DEQ Delays Enforcement of Problematic Clean Trucks Rules
What happened: On May 15, the Department of Environmental Quality announced a two-year delay in the enforcement of its Advanced Clean Trucks Rules, which require manufacturers of medium- and heavy-duty vehicles to ramp up the percentage of zero-emission vehicles sold in the state, beginning in 2025. The delay, announced in a memo from DEQ Director Leah Feldon, pushes enforcement out to the 2027 model year.
The underlying problem: The rules condition the continued sale of conventional, diesel trucks on the sale of zero-emission trucks (effectively, electric trucks) through a formula. While companies (including Portland-based Daimler Truck North America) are engaging heavily in the development of effective electric trucks, the reality is that there is virtually no market demand right now. At the moment, electric trucks cost far more than diesel trucks and haul far less for shorter distances before needing to be recharged. Plus, there are very few places to charge them. There is only one public, pull-through charging station in the entire state, which is located in Portland. The policy also fails to recognize alternative fuels like renewable diesel, which can be used in any conventional, diesel truck. During a Jan. 21 legislative hearing (see video here), Jordan Papé, president and CEO of the Eugene-based Papé Group, explained the limits of current electric truck technology, the impossibility of DEQ’s escalating sales mandate and, ultimately, the price impacts it would have on Oregonians.
The other underlying problem: As OBI’s Oregon Competitiveness Agenda points out, the state’s political culture undervalues the private sector, which leads to conduct by regulatory agencies like DEQ that “contributes to the decisions of businesses to sell, close or invest elsewhere.” Freight hauling is a mobile industry, and trucking companies could easily relocate to other states that don’t have mandates to buy electric trucks. The decision of DEQ and the Environmental Quality Commission to discount science, basic market forces and input from affected businesses in pursuit of an unworkable policy is the product of this political culture. OBI and member companies have been trying to explain the above realities to DEQ for years, but the agency pushed forward with a rule anyway and now finds itself in the position of needing to delay enforcement.
Business and legislative response: OBI and member companies like the Papé Group and Daimler Truck North America have worked for many months – both with DEQ and in the Legislature – to address the problems created by the Advanced Clean Trucks Rules, officially adopted in November 2021. OBI is particularly grateful for the support of legislators from both major parties who – only days before DEQ’s May 15 announcement – indicated a willingness to delay implementation by legislative action.
What’s next: OBI will continue to work with affected businesses, legislators and agency officials to adopt workable regulations that balance environmental protection, market realities and costs to businesses and consumers.
Office of Economic Analysis Issues Key Revenue Forecast
What happened: Oregon’s quarterly economic and revenue forecast, released May 14, predicts slightly lower revenue collections for the 2023-25 and 2025-27 biennia than the Office of Economic Analysis anticipated during its previous forecast. Nevertheless, the state is expected to collect billions of dollars more than the Legislature expected to have when it created the current budget at the close of the 2023 session. And available resources during the coming biennium are expected to exceed resources collected during 2023-25 by a healthy 12%.
This quarter’s forecast is particularly important because legislators will rely upon its assumptions in creating the 2025-27 budget during the remaining weeks of the current session, which must end by June 29.
The forecast argues that federal policy uncertainty has led to “diminished confidence” in the Office of Economic Analysis’ ability to predict revenue accurately. Oregon is highly trade-dependent, making the effects of potential tariffs potentially significant.
Oregon’s struggles: Such speculation aside, Oregon’s economy continues to struggle, thanks in part to the state’s stagnating population and what state economist Carl Riccadonna has characterized as a manufacturing recession. Over the past four quarters of reported data, the forecast notes, Oregon’s GDP has grown more slowly than the national GDP by 1.5 percentage points. Job creation has lagged the national average as well, and the state’s population has continued to grow very slowly.
As a result, the forecast predicts that growth will be “sufficiently slow that labor conditions soften appreciably,” leading to higher unemployment. The forecast predicts individual income growth to slow and business income to decline in 2025. However, growth is expected to return to normal levels in 2026.
The Office of Economic Analysis expects the state to receive less revenue during the current and coming biennia than it predicted in its first-quarter forecast, released in March. Revenue for the 2023-25 biennium is expected to be $162.3 million below levels predicted three months ago.
Plenty of money: The close-of-session general fund forecast for the 2025-27 biennium is expected to be $37.4 billion, 12% more than the state has collected during the current biennium. This rate, the Office of Economic Analysis notes, is “the highest growth expectation for this forecast since 2015-17.” It is also 10 times higher than the state’s GDP growth between 2023 and 2024.
Business climate matters: Gov. Kotek predictably responded to the revenue forecast by criticizing the Trump administration for spreading “uncertainty in our economy.” However, the state’s own policies – including its large and growing tax burden and its suffocating regulatory environment – have contributed significantly to its current economic struggles, including stagnation in job growth that predates the current federal administration. The state’s economic development agency, Business Oregon, acknowledged this in a recently released report describing successful efforts by other states to recruit Oregon businesses.
The surest way for Oregon to confront federal policy uncertainty and to shore up its economy – which produces the tax revenue upon which the state depends – is to follow the recommendations contained in OBI’s Oregon Competitiveness Agenda.
Nominate Your Favorite Oregon-Made Product
The 2025 Coolest Thing Made in Oregon contest has begun.
The third annual competition to identify the state’s most buzz-worthy product kicked off on May 13, when OBI partner Here is Oregon opened the 2025 nomination website. Until July 10, anyone – members of the public and manufacturers alike – can nominate a favorite Oregon-made product.
A panel of judges will choose 16 finalists, which will be arranged on a tournament-style bracket. Through a series of online votes, the field will be cut to eight, to four, and then to two before Oregonians choose a winner, which will be revealed Oct. 22 at OBI’s annual Vision Oregon Event.
To learn more about the contest – and to follow along as the field is narrowed later this year – check out OBI’s Coolest Thing Made in Oregon web page here.
Listen to OBI’s Interviews with Legislative Leaders
OBI’s Oregon Business Matters podcast released two episodes today, one an interview with Republican legislative leaders and the other an interview with Democratic legislative leaders.
In the two episodes, Senate Democratic Leader Kayse Jama, House Democratic Leader Ben Bowman, Senate Republican Leader Daniel Bonham and House Republican Leader Christine Drazan discuss what spurred their interest in legislative service, what leading caucuses entails and more.
Meanwhile, don’t miss Oregon Business Matters’ interview with longtime pollster John Horvick of DHM Research. Horvick talks about how he got into the public-research business, how the business has changed over the past two decades and more.
Oregon Business Matters focuses on insights, issues and initiatives that affect Oregonians’ shared prosperity and the state’s economy.
Episodes can be found on OBI’s website here and on major podcast platforms, including Apple, Spotify and YouTube.
Annual Meeting Event Will Focus on Sports Tourism, Recreation
Register here for OBI’s Annual Meeting, which will focus on Oregon’s sports tourism and recreation economy. The event is open to OBI members and non-members. The program:
Restoring Oregon’s Competitiveness
An Update on OBI’s Initiatives, Priorities and Outlook
Championing Oregon’s Sports Tourism & Recreation Economy
Part I: The Economic Impact
Presented by Dr. Mike Wilkerson, ECOnorthwest
Part II: Statewide Strengths and Opportunities
A Panel Discussion Facilitated by Jim Etzel, CEO of Sport Oregon, and featuring:
Heather Davis, CEO of the Portland Timbers
Natalie King, Sr. Vice President of the Portland Trail Blazers
Samara Phelps, President & CEO of Travel Lane County
And more
The Annual Meeting will take place June 4 at the Salem Convention Center. Doors will open at 3 p.m., and the program will begin at 3:30 p.m. A networking reception will follow, beginning at 5 p.m.
If you have questions about the Annual Meeting or would like to consider sponsoring the event, contact Patti Winter at PattiWinter@oregonbusinessindustry.com.
Oregon Civics Bee Scheduled June 5 in Salem. Come Watch!
Ten middle-school students from across the state will gather in Salem June 5 for the second annual Oregon Civics Bee emceed by Secretary of State Tobias Read, presented by U.S. Bank and organized by OBI in partnership with the U.S. Chamber of Commerce Foundation. The students qualified for the state competition by distinguishing themselves among dozens of their peers at a pair of regional civics bees this spring. The top three finishers at the Oregon Civics Bee will receive cash prizes, and the winner will be invited to represent Oregon at the U.S. Chamber of Commerce Foundation’s National Civics Bee in Washington, D.C., in November.
Beginning in November 2024, 6th, 7th and 8th graders entered the competition by submitting essays explaining how they would use civics principles to address problems they identified in their communities. A panel of judges chose the best essays, and their writers were invited to participate in the contest’s two regional civics bees, one in Tigard and the second in Eugene.
The Oregon Civics Bee will take place at 2 p.m. on June 5 at Willamette University’s Hudson Hall. There’s plenty of room for spectators.
OBI would like to thank U.S. Bank for sponsoring the Oregon Civics Bee and Willamette University for providing the venue.
Legislative and Rulemaking Updates
Next deadline approaches: On May 23, the Legislature will reach the deadline for most committees in the second chamber to take action on bills. A bill dies if it does not get voted out of committee and either sent to the floor or to a committee exempt from deadlines. As a result, OBI is seeing a flurry of amendments as legislators try to negotiate their bills to keep them alive. After May 23, only House Rules, Senate Rules, House Revenue, Senate Finance and Revenue, and joint committees will be able to act on bills. While some bills will die, it’s worth noting that most bills under negotiation are already in those committees.
Unemployment for strikers: SB 916 is scheduled for a committee vote on May 19. That is the last day that the House Committee on Labor and Workplace Standards can act on a bill. At present, OBI is confident that the current version of the bill lacks enough votes to pass. OBI and other employer representatives have been working hard to convince legislators to oppose the bill. SB 916 is also particularly alarming because striking workers could get unemployment benefits for up to 26 weeks. By contrast, a similar bill that recently passed in Washington caps unemployment benefits for striking workers at six weeks. This is a critical time for the bill. THANK YOU to those who have made calls or sent messages about this bill. We ask each of you to do so.
OBI rulemaking bills: After months of protracted negotiations with state agencies, OBI expects its priority rulemaking modernization bills to move forward. HB 2692, led by Rep. Anna Scharf, R-Amity, would ensure that rulemaking processes provide ample opportunity to hear business perspectives, require agencies to justify their decisions, require meaningful fiscal impact analysis and allow the public earlier opportunities to engage in rulemaking. HB 3382, a House Rules Committee bill, would require that rulemaking information is posted in a central location and is easier to navigate. Both bills are scheduled for committee votes on May 28 in the House Committee on Rules.
Lodging tax bill: On May 8, the House Committee on Revenue held a public hearing on HB 3962, which would break a longstanding compromise relating to transient lodging taxes. Currently, local governments are generally required to spend 70% of that revenue on promoting Oregon destinations or investing in tourism facilities. However, HB 3962 would allow local governments to spend lodging taxes as though they were general fund revenue. This proposal would disrupt a longstanding compromise that has worked to spur substantial economic growth throughout the state and helped drive year-round employment and industry growth in some of Oregon’s most rural and tourism-dependent communities. The proposal was originally part of HB 3556, which was referred to the House Committee on Emergency Preparedness, General Government, and Veterans. OBI and others opposed the bill, and it did not have the support to advance to the first chamber deadline. It died. Legislators used a “priority bill” to reintroduce it as HB 3962. This time, the concept was referred to the House Committee on Rules, which isn’t subject to the deadlines.
PERS investments bill: On May 19, the Senate Committee on Finance and Revenue will hold a public hearing on HB 2081, which would require the treasurer and the Oregon Investment Council (OIC) to prioritize reducing the carbon intensity of the PERS investment portfolio. Even though the bill would not require divestment from carbon-intensive investments explicitly, it would place an additional consideration into the mix as the treasurer manages Oregon’s PERS fund. This is in direct conflict with the treasurer’s and OIC’s sole fiduciary responsibility, which is to maximize Oregon’s investment funds. The bill also would shield the treasurer from lawsuits challenging whether investments made under these new provisions violate that fiduciary responsibility. Since the treasurer must already balance risks, including the risks associated with a changing climate, with potential rewards when making investment decisions, the bill is unnecessary. Shielding the treasurer from potential liability threatens the continued viability of the PERS portfolio, which has grown to $94 billion and pays over $400 million in retirement benefits each month.
Discrimination suits: OBI, NFIB, the Oregon Farm Bureau, the Oregon State Chamber of Commerce and the NW Grocery Retail Association have been working hard amend HB 2957, which would eliminate BOLI’s practice of issuing 90-day right to sue letters when it dismisses a complaint. This would mean that, even after getting the benefit of a full BOLI investigation, certain plaintiffs could wait several years to file in civil court for claims subject to a five-year statute of limitations. Despite the majority claiming they would not consider any changes, Sen. Daniel Bonham, R-The Dalles, helped push for some. After a day of difficult negotiations with legislators and BOLI, OBI secured an amendment mitigating the impacts for complaints that BOLI dismisses for lack of substantial evidence. Those claims must be filed within one year or the statute of limitations, whichever is earlier.
Property owner liability: SB 426 would impose liability on property owners and general contractors when subcontractors failed to pay their workers. In other words, the bill would hold people liable for other people’s illegal actions. Despite proponents’ statements to the contrary, the current version of the bill imposes liability on homeowners, including for their primary home. That reality has landed for legislators, and several amendments have been drafted. None, however, properly addressed the issue of liability for owners. The latest amendment would exempt primary residences or real property consisting of five or fewer units on a single tract. This language still causes many issues for housing development, particularly affordable housing. The bill, brought by the carpenters’ union, would allow workers or third parties (including unions) to file lawsuits against owners and general contractors for the alleged actions of subcontractors. The bill is scheduled for committee on May 19.
High speed rail: In an unexpected turn of events, SB 715, establishing the Cascadia High Speed Rail Task Force, died in the Joint Committee on Transportation on May 12. In addition to establishing the task force, the committee was also considering an amendment appropriating $10 million to Metro to provide technical support to the task force.
Crematory bill: HB 3729, which would reduce the mandatory crematory temperature from 1,800 degrees Fahrenheit to 1,600 degrees, was voted out of the Senate Committee on Energy and Environment unanimously on May 12. Oregon is the only state requiring the 1,800-degree temperature standard, which expends about 22% more natural gas than the lower temperature standard adopted by all other states. OBI has worked with members in the death care sector over the last several years to change the regulations, but the Department of Environmental Quality has not done so.
Notable News
Green energy: For all their progressive claims, Oregon and Washington trail nearly all other states in adding new sources of renewable energy. What’s held the Northwest back is a bottleneck Oregon and Washington leaders paid little attention to when they set out to go 100% green, an investigation by ProPublica and Oregon Public Broadcasting found: The region lacks the wiring to deliver new sources of renewable energy to people’s homes, and little has been done to change that (Oregon Public Broadcasting).
Portland grows: Portland added residents for the first time since 2020, according to new data from the U.S. Census Bureau, welcoming a little more than 1,400 newcomers. The city grew by 0.2% to a population of 635,749 in 2024, the Census Bureau reported May 14 in a data release highlighting population change in U.S. cities (The Oregonian).
TriMet exodus: Portland’s public transit system is facing a sobering new reality: TriMet is providing 30 million fewer rides each year than it did before the pandemic, and the recovery shows little sign of accelerating (The Oregonian).
Amazon warehouse: Amazon plans to open a warehouse in Redmond, a relatively small facility the company says will accelerate package delivery in nearby cities and rural areas. The 84,000-square-foot “delivery station” will be the first Amazon has opened in central Oregon (The Oregonian).
Energy market: The Bonneville Power Administration, the region’s largest transmission grid operator, has made the final call to join a new energy market based in Arkansas over one based in California – a controversial decision that critics say could have major implications on electricity costs in Oregon and across the region (The Oregonian).
Reactor company: NuScale Power said May 12 it expects “a firm customer order by the end of 2025” for its small modular reactors. In a call with analysts after releasing its first-quarter financial report after market’s closed, the Corvallis company said talks with “upwards of 10” potential customers were in an advanced phase (Portland Business Journal).
New winery CEO: Willamette Valley Vineyards’ search for a chief executive who can hit the road as its brand champion has led it to a leading figure from online wine retailing. The Marion County winery, one of Oregon’s biggest, on May 12 named Michael Osborn its new CEO (Portland Business Journal).
Manufacturing jobs: President Trump has been upending the global economy in the name of bringing manufacturing back. President Joe Biden signed into law massive investments aimed at doing something similar. The American manufacturing sector is reviving after decades of decay. But there’s something a bit weird undercutting this movement to reshore factory jobs: American manufacturers say they are struggling to fill the jobs they already have (National Public Radio).
Manufacturing program: The Redmond High manufacturing program has grown over the past decade into a powerhouse, with students winning competitions and getting internships and job opportunities right out of high school (The Bulletin).
Trail Blazers sale: The estate of Paul G. Allen on Tuesday announced plans to sell the Portland Trail Blazers franchise. Allen, who purchased the Blazers in 1988 for $70 million, died in 2018. His sister Jody Allen has acted as the franchise chair and is the trustee of his trust (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.