Legislative and Rulemaking Updates
A significant deadline passed on March 17, though it was fairly anti-climactic. This was the date by which bills in policy committees needed to be scheduled for a vote in those committees to stay alive. Unfortunately, the practice has been to simply schedule things to meet this requirement. Thus, not much actually dies with the deadline. The next deadline is April 4, which is the date by which the vote to get bills out of committee needs to occur.
Semiconductor Bill: SB 4, the semiconductor and advanced manufacturing investment bill, passed out of the Joint Semiconductor Committee on a 12-2 vote on March 15. The bill now goes to the Joint Ways and Means Economic Development Subcommittee, and then to the full Ways and Means Committee before heading to the House and Senate floors for full chamber votes. This bill would provide $200 million in loans and grants to semiconductor and advanced manufacturing applicants through Business Oregon, the state’s economic development department. The bill also would also create new authorities for the governor to expedite zoning and land use decisions related to the industry. Unfortunately, the bill is not enough, and many members of the committee acknowledged this on the record. A robust and successful package would include appropriate tax credits; enterprise zone, strategic investment and gain share incentives; and a plan (with resources) to accelerate industrial site readiness. OBI will keep working other facets of the package. A story in The Oregonian last week captured some of the frustration around missing elements, and an editorial March 19 spoke to key arguments as well.
Indirect Sources: HB 2396, which would regulate indirect sources of emissions, is effectively dead. OBI, in conjunction with a broad coalition, was successful in killing a nearly identical bill in the 2021 session and we provided opposition testimony at last month’s public hearing. This has now become a perennial conversation, and we expect it to return in a future session.
Product Labeling: There is a new push to require product labels to indicate the recyclability of packaging. This so-called “truth in labeling” law, which would be amended into SB 123, would require QR codes on packaging to provide recycling information to consumers. The bill presents immense logistical issues. Further, it would create an Oregon-only situation that is not conducive to a market of the state’s modest size. California passed a truth in labeling law in 2021 with compliance to begin in July 2025. New Jersey and New York have followed suit. With these much larger economies out front, it is far more prudent to see where their rulemaking and compliance end up rather than creating a unique set of standards in Oregon.
Housing and Homelessness: Last week, the House passed two bills, HB 2001 and HB 5019, that would direct approximately $200 million to build more affordable housing and fund expansion of homeless services. HB 2001 would give local governments some expanded land use authority for housing but falls well short of the systemic land use reform necessary to create enough supply to effectively drive down housing costs. The bills also would do little to address much-needed permitting and regulatory improvements that would reduce costs and development time.
Regarding housing capacity, OBI testified in support of HB 3302, which would create a low-income housing tax credit designed to incentivize the construction and maintenance of affordable multifamily housing. The relative scarcity and high cost of land, coupled with regulatory and systemic cost drivers, leads to prohibitively high costs for development. There is little to no incentive to build affordable housing. Credits available through HB 3302 would allow developers and investors to mitigate a portion of such costs in return for building high-quality multifamily housing. The bill is scheduled for a work session on March 30. OBI would also like to see a tax credit or other incentives for investment in middle-market housing, as this is a significant workforce issue.
Nonroad Engine Emissions: A public hearing and work session are scheduled March 30 for SB 525, which would prohibit engine exhaust from new nonroad engines of 25 horsepower or less. By 2026, only zero-emitting engines would be sold in Oregon. This would apply to equipment such as leaf blowers, some construction equipment, lawn mowers and even some small tractors. There has been no discussion to date about this bill, so the upcoming public hearing will be informative. OBI will engage with retailers and others to understand the bill’s implications.
Hiring and Retention Bonuses: On March 13, the House Committee on Business and Labor heard HB 3205, which would exempt hiring and retention bonuses from Oregon’s equal pay statute. This is a priority for OBI. Reps. Janelle Bynum, D-Happy Valley, and Hai Pham, D-Portland, who are House sponsors of the bill, along with a panel of public- and private-sector employers emphasized the need for hiring and retention bonuses to combat workforce shortages. Oregon is the only state with such restrictions on these bonuses. The bill is scheduled for a committee vote on March 27.
Data Centers: The House Climate, Energy and Environment Committee has scheduled a public hearing March 20 on HB 2816. A vote is scheduled for March 27. The bill targets data centers in eastern Oregon, requiring them to meet a renewable portfolio standard (RPS) for the electricity they consume. There are many problems with the bill, including its targeting of a specific economic sector, its potential to deprive eastern Oregon communities of economic opportunity and its proposal to require an energy consumer, rather than an energy producer, to meet an RPS.
Employer Burdens: OBI has testified in opposition to three bills that would place substantial additional substantial burdens on employers. SB 851, which would hold employers liable for everything from poor performance reviews to disagreements between employees, and SB 907, which would allow employees to refuse work they deem too dangerous and take paid sick leave when they do so, were both heard by the Senate Committee on Labor and Business. Meanwhile, the House Committee on Business and Labor heard HB 3471, which would prohibit no-rehire provisions in workers’ compensation settlements. All are scheduled for committee votes in the coming weeks.
Notable News
Semiconductor Bill: The Joint Semiconductor Committee on March 15 advanced a bill that aims to advance Oregon’s semiconductor industry. As The Oregonian reports, however, the bill does not provide the land-use certainty needed to attract substantial investment.
Paid Family Leave: Sen. Kathleen Taylor, D-Portland, would like to give the state flexibility to further delay Oregon’s paid family and medical leave law, for which employers and employees began to contribute payroll taxes in January. The problem, The Oregonian notes, is that the program’s trust fund contains too little money to begin paying benefits in September, as planned. It is far too early to tell whether a delay will happen, so for now employers should assume that nothing is changing.
Public Sector Pay: Oregon’s human resources office has released an analysis of state agency compensation, The Oregonian reports.
Gresham Project: An investment tax credit component of the CHIPS Act likely has contributed about $112 million to Microchip Technologies’ $800 million expansion of its Gresham manufacturing facility, according to the Portland Business Journal.
Interstate 5 Bridge: Federal transportation authorities have told planners for the proposed Interstate 5 bridge replacement project to consider the costs and impact of a drawbridge, The Oregonian reports. The Coast Guard is unsatisfied with the 116-foot height of the proposed span.
Multnomah Tax: Willamette Week takes a look at the proposed capital gains tax on which Multnomah County residents will vote in May.
Beverage Taxes: A new push is coming to raise beer and wine taxes in Oregon, the Portland Business Journal writes.
Equal Pay Act Exemptions: The Oregonian writes about an OBI-backed bill that would exempt signing and retention bonuses from requirements imposed by the state’s equal pay act. The bill enjoys support from public-sector and private-sector employers.
Rules for Paid Leave Oregon Small Employer Grants Released
The Oregon Employment Department has adopted permanent rules governing to small employer assistance grants for the state’s paid family and medical leave insurance program, Paid Leave Oregon. The rules describe how employers should count employees to determine employee size. They also provide details on the eligibility and application requirements for small employer assistance grants, explain different grant amounts and establish a minimum number of months an employer must pay PLO contributions if they are awarded an assistance grant.
Paid Leave Oregon is funded by a 1% payroll tax, of which employees pay 60% and employers 40%. Employers with fewer than 25 employees are not required to pay the employer share of the tax, but they must collect the employee share. If small employers do opt to pay the employer share, however, they are eligible to apply for and receive assistance grants.
Go here to read the rules related to small business grants.
OBI Members Make ‘100 Best Companies To Work For’ List
More than a dozen OBI member companies are among the 100 best companies in Oregon to work for, according to Oregon Business, which compiles the annual list.
Comments from this year’s company surveys indicate that flexibility continues to be important when attracting and keeping employees. Many survey respondents also praised employers for offering flexible working hours and for creating cultures that let them prioritize their families.
OBI members included in this year’s list:
- Harper Houf Peterson Righellis
- Hayden Homes
- Rogue Credit Union
- The Parners Group
- David Evans and Associates
- Summit Bank
- Steele Electric
- Farleigh Wada Witt
- Rich Duncan Construction
- Tec Laboratories
- Work Sharp
- General Pacific
- Kidder Mathews
- Vista Capital Partners
- Madden Industrial Craftsmen
- RHT Energy
- Barran Liebman
- Evergreen Consulting Group
Companies included on the list were honored March 2 at a happy hour at the Oregon Convention Center.