Jan. 23, 2023 Capitol Connect Newsletter - Oregon Business & Industry

Capitol Connect to Appear Every Monday During Session

Beginning Jan. 23, the Capitol Connect newsletter will be distributed every Monday until the conclusion of the legislative session. At that time, it will return to its biweekly distribution schedule.

OBI’s website will feature regular updates from the session as well, including testimony by members of the policy team and timely developments on important bills. Such updates can be found on the OBI blog and the 2023 Legislative Session page, which also features links to OBI’s Growth and Innovation Roadmap, OBI’s 2023 Policy Principles and other relevant material.

Notable News

Wilhelms Column: In a guest column published Jan. 19 by the Portland Business Journal, OBI President and CEO Angela Wilhelms writes about Oregon’s competitive challenges and possible solutions. These and other recommendations appear in OBI’s Growth and Innovation Roadmap.

Analog Devices Expansion: Analog Devices will spend about $1 billion to double production capacity at its semiconductor plant near Beaverton, The Oregonian reports. To boost production, Analog Devices will convert storage space inside its factory into manufacturing space.

Bend Parking Requirements: At its first meeting of the year, the Bend City Council on Jan. 18 voted to eliminate minimum parking requirements for new developments, as directed by the Department of Land Conservation and Development’s recently adopted Climate Friendly and Equitable Communities rules, KTVZ reports.

Lawmaker Loses Assignments: Rep. Brian Stout, R-Columbia City, has been stripped of all committee assignments, the Oregon Capital Chronicle reports. The freshman lawmaker is subject to a restraining order requested by a former campaign staffer who alleges Stout sexually assaulted and threatened her.

Semiconductor Package: The Oregonian writes about the bipartisan legislative effort to revitalize the Oregon’s semiconductor industry and attract billions of dollars in federal support.

Portland Office Vacancy: Downtown Portland’s office vacancy rate continued to rise through the end of 2022, the Portland Business Journal reports. The fourth quarter vacancy rate, at 27%, topped the third quarter rate of 26%. The vacancy rate in the city’s suburbs, meanwhile, was 15% in the fourth quarter.

Legislative and Rulemaking Updates

Session Fully Underway: While the Legislature convened on Jan. 9 to organize, adopt chamber rules, elect leaders and the like, legislative activity began in earnest on the Jan. 17. As of Friday, 1,945 measures had been introduced. More will come.

In December, Sen. Dallas Heard, R-Roseburg, announced his resignation effective Jan. 1. Heard’s term had two years remaining. County commissioners chose Rep. David Brock Smith, R-Port Orford, to fill the vacancy. The process to fill the vacancy that now exists in the House is underway.

Tax and Fiscal: Something lawmakers and the public will hear much about this session is the tight fiscal reality facing budget-writers. This Dec. 7 Oregonian story discusses some of these pressures, which stem in large part from increased spending during periods of growth and the use of one-time stimulus money. There are two quarterly economic forecasts before the final budget gets inked (February and May), but legislative leaders are already sending strong signals about the difficult spending decisions that will unfold. With this as the backdrop, OBI is closely watching numerous measures introduced that would raise taxes, ask voters to repeal the kicker and minimize tax incentive programs.

Both the House Revenue Committee and the Senate Finance and Revenue Committee held informational hearings during the first week of session. As is the case at the beginning of every long (odd year) legislative session, these committees provide members with summary information detailing Oregon’s complex tax and revenue structure. These summary presentations are valuable primers. Click here for the personal income tax presentation and here for the corporate income and CAT presentation.

Economic Development and Regulatory Reform: OBI was invited to present at the first hearing of the House Economic Development and Small Business Committee on Jan. 17 about our perspective on economic development. Scott Bruun took advantage of this opportunity to highlight aspects of our Growth and Innovation Roadmap and provide the committee with insights from our statewide manufacturing bus tour last summer. This committee and the Joint Semiconductor Committee will be the first points of discussion for several of the tax incentive and regulatory improvement concepts OBI is supporting. Read Scott’s testimony here.

On Tuesday, Jan. 24, OBI will testify on SB 44 during a public hearing in the Senate Committee on Labor and Business. This is the first of our regulatory improvement concepts to be heard this session. SB 44 would create the Office of Business Ombuds at the Department of Administrative Services. This office would provide a one-stop shop for businesses struggling to navigate Oregon’s complex regulatory and permitting environment. The office would also provide necessary feedback to the governor’s office and the Legislature on recurring regulatory roadblocks and systemic challenges faced by businesses. It’s our hope that policy makers would use that information to make customer-oriented improvements to our problematic regulatory system.

Energy and Environment: Like several other committees, Senate Energy and Environment in its first week focused on discussing priorities and hearing statutorily required reports to the Legislature from various agencies. Notable legislative priorities from the committee and individual committee members include renewable diesel, recommendations from the Resilient Efficient Building Task Force, carbon sequestration from natural and working lands, and the development of renewable hydrogen capacity. Also of note is the new “youth voices” portion that will be on every committee agenda and provide an opportunity for students to tell the committee about an energy or environment issue that is significant to them. Students who testified last week focused heavily on concerns around climate change and the need for policymakers to take fast and decisive action. K-12 students can sign up to testify here.

The House Committee on Climate Energy and Environment will hear HB 2659 on Jan. 25. This bill, requested by several cities as well as the League of Oregon Cities, will provide critical fixes from a local government standpoint to the Department of Land Conservation and Development’s Climate Friendly and Equitable Communities (CFEC) regulations adopted earlier this year. CFEC, undertaken in response to former Gov. Kate Brown’s climate executive order 20-04, established extremely stringent, unworkable and costly rules regulating development. The changes in HB 2659 are a good step forward, though OBI is still analyzing all recommendations in light of employer concerns.

Transportation: The biggest transportation conversation of the session is the Interstate 5 bridge replacement project. As that continues to unfold, related committees are starting to move bills while continuing to gather information and hear reports.

The Joint Committee on the Interstate 5 Bridge will hold a work session Jan. 26 on SB 431, which would appropriate $125 million to ODOT for the replacement of the Hood River-White Salmon Bridge. As in past sessions, OBI supports this project and will submit testimony.
The Statewide Tolling Rules Advisory Committee (STRAC) is scheduled to meet for the first time on Jan. 27 from 9 a.m. to 3 p.m. OBI’s Sharla Moffett has been named to the STRAC, which will meet for up to 12 months to make recommendations on Oregon’s tolling rules. Click here to livestream the meeting, here for the agenda, here for the draft committee charter, here for the committee roster and here for a description of various work happening on tolling.

Retail: The Organized Retail Crime Task Force met Jan. 17 to discuss legislative concepts that it will recommend. The task force includes district attorneys, law enforcement, employee groups and retailers of all types. We expect these concepts to be introduced as amendments to a placeholder bill in the Senate Judiciary Committee.

Health Care: The Cost Growth Target Advisory Committee met on Jan. 18 and endorsed the Prescription Drug Affordability Board’s 2022 annual report, which includes recommendations for legislative changes. The recommendations include transparency in supply chain rebates, expanded reporting requirements for patient assistance programs and expanded insurer reporting requirements to the Drug Price Transparency program. In recognition of inflation and other economic factors that have occurred since the cost growth target of 3.4% was set, the group agreed to delay implementation of performance improvement plans (PIPs) for one year. However, payers and providers who exceed the target may still choose a PIP.

Education and Workforce: On Jan. 26, the Senate Education Committee will hear SB 424, which prohibits post-secondary institutions from refusing to provide transcripts to current or former students who have unpaid fees. Bill proponents seek to reduce barriers to employment for job seekers who are required to provide post-secondary transcripts to potential employers but can’t obtain them as a result of unpaid fees. OBI supports this concept.

Several bills aimed at addressing Oregon’s child care shortage have been introduced. On Jan. 23, the House Early Childhood and Human Services Committee will hear HB 3005, which creates a child care facility fund through which the Housing and Community Services Department would help eligible applicants to pay for costs related to early child care infrastructure. Such costs include land acquisition, new construction, repairs, retrofits and the like. The fund would be seeded with a $100 million general fund appropriation.

Schnitzer Steel Named World’s Most Sustainable Company

Last summer, participants in OBI’s inaugural Manufacturing and Innovation Roadshow toured Schnitzer Steel’s Cascade Steel Rolling Mills. The mill, an OBI member, turns recycled scrap metal into high-quality steel products.

This month, Schnitzer Steel topped research firm Corporate Knights’ ranking of the world’s most sustainable companies, supplanting wind turbine manufacturer Vestas Wind. According to Corporate Knights, Schnitzer is the first steel company to top its Global 100 sustainability list.

Corporate Knights attributed Schnitzer’s ascent to improvement in the company’s energy, carbon and waste productivity. The company was the 15th ranked member of the 2022 sustainability list.

According to Reuters, the Global 100 ranking is used by Goldman Sachs and other companies to build private wealth portfolios.

Profile: Freres Engineered Wood Develops Veneer-Based CLT Product

As they pass through Mill City on their way to and from the Willamette Valley, most Oregonians are unaware that just to the south, across the Santiam River, a $40 million mill is producing an innovative timber product that can support a high-rise building while minimizing its environmental footprint.

Freres Engineered Wood opened its Mass Ply plant less than a decade ago, yet its work can now be found be found in a wide variety of structures, from multifamily residential buildings and nonprofit headquarters to the massive timber roof that will cover Portland International Airport’s new main terminal.