee and is awaiting action in the Joint Ways and Means Committee. OBI testified in opposition to the bill in the session’s first week, noting that the U.S. Environmental Protection Agency already regulates facilities that could release hazardous substances under similar circumstances. OBI has had productive conversations with the committee chair and will continue to engage with her and Gov. Kotek’s staff about this bill.

Taxpayer Confidentiality: HB 4031 is scheduled for a public hearing on Feb. 21 in the House Revenue Committee, at OBI’s request. The bill is a placeholder that will contain language clarifying that taxpayer information must be treated confidentially at the local level. While OBI believes that state and federal law prohibit the disclosure of local tax information, we are pursuing clarification in statute in response to a recent public records request for local taxpayer information. Members of both the House and Senate revenue committees are aware of the importance of this legislation and are supportive.

Canola Bil: HB 4059 was moved out of committee Feb. 15. The bill would limit production of both genetically engineered brassica seed and non-GE brassica seed, used for canola oil production. Since the bill’s requirements go beyond recommendations from the Oregon Department of Agriculture and are not supported by extensive research conducted at Oregon State University, this bill appears to be driven by anti-GE politics rather than a desire for reasonable agriculture policy. OBI submitted testimony for the record and signed onto a logo letter opposing the bill.

Property Tax: Last week, the House Rules Committee heard HJR 201, a constitutional referral to voters that would create a statewide taxing authority in Oregon and a $0.25 per $1,000 property tax. The tax would apply to all real property and all personal property, tangible or intangible, located within the state. Proceeds would fund “public safety,” which is not defined in the resolution. Of course, OBI supports robust and effective public safety, but this is an ill-defined proposal that addresses an issue better suited to budget writers. No action on the resolution is expected, but OBI will watch it closely. Notably, at last count, approximately 1,400 pieces of testimony opposing the proposal were submitted. That’s an astounding number. Only eight were submitted in support of the measure, with four from the resolution’s sponsor.

Notable News

Bob Moore: Bob Moore, a co-founder of international whole-grain foods manufacturer Bob’s Red Mill, has died at 94. The Milwaukie, Ore.-based company announced that Moore passed away at home Feb. 10 (OPB).

Columbia in Space: Columbia Sportswear’s patented Omni-Heat technology will be part of what the United States hopes is its first successful lunar surface landing in 50 years. Houston-based Intuitive Machines, a space exploration company researching the commercial landscape of the moon, launched its Nova-C lunar lander Feb. 14 outfitted with Omni-Heat fabric (Portland Business Journal).

Exports Fall: Oregon exports dropped by more than $6 billion last year, an astonishing 20% plunge that wiped out two years of historic gains (The Oregonian).

Business Assistance: Small businesses affected by January’s winter storm that battered the Portland area and other parts of Oregon can apply for federal low-interest disaster loans (The Oregonian).

Metro Lawsuit: A Portland-area environmental group is mounting a legal challenge against Metro, alleging the regional government agency’s recently updated transportation plan doesn’t live up to the aggressive climate goals mandated by the state and excuses major freeway projects that work against them (The Oregonian).

Judges’ Concerns: On Feb. 5, Oregon Chief Justice Meagan Flynn wrote to two leading Democratic lawmakers about a key element in their wide-ranging proposal to address the state’s addiction crisis. Writing on behalf of Oregon’s judges, trial court administrators and court staff in 27 judicial districts, she outlined a detailed list of concerns that some of their ideas would pose for the judiciary (Oregon Capital Chronicle).

Electricity Rates: Pacific Power has asked the Oregon Public Utility Commission to approve a 16.9% residential rate hike, effective next year. The company estimates that would raise the average bill of residential customers by about $30 per month (OPB).

Sawmill Closure: Interfor Corp’s Philomath sawmill is closing this winter, eliminating about 100 jobs. The company said Feb. 15 it is shutting down the mill immediately and will wind down operations between now and May. Interfor cited high log prices and a weak lumber market for the closure (The Oregonian).

Portland School Cuts: Portland Public Schools is facing tens of millions of dollars in cuts. In a letter to the Portland Public Schools community Feb. 13, outgoing Superintendent Guadalupe Guerrero said to expect $30 million in cuts for next year’s 2024-25 budget. Since 90% of the district budget pays to operate schools, he said the impact on students and educators is “unavoidable” (OPB).

Salem Teachers: The Salem Keizer Education Association on Feb. 15 declared an impasse in contract negotiations with Oregon’s second-largest school district. While the teachers union and Salem-Keizer Public Schools have made progress on several issues, SKEA leaders said workload and class-size caps remain sticking points (OPB).

Bend School Levy: Bend-La Pine Schools is considering a five-year local option levy for the May ballot that would raise about $23 million per year from increased property taxes. The rate would be $1 per $1,000 of assessed property value (The Bulletin).

Failing Schools: Students around the country have shown promising signs of rebounding from the COVID era’s massive disruptions to learning, according to a first-of-its-kind multi-state analysis by researchers at Harvard and Stanford universities. But not in Oregon. Unlike in the 29 other states studied, Oregon students as a whole have failed to regain either reading or math skills (The Oregonian).

Property Tax Dispute: Lane County has settled a property tax dispute with a company hoping to reopen a huge electronics plant in Eugene, clearing a path to restart production there as early as this fall. The tax dispute had threatened to add millions of dollars to annual operating costs for an Ohio company called Stratacache, which bought the factory and its 200-acre site four years ago (The Oregonian).

Semiconductor Verdict: A federal jury took less than two hours to rule in favor of Lattice Semiconductor in a dispute over whether the Hillsboro company hid that its chips were ineligible for export, bringing an abrupt end Feb. 15 to an 11-day trial (The Oregonian).

Intel Permit: Oregon regulators have issued a draft permit that would approve Intel’s proposed multibillion-dollar factory expansion in Hillsboro. Intel seeks to double the amount of greenhouse gases it would be allowed to emit in Oregon, along with sharp increases in allowable emissions of several other pollutants. The Oregon Department of Environmental Quality’s draft permit largely approves the company’s request and sets guidelines to monitor its activities (The Oregonian).

Nike Layoffs: Nike CEO John Donahoe told employees in an email Feb. 15 that the company will lay off 2% of its workforce, a figure that suggests the company could eliminate more than 1,500 jobs (The Oregonian).

Dutch Bros Move: Drive-thru chain Dutch Bros said Feb. 14 it will spend as much as $41 million on relocation costs, severance benefits and capital expenses when it relocates 40% of its corporate jobs from its Grants Pass headquarters to the company’s office in Arizona (The Oregonian).

Umatilla Electric: The Umatilla Electric Cooperative became one of the state’s big polluters beginning in 2018. By 2020 its carbon emissions had doubled. In 2021, it doubled again. It’s now the third-largest emitter of greenhouse gases among all Oregon utilities because of the construction of Amazon data centers (The Oregonian).

Amazon Electricity: Amazon announced Feb. 9 it will begin buying clean electricity to help power its eastern Oregon data centers, marking its first big step toward renewable energy in the state. The company will also contribute $1.2 million to a nonprofit that aims to install solar panels on nonprofits’ rooftops in the community (The Oregonian).

U.S. Chamber Releases Interactive Business Application Map

On Feb. 2, the U.S. Chamber of Commerce released an interactive map showing state-level business application information for 2023. Supported by U.S. Census Bureau data, the map allows users to learn how many new business applications were filed in their states in 2023, what percentage of these applications are expected to produce actual businesses, and how their states stack up against the rest of the country.

In Oregon, 56,662 new business applications were filed in 2023, and 12.8% more were filed in December 2023 than in December 2022. Oregon ranked 32nd among the 50 states according to applications per capita in 2023. Of those applications, 8.4% are expected to lead to business formations within one year.

In comparison, Idaho ranked 17th according to business applications per capita, and 9.5% of its applications are projected to lead to business formation. California ranked 25th according to business applications per capita, and 9.2% of applications are expected to lead to business formation. Washington ranked 38th, with an anticipated formation rate of 9.4%.

Go here to check out the map.

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.

Oregon Business Academy Seeks Volunteers

The Oregon Business Academy is looking for volunteers from businesses to help with this summer’s Business Week, a seven-day summer program for rising 10th through 12th graders held at Oregon State University.

Business Week brings together leaders from a variety of industries to help educate and inspire Oregon’s future workforce. Volunteers can serve in various roles, including as company advisers, judges and mock interviewers. Go here to learn more about volunteer opportunities.

Business Week teaches the fundamentals of building and running a company. Teams of participating students create and run companies, compete against other student companies, explore career fields and meet some of Oregon’s top executives. They also get a taste of college life by living on campus.

Business Week is offering two options, June 23-29 and July 28-Aug. 3. Enrollment for participating students is $1,495, but scholarship support is available for qualifying students. Registration will end March 31.

Learn more about Business Week here.

OBI is a proud supporter of the Oregon Business Academy. Check out our 2023 profile here.

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.