Capitol Connect WP image

What National News Means for Oregon-Based Banks

Regional banks have dominated business headlines in recent weeks as the valuations of institutions like California-based PacWest, Tennessee-based First Horizon and Arizona-based Western Alliance have experienced wide swings. What’s behind the phenomenon, what’s happening in Oregon, and what should businesses served by regional and community banks know?

Join the CEOs of three Oregon-based regional banks June 1 for a panel discussion, “Banking in the News: What Does this Mean for Community Banking in Your Area?” The discussion will be moderated by Linda Navarro, president and CEO of the Oregon Bankers Association.

The panel will include:

The webinar, presented in partnership with the Oregon Bankers Association, will run from 10 a.m. to 11 a.m. and include time for questions and answers.

Go here to register.

 

Legislative and Rulemaking Updates

I-5 Bridge: Following the Joint Committee on Transportation’s failure to act on HB 2098, essentially a $1 billion promissory note to fund Oregon’s share of the I-5 bridge replacement, transportation stakeholders have been trying to determine what comes next and what will satisfy federal grant requirements for the project to be eligible for up to $3 billion from the Infrastructure Investment and Jobs Act. The next move is likely the inclusion of a portion of the funding in a session-end budget bill. Because multi-biennial funding commitments cannot be made in a single biennium’s budget bill, the initial funding commitment is likely to be in the $250 million -$300 million range, perhaps with policy language elsewhere or in a budget note to explain the state’s commitment to the remainder. The current consensus is that, while a bill committing to $1 billion is the best-case scenario for a successful grant application, a commitment of less than that would not disqualify the project from federal funding.

Within the last few days, the Interstate Bridge Replacement Program released renderings for six potential bridge designs. At this point, it’s unclear what each of the design options would cost, but all are presumably within the updated cost estimates provided by project staff a few months ago, which is between $5 billion and $7.5 billion. The bridge designs will be evaluated in the federal environment impact statement (EIS) process required by the National Environmental Policy Act. The current timeline for issuing a draft EIS is late 2023, which would initiate an opportunity for public comment.

Animal Agriculture: The Senate Committee on Rules adopted SB 85 with the -7 amendment last week. The original bill was an attempt to regulate all animal agriculture by establishing strict regulation of confined animal feeding operations (CAFOs). The -7 amendment passed unanimously and scales back many of the burdensome regulatory requirements proposed in the original bill. Although CAFOs are already heavily regulated, the -7 amendment would prohibit issuing permits to new facilities in groundwater management areas, require the submittal of a water supply plan, mandate that permit applicants notify neighbors within one-half mile of the operation during the public comment period, and prohibit increasing the number of animals at a facility. While the need for legislation remains questionable, OBI is pleased to see more reasonable requirements than those in the original bill, which would have set arbitrary limits on the number of animals allowed at an individual CAFO.

Leave Alignment: SB 999, which begins the process of aligning Paid Leave Oregon and the Oregon Family Leave Act by ensuring the benefits available under each program run concurrently, using the same definition for when a person is a family member through affinity, and eventually applying the same definition of “benefit year” to each program, passed the House May 25. This serves as only the beginning step. Much more work is needed to consolidate the programs. OBI will host a webinar with officials from Paid Leave Oregon Aug. 4 to discuss statutory change and other operational items. The webinar will run from 10-11 a.m. Stay tuned for details.

Crime Package: The House passed SB 340 on May 23. The bill, which now heads to the governor’s desk, will make it easier to combat organized retail crime by changing how those thefts are charged, prosecuted and penalized. Two companion bills, SB 318 and SB 900, have been assigned to the Joint Subcommittee of Ways and Means on Public Safety. SB 318 would fund an analyst and two investigators in the Oregon Department of Justice to support prosecution efforts, and SB 900 would provide grants to local governments to fund strike forces. Referral to a subcommittee is a good sign, and these bills have support.

K-12 Funding: Following the better-than-expected June revenue forecast, legislative leaders announced their support for a massive increase in the state K-12 education budget. The initial legislative budget targeted $9.9 billion in school funding for the 2023-25 biennium. Legislative leaders are now proposing $10.2 billion. This would constitute a $700 million increase over current service levels. Current service level refers to the estimated funding required to maintain existing services given various cost increases. In addition to the increase in K-12 funding, legislative leaders are also now calling for $140 million for early literacy programs. New spending at this level for early literacy has been a priority for Gov. Kotek but had been largely sidelined by the Legislature until the recent revenue forecast. Some are concerned that this level of spending may not be sustainable.

Universal Health Plan: SB 1089 is scheduled for a May 30 work session in the Joint Ways and Means Subcommittee on Transportation and Economic Development. The bill would create a Universal Health Care Governing Board to continue the work of the Task Force on Universal Health Care. The bill would require the board to present a comprehensive plan for a single-payer universal health plan, including a funding plan, by Sept. 15, 2026. The Senate Rules Committee passed the bill last month. As a reminder, the final report presented by the Task Force on Universal Health Care suggested that such a system would require new and increased taxes amounting to more than $20 billion per year.

Apprenticeship Requirements: Unfortunately, a bill that OBI opposed earlier this session in the House Committee on Business and Labor has been assigned to the Joint Subcommittee of Ways and Means on Transportation and Economic Development. HB 2649, which would increase the number of apprenticeships required on certain public projects to 15% and broaden the types of projects to which that requirement would apply, is seemingly on track for a floor vote. This requirement would be incredibly difficult, if not impossible, to meet, and the bill would penalize contractors for failing to meet it.

Opportunity Zones: OBI continues to lead the opposition to HB 3039, which would disconnect Oregon from the federal Opportunity Zone program. A second public hearing on the bill took place last week, this time in the Joint Committee on Tax Expenditures. The program was created in 2017 and is designed to bring investments into communities suffering from economic blight and insufficient job opportunities. The program encourages these investments by allowing investors to defer capital gain taxes if those gains are reinvested in qualified areas. There are more than 80 designated zones in Oregon, 76% of which have received investments to date. This is the highest rate in the country, according to a recent study by the Economic Innovation Group. The path for the bill is unclear given opposition of most (if not all) Republicans on that committee as well as the skepticism expressed by some Democrats.

 

Notable News

Debt Ceiling: President Biden and House Republicans have reached an agreement in principle to suspend the debt limit and cap spending. However, congressional leaders from both parties still must find the votes to pass the agreement. CNN provides a quick look at the details of the bill. They include:

  • The $31.4 trillion debt limit would be suspended until 2025, after the next presidential election.
  • Non-defense spending would remain flat in fiscal year 2024 and increase 1% in 2025.
  • Work requirements for some adults receiving food stamps would be broadened temporarily.
  • About $28 billion in COVID-relief funding would be rescinded.
  • About $20 billion of the additional $80 billion in IRS funding contained in the Inflation Reduction Act would be repurposed.

Ballot Measure Ambiguity: The recently adopted constitutional amendment that penalizes lawmakers for walkouts is likely to be challenged by some of the Republican who’ve been boycotting the Senate since May 3, Willamette Week reports. One component of any challenge surely will focus on vague language dictating the effective date of the measure’s penalty. Measure 113, which passed in November, bars legislators who accumulate at least 10 unexcused absences from serving “for the term following the election after the member’s current term is completed.” Several Republicans involved in this session’s walkout will face re-election in 2024. However, their current terms end two months after the November 2024 election. That means the election after their current terms end would happen in 2028, possibly giving them a four-year reprieve.

Trapped Bills: The Oregonian takes a look at some of the hundreds of bills that are likely to die unless Senate Republicans return to the Capitol. Senate Minority Leader Tim Knopp, R-Bend, has said that his caucus will return on the session’s final day to pass a budget and vote on “substantially bipartisan” bills. Senate President Rob Wagner, D-Lake Oswego, has said he won’t let Republicans choose the bills on which to vote.

State Vacancies: Nearly one-fifth of jobs at Oregon agencies are vacant, according to a report compiled by one of the state’s largest public employee unions. The analysis, released May 24, shows that roughly 8,600 permanent state jobs were vacant in April. Agencies with high rates of turnover include the Oregon Youth Authority, the Oregon Health Authority and the departments of justice and transportation. The Service Employees International Union Local 503 based the report on Department of Administrative Services data, The Oregonian reports.

Union Recall: Oregon’s largest private-sector union has announced plans to recall one of the Legislature’s most labor-friendly members, Willamette Week reports. Rep. Paul Holvey, D-Eugene, angered the United Food and Commercial Workers Local 555 by declining to advance the union’s priority bill, which would have required cannabis companies to sign labor peace agreements to obtain or renew licenses. The National Labor Relations Act pre-empts the requirement.

Booze Fee: The Oregon Liquor Control Commission is at the center of a battle over a 50-cent surcharge on each bottle of hard liquor the state sells, Willamette Week reports. Gov. Kotek recommended the surcharge to raise money for addiction and mental health services. However, representatives of the state’s distillers and hospitality industry have pointed out during a pair of OLCC hearings that Oregon already has the nation’s second-highest effective tax on liquor thanks, in part, to a “temporary” 50-cent surcharge that was imposed in 2009 and has been renewed every two years since. The OLCC will vote on the proposed surcharge June 15.

 

OBI Member Profile: Blue Heron Vineyards

The Willamette Valley is the heart of Oregon’s wine industry, and for good reason. It contains two thirds of the state’s vineyards and wineries. But grapes grow well in other parts of the state, too, including some that are better known for timber production.

One of these is the Umpqua Valley, where family owned and operated Blue Heron Vineyards produces fruit for some of the state’s best-known wineries, including A to Z Wineworks, Erath Winery and the Union Wine Company. Headquartered just west of Roseburg, Blue Heron grows several grape varieties on about 720 acres, including pinot gris, chardonnay and, of course, pinot noir, which accounts for about 70% of its plantings.

Go here to learn more about Blue Heron Vineyards and the family that transformed a former cattle property into a significant part of Oregon’s wine industry in less than 15 years.

 

OBI Members Can Save on Furniture, Supplies and More with New Benefit

Whether your business wants to save on office furniture, cleaning supplies or remote working technology, OBI’s partnership with ODP Business Solutions can help.

After setting up an online account, OBI members can shop for a wide range of goods and services and even receive free next-business-day delivery on qualifying orders of $50 or more. To make the process as simple as possible, ODP provides experienced account managers and a range of payment options, including single account billing and consolidated billing for multiple locations.

Go here to learn more about this benefit and register for an account.