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Oregon’s employers face an increasingly complex regulatory environment. As they spend more time complying with an expanding array of rules, they have less to devote to the operation and expansion of their businesses. In describing this problem, the 2022 Semiconductor Competitiveness Task Force report highlights the significant deterioration of a once cooperative relationship between state regulators and regulated entities. It even worries that rule interpretations are sometimes subject to the whims of agency staff. Though the report focuses on one regulated sector, the challenges it identifies affect businesses in all sectors. The absence of clear regulatory requirements, predictable timelines and outcomes, and a constructive working relationship between agencies and employers has a chilling effect on business investments in Oregon.

In addition to addressing these problems, legislators should simplify compliance by making tax policy more consistent, establishing a clear avenue for tax appeals, screening proposed mandates thoroughly and updating the state’s land use system. To these ends, OBI supports a suite of concepts during the 2023 session that would make the work of state agencies more transparent, efficient and effective.

To see a full list of OBI’s proposals for improving Oregon’s competitiveness, check out our Growth and Innovation Roadmap.

In the meantime, here are five bills that focus particularly on the state’s regulatory environment:

ELIMINATE MOVING-TARGET PERMITTING (SB38): Agencies must provide clear regulations, guidelines and internal management directives relevant to each permit type and should be barred from requiring permit applicants to comply with requirements that were neither in effect nor provided to the applicant at the time an application is submitted.

ENSURE RULES ARE BASED ON NECESSITY AND GRANTED AUTHORITIES (SB40): Adding an “arbitrary and capricious” standard to the Administrative Procedures Act would ensure that rules are both necessary and in line with legislatively granted authorities. To establish the need for new rules, rulemaking should require a statement of need supported by technical and legal documentation. This statement should be subject to public notice, public comment and legal challenge.

ENHANCE FISCAL AND ECONOMIC IMPACT AWARENESS (SB42): Rulemaking requires a small business impact statement, which is a good first step. However, many rules have a significant economic effect, whether that be through job loss or creation or through compliance costs passed on to consumers. Proposed rules may also carry significant ongoing costs of administration. Regulated entities, consumers, taxpayers and legislators should have a clear picture of the overall fiscal impact of proposed rules.

ENSURE RULEMAKING CONSISTENCY AND TRANSPARENCY (SB43): Agencies conducting rulemaking must adhere to consistent standards for engaging with the public and regulated entities. Processes should be transparent and easy to navigate, including initial concept, development and adoption. Bias should be removed from the process wherever possible.

CREATE A BUSINESS OMBUDS OFFICE (SB44): Businesses should have access to a resource that seeks to help them succeed. Like the recently established Office of the Taxpayer Advocate, the Office of Business Ombuds would help Oregon businesses that struggle in good faith to understand or meet the state’s complicated regulatory requirements. The office would guide businesses toward compliance and exercise authority to waive penalties. The office would be required to submit biennial reports to the Legislature outlining the state’s most prevalent regulatory compliance challenges and offering recommendations for improvement. Go here to read OBI’s testimony in support of SB44.