June 17, 2024 Capitol Connect - Oregon Business & Industry (2024)

OBI members consistently point to workforce challenges as a top concern. In response, OBI has created a stand-alone Workforce Development Policy Committee. We are in the process of framing the committee’s scope of work and policy priorities and want to hear from you.

Please take a few minutes to share your thoughts with us by following the link here.

Also, if you are interested in being on the Workforce Development Committee’s distribution list for policy updates, meeting invitations and other relevant information, please email policy manager Katie Koenig (katiekoenig@oregonbusinessindustry.com).

Does your business need help understanding the complexities of state and federal employment law? You’re in luck. On Sept. 25, OBI will host a full-day Employment Law Summit in Wilsonville. Legal experts will cover a variety of employment topics, including:

• Paid Leave Oregon
• Scheduling, overtime and break laws
• The latest from the National Labor Relations Board
• Reasonable accommodations under ADA
• Navigating noncompete and nondisclosure agreements
• Case law update

The summit is open to everyone but will be particularly helpful to HR staff and managers of small and medium-sized businesses. Continuing legal education and HR credits pending.

Registration is $175 and includes all materials and lunch.

Those who register before July 1 will receive a $50 discount.

The summit will run from 9 a.m. to 4 p.m. at the Holiday Inn Wilsonville, which is located at 25425 SW 95th Ave.

Go here to register.

Rulemaking Begins for R&D Credit

During the 2023 legislative session, OBI and others urged lawmakers to revive Oregon’s expired research and development tax credit. Offering an R&D tax credit was necessary, many recognized, to make Oregon more competitive for federal investment through the CHIPS Act and Inflation Reduction Act. A robust R&D tax credit also would make Oregon a more attractive location for business investment generally. The Legislature did create an R&D tax credit in 2023. Unfortunately, its use was restricted to the semiconductor industry.

This month, the Oregon Department of Revenue (DOR) began the process of implementing the credit. OBI and other industry representatives have sought to ensure expansive treatment and the best incentive for investment in Oregon possible. If DOR adopts OBI’s ideas in its final rule, Oregon will gain an economic development tool that closely mirrors one used in other states.

Meanwhile, making the R&D credit available to a greater range of businesses is one of OBI’s top priorities for the 2025 legislative session. Such a change would spur growth in existing businesses, attract new investment in Oregon and help create jobs, prosperity and, of course, tax revenue.

Proposed Plastic Recycling Program Costly and Unworkable

Late last month, OBI submitted comments alongside the Northwest Grocery Retail Association on the plan submitted by the Circular Action Alliance (CAA) to implement the Recycling Modernization Act (RMA). CAA is the “producer responsibility organization” that companies would be required to join as part of the act’s extended producer responsibility requirements. OBI’s comments, and those of several other associations, pointed out that the plan’s cost far exceeds estimates considered when the Legislature debated the RMA in 2021 (the CAA’s proposal included a 68% cost increase). OBI argued that affected businesses need more time and information to understand obligations under the new scheme and everyone – regulators and companies – need more time to determine how the program will work with the Bottle Bill, Oregon’s recently passed mattress recycling program and consumer behavior overall.

The Oregon Department of Environmental Quality is now in the second phase of rulemaking for this program. A public hearing on the draft rules is scheduled to occur June 27, and written comments are due by 4 p.m. on July 26. OBI and other stakeholders are working to push back where the rules are more aggressive than the RMA allows and to ensure that DEQ honors all exemptions granted by the Legislature. Meanwhile, OBI is also working on a path to finding that needed extra time.

OBI Participating in ‘Corporate Practice of Medicine’ Workgroup

A workgroup focused on medical group ownership and related issues will hold its fourth meeting June 24. The meeting will address ownership disclosure and accountability. The workgroup follows the failure of a bill introduced in the 2024 session by Rep. Ben Bowman, D-Tigard. HB 4130 would have changed rules governing the ownership of medical practices and the use of noncompetition agreements. The complex bill was ill-suited to this year’s short legislative session and did not pass. However, Rep. Bowman has been working with stakeholders to prepare a revised bill for the 2025 session. OBI is participating in that effort and met with Rep. Bowman recently to discuss non-compete and non-disclosure agreements.

Sustainable Health Care Growth Target Rules Near Completion

The rulemaking process for the creation of a Sustainable Health Care Growth Target (CGT) is nearing its conclusion. Complete draft rules were released during the May 15 meeting of the CGT rules advisory committee. A rules hearing will take place June 18, and the permanent rules will be filed with the secretary of state in July.

The Legislature mandated the creation of a CGT in 2019 with the passage of SB 889, which directed the Oregon Health Authority to work with stakeholders to create a health care growth target ensuring that costs did not outpace wages or the state’s economy. The target would apply to insurance companies, hospitals and health care providers.

The rules advisory committee for the program has met over the last several months. In May, OBI submitted comments reiterating the need for a penalty cap and raising questions about the program’s annual public hearing, in particular whether the OHA has the statutory authority to compel entities to appear.

The OHA presented a cost growth trends report to the Oregon Health Policy Board earlier this month. The 96-page document includes data on spending trends as well as cost growth trends for both payers and providers.

Organized retail crime – the large-scale theft of merchandise with the intent to resell it – remains a key problem for many retailers in Oregon and throughout the nation. Not only does such theft contribute to economic loss for businesses (which drives up the cost for consumers), but it compromises the safety of employees and shoppers.

The Oregon Criminal Justice Commission is collecting applications for an anti-theft grant program established by OBI-backed legislation in 2023. The Organized Retail Theft Grant Program will distribute a total of $5 million to local law enforcement agencies, the Oregon State Police and community-based organizations to cover costs associated with addressing and prosecuting organized retail theft.

The program was created by Senate Bill 900, one of three bills introduced in 2023 at the urging of the Oregon Retail Crime Task Force. OBI played a key role in establishing the task force and advocated zealously for the passage of its 2023 anti-theft package.

One-time money distributed through the Organized Retail Theft Grant Program will prioritize proposals that preserve the safety of retail employees and the public, target fencing networks, and identify people or groups likely to commit organized retail theft. Also prioritized will be proposals designed to have a regional or statewide impact.

In addition to passing SB 900, the 2023 Legislature provided funding for personnel within the Department of Justice focused on organized retail crime and changed state criminal code to ease the prosecution of those engaged in retail theft.

Entities eligible to apply for money through the Organized Retail Theft Grant Program must do so on or before July 1.

In 2023 and 2024, the Oregon Legislature made substantial changes to the Oregon Family Leave Act and Paid Leave Oregon. The changes, supported by OBI, were intended to reduce redundancies between the two leave programs and simplify compliance for employers and employees.

Attorney Stacie Damazo of Barran Liebman LLP joined OBI on June 4 to discuss these changes and what they mean for employees. Go here to watch a recording of the webinar.

OBI memberChocolat-ehas been namedone of 50 America’s Retail Championsby theNational Retail Federation, the Washington, D.C.-based organization that advocates for the nation’s 4.6 million retail establishments. The America’s Retail Champion program, “celebrates small retailers who are exceptional advocates for retail and the communities they serve,” according to the NRF.

Sandy-based Chocolat-e was cofounded by French-born Jeanyves Verdu, who couldn’t find chocolate he liked after moving to Oregon in 2018. He assembled a group of investors and foodand community experts to solve the problem, and Chocolat-e was born in 2019. The company’s innovative model presents chocolate as a tasting experience. Its best-selling product, theDiscovery Box, contains six single chocolate origins, each sourced from one cocoa farm. The chocolates are meant to be savored slowly and compared.

Jeanyves, cofounder Norm Rice and the rest of the 2024 America’s Retail Champions will be recognized July 25 at the NRF’sRetail Advocates Summitin Washington, D.C.

OBI is the Oregon affiliate of the National Retail Federation.

Go here to read OBI’s profile of Chocolat-e.

Food Processing Jobs: In 2023, Oregon food manufacturers hit a high of 1,017 business units across the state, up 14% from before the pandemic. However, these firms are making products with fewer workers, possibly due to greater automation. Those workers who remain are likely much better paid, in part to compensate for the high rate of inflation in recent years (Portland Business Journal).

Transportation Package: As lawmakers prepare to craft a major transportation package in next year’s legislative session, numerous organizations and local officials are jockeying for a seat at the table. County and city leaders say they don’t have enough money for basic street maintenance. The state transportation department says it needs an annual $1.8 billion boost to meet Oregon’s needs. And environmental advocates, labor unions and business groups all want input on the package (The Oregonian).

Starbucks Labor Ruling: The U.S. Supreme Court on June 13 made it harder for the federal government to win court orders when it suspects a company of interfering in unionization campaigns in a case that stemmed from a labor dispute with Starbucks. The justices tightened the standards for when a federal court should issue an order to protect the jobs of workers during a union organizing campaign (Associated Press).

Semiconductor Grants: Oregon finalized a second round of funding for the semiconductor industry June 12, awarding $36.2 million in grants and loans to finance expansion by three manufacturers. The state also opened applications for an additional $10 million in funding. All the money comes from a $240 million package the Legislature approved last year (The Oregonian).

Timber Agreement: What has looked for months like an epic looming battle over Oregon’s forests has been called off under a new deal reached by environmental groups and logging industry players (Oregon Public Broadcasting).

Mass Timber: The Oregonian takes a look at the evolution of Oregon’s mass timber industry.

Initiative Costs: The Portland City Council passed a resolution June 12 that requires the city to conduct an analysis of the economic impacts of any initiative that makes the ballot (Willamette Week).

Intel Projects: Intel appears to be rethinking its timetable for a huge, $25 billion factory in Israel the chipmaker announced less than a year ago (The Oregonian). Meanwhile, the company has turned again to a big investment firm to help finance its ambitious semiconductor manufacturing facility, or fab, buildout. Under a deal announced June 4, Apollo Global Management will provide $11 billion and get a 49% stake in the chipmaker’s Fab 34 in Ireland (Portland Business Journal).

Amazon Fuel Cells: Amazon has quietly withdrawn its regulatory application to use natural gas-powered fuel cells to provide electricity for its data centers in eastern Oregon (The Oregonian).

Vigor Ships: After finishing its prototype U.S. Army landing craft, local shipbuilder Vigor started on the vessel’s initial production as part of a $1 billion contract. Vigor, which is based in Portland but was acquired by private equity firm Titan in 2023, opened its Vancouver operation in 2019 (The Columbian).

Lithia Layoffs: Medford-based Lithia Motors is doing what it calls a “very targeted” workforce reduction. The auto dealership group hasn’t revealed how many people will lose their jobs but said it aims to put $150 million in annual personnel savings in place by the end of this quarter. Overall, the company is seeking savings of $250 million (Portland Business Journal).

Goldschmidt Dies: Disgraced former governor and Portland Mayor Neil Goldschmidt has died (Willamette Week).

Portland Test Results: The first data points on how the strike- and storm-disrupted 2023-24 school year may have affected academic progress at Portland Public Schools are in, and they are discouraging (The Oregonian).

Nurse Staffing Law: More than 3,000 nurses at six Providence hospitals across the state are set to go on strike for three days. In an unusual turn of events, they’re striking in part over the rollout of a staffing law that was hailed just two years ago as a major win for the nurses’ union and the first of its kind in the nation (Oregon Public Broadcasting).

Oregon’s three minimum wages will increase July 1. The wage in the Portland metropolitan area will rise to $15.95 per hour. The “standard” wage, which applies to all or parts of 18 counties in northwestern and southwestern Oregon, will jump to $14.70 per hour. And the nonurban wage, which applies in the rest of the state, will jump to $13.70 per hour.

Oregon’s standard minimum wage is adjusted annually based on the increase, if any, in the Consumer Price Index. The Portland metro wage is set $1.25 above the standard wage, and the nonurban wage is set $1 below the standard wage.

Go here for a wage-increase schedule and here for a wage map.

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.