Oregon policy and rulemaking updates

House development concepts: From Jan. 13-15, the Legislature held informational committee meetings that provided a limited preview of some of the bills that will be introduced during the coming session. All were in draft form and will almost certainly change before the session begins. The House Economic Development, Small Business and Trade Committee heard from the governor’s office about previously announced economic-development proposal It would establish a fast-track permitting process for certain large and complex economic development proposals, adopt elements of permitting transparency similar to those implemented by executive order in Washington, improve Oregon’s Enterprise Zone Program and invest $40 million in industrial land readiness. The Legislature is expected to see a revival of the “FISH and CHIP” Act sponsored by Rep. Daniel Nguyen, D-Lake Oswego, during the 2025 session. It passed the House 46-1 but did not receive a hearing or vote in the Senate. Legislators are also expected to consider proposals to promote industrial symbiosis and Oregon’s “blue economy”.

Senate economic development: In the Senate, OBI testified in front of the Senate Committee on Commerce and General Government along with Senator Janeen Sollman, D-Hillsboro, on her proposed Oregon JOBS (Jobs, Opportunity and Build-ready Sites) Act. This bill, focused on advanced manufacturing (with emphasis on clean energy and biotech/life sciences), would bring much-needed industrial development to the Hillsboro area previously identified during the 2023 CHIPs Act. It also would expand Oregon’s R&D tax credit, create a local option property tax exemption (five years) for new capital equipment and machinery in advanced manufacturing, and implement permitting transparency concepts from Washington state. This proposal is supported by a wide array of businesses, local chambers, associations, local governments, and economic development organizations.

Estate tax changes: On Jan. 13, the Senate Interim Committee on Finance and Revenue held a hearing on potential improvements to Oregon’s estate tax, which is the country’s most burdensome. Only 12 states have estate taxes, and Oregon’s has the lowest threshold, applying to estates valued at $1 million or more. It has long provided an incentive for people to leave the state. While the committee’s interest in the estate tax is encouraging, the proposed solutions actually would make Oregon less competitive. Instead of simply increasing the estate tax’s threshold, legislators seem interested in doing so only if the tax rate itself increases. According to modeling released by the Legislative Revenue Office, each of the proposed solutions would involve substantial increases to estate tax rates. OBI will continue to advocate for increasing the estate tax threshold, better aligning Oregon with the rest of the country.

Oregon’s tax connection: Despite significant chatter about Oregon’s connection to federal tax law (specifically, how taxable income is defined), neither revenue committee has yet indicated what it will propose with respect to disconnecting from all or portions of the pro-growth tax provisions of H.R. 1. The chairs of the House and Senate revenue committees had previously provided OBI with a list of proposals under consideration, which included the removal of several personal income tax deductions and bonus depreciation for equipment, machinery and production property. OBI has explained to legislators that bonus depreciation helps companies of all sizes and does not ultimately deprive the state of revenue. In fact, many legislators have recognized that disconnecting from this provision would increase Oregon’s structural budget deficit in later biennia. OBI expects tax code connection to move back to the forefront as the 2026 session begins on Feb. 2, especially after the next quarterly revenue forecast is released on Feb. 4.

Accrued leave payout: Rep. Travis Nelson, D-Portland, will introduce a bill requiring employers to pay out accrued vacation and PTO. A previous version of the bill also would have required them to pay out sick time, but OBI has heard that such a provision is unlikely to be included in this bill because of concerns from state agencies about high costs. Current law requires these benefits to be paid out only if required by employer policies and past practices. OBI will oppose this costly proposal.

Felonies for employers: A bill expected to be considered during the 2026 session would subject employers to not only civil liability but also potential criminal prosecution for pay disputes, including minor disputes including, for instance, an employee’s decision to cut a meal period short voluntarily. OBI also will oppose this proposal.

Local Control & Safety Act: OBI’s ballot initiative to repeal HB 3115, an outdated law that restricts local governments’ ability to respond to unsanctioned public camping, received a certified ballot title from the attorney general’s office on Jan. 22. The certified title fails to capture even close to all of the suggested improvements submitted by OBI during the comment period. Any party that participated in the comment period now has the opportunity to appeal to the Oregon Supreme Court for further view. However, a court review delays the ability to gather qualification signatures until a ruling is issued. OBI’s first priority remains urging the Legislature to repeal or modify the law during the 2026 legislative session. Sen. Mark Meek, D-Gladstone, introduced a repeal concept as a committee bill earlier this month, and the concept continues to garner interest from members of both parties.

Cleaner Air Oregon rulemaking: On Jan. 12, the Oregon Department of Environmental Quality (DEQ) held a rulemaking advisory committee (RAC) meeting on its proposal to change more than 300 toxicity reference values for chemicals regulated under the Cleaner Air Oregon air toxics program. The meeting was largely focused on providing background information and explaining the process for the RAC. Though additional meetings have not been scheduled, future meetings will include technical discussions of the scientific underpinnings of the proposal. Typically, DEQ defers to authoritative scientific sources of data such as the U.S. Environmental Protection Agency and the California Air Resources Board, but DEQ has cited itself as the authoritative source for 184 of the chemicals being evaluated. In a review of just nine of the chemicals, a national toxicological consulting firm found the scientific basis for the proposal to be weak or inaccurate. OBI expects the next meeting to be scheduled in the spring. OBI and other representatives of the regulated community are serving on the RAC. Visit the rulemaking page here for more information.

CPP listening sessions: Later this year, DEQ will initiate a Climate Protection Program (CPP) rulemaking focused on emissions-intensive, trade-exposed (EITE) manufacturing sectors. The objective is to develop a greenhouse gas intensity benchmark to address the risk of certain facilities leaving the state. These are facilities that compete with similar facilities in other states or countries with no climate regulations or less costly policies like cap-and-trade programs. Although the CPP became effective in 2025, the program does not go into effect for the state’s 37 EITE facilities subject to the rule until 2028. The idea is that these facilities would be evaluated according to energy efficiency rather than being subject to the CPP’s declining cap on emissions. DEQ is planning to hold listening sessions with EITE facilities this spring, begin the rulemaking advisory committee process in June and propose the rule for adoption in 2027. OBI will provide updates as they become available.

Fixed span for I-5 bridge: On Jan. 16, the U.S. Coast Guard announced it will allow the Interstate Bridge Replacement Program (IBRP) to build a replacement I-5 bridge with a fixed span with 116 feet of clearance. The current bridge features a movable span, which brings freeway traffic to a halt periodically. The decision allows the IBRP to finalize and submit the final supplemental environmental impact statement with a fixed-span replacement bridge solution that best balances the needs of all users and modes of transportation with the need to manage costs. This decision also clears the way for the IBRP to finalize the updated cost estimate. OBI submitted a letter earlier this month to the Coast Guard in support of a design that would not include a movable span.

Health care rules: OBI filed comments on Jan. 13 that urge reconsideration of significant proposed increases to the Oregon Health Authority’s Health Care Market Oversight Program fee structure. Under the current draft rules, fee increases for transaction reviews would expand compliance costs dramatically, with existing fees rising by 250% to 1,400%. Additionally, the agency is introducing new fees and civil penalties for failure to comply with program demands. OBI opposed these changes, raising concerns that such added financial burdens and vague penalty language could disadvantage health care providers and payers without improving access, affordability or transparency. You can read OBI’s full letter here.

Health care costs: Last week, OBI convened a group of business leaders to meet with Rep. Rob Nosse, D-Portland, to discuss rising health care costs and how those pressures affect business decisions and the ability of companies to grow and expand. Rep. Nosse chairs the House Health Care Committee and is a leading voice on health care policy in the Legislature. Employers shared the steps they take to shield employees from rising costs, as well as concerns about increasing administrative and reporting burdens placed on businesses by state agencies. OBI plans to hold additional small-group conversations throughout the year so policymakers can hear directly from business owners as they develop public policy.

Health affordability committee: The Oregon Health Authority’s Affordability Committee seeks a member with experience as a health care purchaser, defined as “employers, business coalitions, labor organizations, consumer groups and government agencies that arrange or negotiate health coverage on behalf of a group of people.” The application deadline is Friday, Feb. 6. Learn more here.

Transportation: The headline issue remains the fallout of the successful effort to refer HB 3991, the transportation package passed in a 2025 special session. Following the effort’s success, the governor announced her desire to repeal the bill during the 2026 legislative session, attempting to avoid a November vote entirely. As reported by the Oregon Journalism Project, however, a 1935 attorney general opinion raised questions about the feasibility of such a repeal. The Office of Legislative Counsel subsequently reversed guidance, concluding that the Legislature can’t repeal a measure and deny citizens the vote they requested. In response, legislative leaders have announced their intent to move the vote from the November 2026 general election to the May 2026 primary.

Prosperity Roadmap progress: Gov. Kotek has named former Senate Republican leader Tim Knopp as the state chief prosperity officer, a position included in her Oregon Prosperity Roadmap announced Dec. 2. Another component of the roadmap, the Oregon Prosperity Council, met for the first time on Jan. 22. Its work is set to be finished by June 30.