Background
Oregon’s regulatory environment has long been an active one characterized by the establishment of rigorous agency rules and the creation of compliance challenges for businesses. However, the past few years have revealed serious flaws. The COVID pandemic generated a flurry of rulemaking activity, as did Gov. Kate Brown’s Executive Order 20-14, which prompted more than a dozen state agencies to produce complex and voluminous regulatory schemes on myriad issues. The regulations themselves present compliance challenges. More problematic, however, has been the state’s attitude toward job creators. In years past, agencies maintained a more constructive, collaborative relationship with regulated entities. More recently, agencies have become resistant – even hostile – to the business perspective. Many state rule writers are reluctant to take any feedback that does not align with their existing world view. Generally, agencies focus on prescriptive rules that make compliance difficult rather than seeking to meet an objective. In doing so, agencies have made no effort to help businesses understand and comply with new regulations.
In 2023 and beyond, OBI will seek major system improvements that address the overall attitude toward business and improve the experience of businesses navigating Oregon’s regulatory framework.
Policy Principles
Business Ombuds: Oregon’s regulatory environment is complicated and opaque. OBI will support the creation of an Office of Business Advocate/Ombuds to help businesses and to advocate on their behalf with state agencies.
Fiscal and Economic Impact Statements: Agencies do not accurately calculate the compliance costs of regulations. OBI will promote legislation that requires agencies to consider actual impacts on businesses when proposing new regulations. Such impacts will include opportunity costs and job losses.
Judicial Review: Oregon needs new standards for review that provide for judicial review for reasons beyond a rule’s constitutionality. Oregon courts have been far too deferential to agency rulemaking in large part because the legal threshold limits what is challengeable. Regardless of proven harm, challenges should be allowed when an association or industry representatives argue the rules are arbitrary and capricious.
Permit Standards: Oregon’s permitting rules have contributed significantly to the erosion of the state’s business climate. The permitting process is often lengthy, and agencies make little effort to help businesses navigate complex requirements. Meanwhile, agencies frequently surprise permit applications by revealing new or additional conditions. Contributing to this problem are the failure of agencies to make all requirements clear before permit applications are filed. Additionally, new issues and requirements are sometimes raised well into the permitting process. OBI will support changes that require permits to be evaluated according to rules in place at the time of application. Such changes will prohibit agencies from surprising applicants with new requirements. Finally, OBI will support legislation that requires agencies to respond within certain time periods.
Rulemaking Coordinators: OBI seeks to decouple the process of rulemaking from rule implementation. To that end, OBI will support legislation to prohibit rule writers and enforcement staff from serving as rule coordinators. OBI also will seek to end rulemaking coordination as an agency function. Instead, using the Office of Administrative Hearings as a model, nonagency rulemaking coordinators would be selected randomly.
Transparency: Rulemaking notices and materials are posted inconsistently from agency to agency. OBI will promote legislation that requires agency websites to provide Rules Advisory Committee members consistent and easy-to-access notices, background documents and other materials. OBI also will pursue legislation that allows the public to access rulemaking training at cost.
Agency Assessments: Agencies lack regular and consistent oversight of their performance. State audit functions have limitations that do not adequately analyze agency work or provide specific actions to address deficiencies. OBI supports the creation of an independent body to assess organizational competence, address conflicting regulations, revamp internal structures and programs that are performing poorly, and ensure that agency behavior is guided by fair, even-handed and appropriate actions.
Limiting Rule Updates: Rulemaking has increased significantly in volume, size and complexity in recent years, and it has become more common for rules to undergo multiple updates in a short timeframe. As businesses need time to assimilate and plan for updated rules, they cannot easily accommodate rapid and ongoing rule changes. Such changes may require major capital investments that quickly become obsolete. OBI will advocate for limiting rule updates unless they meet specific criteria or respond to new legislation.