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page_range: [258, 262]
breadcrumb: ["Appendix E: Submissions & Feedback", "24. Oregon Business & Industry — Policy Recommendations Memo"]
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  raw_pages:
    - "../../.extracted/pages/page-0258.txt"
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    - "../../.extracted/pages/page-0261.txt"
    - "../../.extracted/pages/page-0262.txt"
---

# 24. Oregon Business & Industry — Policy Recommendations Memo

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## TL;DR  *(generated · confidence: high)*

Oregon Business & Industry (OBI) submitted policy recommendations to strengthen Oregon's business climate and restore competitiveness. OBI advocates modernizing regulations (targeting 20% reduction by 2030), avoiding policy outliers, reducing business costs through tax reform (especially CAT modernization), establishing a regulatory 'yes' culture, creating a consolidated Department of Commerce, prioritizing economic development, and implementing sustainable budgeting tied to economic growth. They emphasize that deep systemic problems require executive, legislative, and programmatic action.

**Key points** *(each cites a PDF page)*:

- Replace Oregon's Climate Protection Program with a market-based program linked to other states, investing revenue in prioritized GHG reduction policies while avoiding duplicative regulation ([p. 259](https://www.oregon.gov/gov/Documents/Oregon%20Prosperity%20Council%20Report_June%202026.pdf#page=259))
- Redesign Recycling Modernization Act to ensure constitutional compliance, cost transparency to regulated entities and consumers, and alignment with other programs ([p. 259](https://www.oregon.gov/gov/Documents/Oregon%20Prosperity%20Council%20Report_June%202026.pdf#page=259))
- Review and modernize Oregon's unique 50+ year old land use system, with recommendations to Legislature by 2029 session; include attention to industrial, housing, energy needs, appeals process, UGB flexibility, and updated goals ([p. 259](https://www.oregon.gov/gov/Documents/Oregon%20Prosperity%20Council%20Report_June%202026.pdf#page=259))
- Modernize Corporate Activity Tax (CAT) by increasing threshold, indexing to inflation, lowering rate, and increasing deductibility to minimize compounding effects on manufacturers and consumers ([p. 259](https://www.oregon.gov/gov/Documents/Oregon%20Prosperity%20Council%20Report_June%202026.pdf#page=259))
- Set target to reduce regulations in Oregon by 20% by 2030 and create mechanism to ensure continued streamlining ([p. 260](https://www.oregon.gov/gov/Documents/Oregon%20Prosperity%20Council%20Report_June%202026.pdf#page=260))
- Establish legislative committee (modeled on Washington's Joint Administrative Rules Review Committee) to review proposed, sunsetting, and existing agency rules for alignment with legislative intent and outcomes ([p. 260](https://www.oregon.gov/gov/Documents/Oregon%20Prosperity%20Council%20Report_June%202026.pdf#page=260))
- Improve Oregon's occupational licensing requirements (identified as nation's most onerous) to better align with national norms ([p. 261](https://www.oregon.gov/gov/Documents/Oregon%20Prosperity%20Council%20Report_June%202026.pdf#page=261))
- Create Department of Commerce to provide overarching consolidated structure for business development functions currently split across multiple agencies and improve collaboration and consistency ([p. 261](https://www.oregon.gov/gov/Documents/Oregon%20Prosperity%20Council%20Report_June%202026.pdf#page=261))
- Establish statewide energy strategy balancing generation, storage, and transmission with focus on affordability and reliability; develop wildfire resiliency strategy for healthier, productive forests ([p. 262](https://www.oregon.gov/gov/Documents/Oregon%20Prosperity%20Council%20Report_June%202026.pdf#page=262))
- Restore Lottery funds for economic development (currently at 25% from prior 100%), invest in Strategic Investment Fund at competitive levels, and establish permanent tax credits (R&D, capital equipment, job credits) and permanent Enterprise Zone and Opportunity Zone policies ([p. 262](https://www.oregon.gov/gov/Documents/Oregon%20Prosperity%20Council%20Report_June%202026.pdf#page=262))

Amounts: 20% · 25% · 100% · 50+ years · Dates/FTE: April 2, 2026 · 2029 · 2030 · Programs: Climate Protection Program · Recycling Modernization Act · Corporate Activity Tax (CAT) · Universal Health Plan · prevailing wage laws · Health Care Cost Growth Target program · Parties: Oregon Business & Industry · Governor Kotek · Oregon Legislature · Attorney General Rayfield

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> **Source:** PDF [pp. 258-262](https://www.oregon.gov/gov/Documents/Oregon%20Prosperity%20Council%20Report_June%202026.pdf#page=258) · raw: [258](../../.extracted/pages/page-0258.txt) · [259](../../.extracted/pages/page-0259.txt) · [260](../../.extracted/pages/page-0260.txt) · [261](../../.extracted/pages/page-0261.txt) · [262](../../.extracted/pages/page-0262.txt)

Breadcrumb: Appendix E: Submissions & Feedback > 24. Oregon Business & Industry — Policy Recommendations Memo

---
April 2, 2026
To: Members of Governor Kotek’s Prosperity Council
Fr: Oregon Business & Industry
Re: Recommendations
Oregon Business & Industry exists to strengthen Oregon’s economy in order to achieve a healthy,
prosperous and competitive Oregon for the benefit of present and future generations.
This is OBI’s mission statement — words carefully chosen by business leaders from across the state to
reflect a vision of shared success and a state where employers and employees can thrive and flourish.
That “prosperity” has entered a more common political vernacular in Oregon is welcome to OBI. But we
will also be the first to say that words are nothing without action.
We want to help and are grateful for the opportunity to submit these recommendations for action to the
Governor’s Prosperity Council. In compiling them, we used the same principles of pragmatism, boldness
and data-driven analysis that drive the rest of our work. We did not shy away from ideas just because
they are hard, nor did we include things to be gratuitously provocative.
The reality is that the problems with Oregon’s business climate and economy are deep, systemic and
multifaceted. There is no silver bullet to restoring Oregon’s business climate or regaining national
competitiveness. There is no cure that will reverse trends and outcomes overnight. But there is a mix of
things – some small, some large; some quick, some long-term; some executive, some legislative – that
must be done. The work before the governor, her executive branch policymakers and legislators is
complicated and important. It is also timely. Every month, session, year or biennium wasted without
taking steps to economic recovery sets us back further, especially in a competitive landscape where
other states are aggressively figuring out how to win.
Our recommendations are organized by core principles we believe the council should consider. Behind
1
each we indicate which of the council’s strategic goals are advanced (B=Business Climate, W=Workforce,
2
T=Tools for Growth). There are many ideas from OBI’s Oregon Competitiveness Agenda not included
here. That does not mean they are less important or less impactful; we simply tried to focus on higher
level issues and pare down the list for submission. We encourage those who have not yet done so to
3
read the Agenda as well as The Oregon Scorecard , which includes myriad data underscoring the urgency
of this work.
1
https://www.oregon.gov/gov/policies/Pages/Prosperity-Council.aspx
2
https://oregonbusinessindustry.com/obi-releases-oregon-competitiveness-agenda/
3
https://oregonbusinessindustry.com/oregonscorecard/
1149 Court Street NE, Salem, OR 97301 | 503.580.1964 | obi@oregonbusinessindustry.com

The bottom line is that unless Oregon strengthens its business climate through a more predictable and
stable regulatory environment, manageable cost structures and balanced legislative and policymaking
approaches, we risk continued distress. Greater prosperity requires a healthy private sector.
Thank you for your service on the council. Please let us know if you have any questions.
Avoid laws and regulations that make Oregon a policy outlier and
harm the state’s competitiveness, whether in establishing new policies or
evaluating and modernizing existing ones.
 Replace Oregon’s unique Climate Protection Program with a market-based program that allows for
legislative oversight and linkage with other states, invests related revenue in prioritized state policies
related to GHG reduction (e.g., wildfire mitigation, transportation congestion relief, industrial
equipment upgrades) and avoids duplicative or overlapping regulation of GHGs. [B,W]
 Redesign Oregon’s Recycling Modernization Act to ensure it is constitutional, fair and transparent to
regulated entities and consumers; to align costs with outcomes; and to align systems and costs with
other programs. [B]
 Engage in a thorough review of Oregon’s unique, 50+ year old land use system with
recommendations for modernization due to the Legislature for the 2029 session. Attention should be
paid to industrial, housing and energy needs; improving the appeals process; creating more flexibility
for the addition of land into UGBs or land swaps supported by local communities; and updating goals
to reflect modern realities and needs. [B,T]
 Require summaries of proposed policies or policy revisions (statutes and administrative rules) to
include comparative information about whether the proposal exists in other states, outcomes data if
it does, how Oregon’s proposal aligns with or deviates from such policies and how those deviations
are in the best interest of Oregonians. [B]
 Task agencies with reviewing existing administrative rules to identify Oregon-specific approaches
that result in layered, complex and costly regulatory requirements and then update those for
increased efficacy, efficiency and alignment with national norms and best practices. [B]
 Update Oregon’s unique laws and regulations relating to pay equity and non-disclosure agreements
to align with other states’ approaches. [B,W,T]
 Dissolve the Universal Health Plan Governance Board and reject the effort to establish a unique
single payer program. [B,W]
Make Oregon a more affordable place to live, work and run a business.
(Many of the proposals in support of other principles will help realize
this, but there are specific cost-alleviating measures policymakers can take.)
 Modernize the Corporate Activity Tax (CAT) by increasing the threshold and indexing it to inflation,
lowering the rate to a level like the few other states with gross receipts taxes and increasing
OBI Recommendations to Governor Kotek’s Prosperity Council | Spring 2026 | Page 2 of 5

deductibility to minimize the effects of compounding on consumers and Oregon businesses,
particularly manufacturers. [B]
 Index Oregon’s personal income tax rates to avoid bracket creep. [B,W]
 Reform prevailing wage laws to encourage public-private investment in housing and other essential
development needs. [B,W,T]
 Create regionally appropriate policies that allow for expanded access to affordable child care,
including credits or incentives for employers that participate in cost-sharing programs. [B,W,T]
 Maintain current connections to federal taxable income and reconnect to the provisions from which
it has disconnected, especially small business deduction (section 199A), bonus depreciation (section
168) and qualified small business stocks (section 1202). [B,T]
 Incentivize public-private partnerships for workforce training and development, such as expanded
on the job training and education opportunities and employer workforce training credits or
incentives. [B,W,T]
 Streamline permitting and other regulatory barriers to housing development to ensure
communities can create enough differentiated housing stock at affordable prices. [B,W]
 Eliminate the estate tax. [B]
 Place a moratorium on the enforcement of OHA’s Health Care Cost Growth Target program as well
as policy-setting that increases the cost of health care insurance or delivery. [B,W]
 Preempt local income and payroll taxes to avoid multijurisdictional layering. [B,W]
 Expand Oregon’s state and local tax (SALT) federal cap workaround so that it can be more widely
used and make it permanent. [B,W]
Establish a culture of “yes” rather than “no” and reduce Oregon’s overall
regulatory burden while modernizing rulemaking processes and outcomes.
 Leadership at the top needs to help reset policymaking and enforcement culture to one of “yes”,
where supporting private sector health is a shared goal and operational expertise is respected. [B]
 Set a target of reducing regulations in Oregon by 20% by 2030 and create a mechanism to ensure
streamlining going forward. [B]
 Establish a legislative committee to review proposed, sunsetting and existing agency rules to help
ensure rules align with legislative intent, do not exceed agency authority and meet agreed upon
outcomes and goals (ex: Washington’s Joint Administrative Rules Review Committee). [B]
 Establish sunsets for all administrative rules and programs, requiring a thorough review of the
contemporary need, costs, benefits and outcomes before renewal can be approved. [B]
 Bring Oregon in line with nearly every other state and the federal government by establishing an
arbitrary and capricious or de novo standard for agency action, something Attorney General Rayfield
has used in more than 30 lawsuits filed against the federal government. [B]
 Require a viability analysis for any proposed regulation to ensure that pending requirements are
technologically and economically feasible and commercially available. [B]
 Require more robust fiscal and economic impact analyses, including analyses on likely costs to
consumers and establish accountability measures for times when such analyses are not done. [B]
OBI Recommendations to Governor Kotek’s Prosperity Council | Spring 2026 | Page 3 of 5

 Improve Oregon’s occupational licensing requirements (currently the nation’s most onerous) to
better align with national norms. [B,W]
 Ensure balance of perspective, ideology and expertise to rulemaking so that regulations are driven
by data and evidence, not politics. [B,T]
 Establish more customer service focused operations within agencies to help regulated entities
comply and improve outcomes toward policy goals. (Ex: Department of Revenue’s Office of the
Taxpayer Advocate, Bureau of Labor and Industries’ Employer Assistance program; Defunct Ex:
Oregon OSHA’s previous “safe harbor” support approach.) [B]
 Prevent informal and nonpublic policymaking by agency staff, such as the development of internal
management directives, manuals, interpretations or other guidance that can change program
requirements without public input or sometimes even awareness. [B]
 Complete the alignment of Oregon’s disparate leave laws to reduce administrative burdens for
employers, employees and the state. [B,W]
 Streamline Cleaner Air Oregon (CAO) by establishing a more reasonable scope, creating off ramps for
facilities under certain risk thresholds (ex: Washington), standardizing facility evaluation processes
and limiting data collection requirements to contaminants with EPA-established standards; pause
current CAO Toxic Air Contaminant Review and Update rulemaking to allow for more rigorous
scientific review. [B]
 Repeal agricultural and manufacturing overtime laws, which place artificial constraints on workers’
earning capacity and employers’ ability to meet production demand fluctuations, particularly those
tied to harvesting crops or other seasonally specific demands. [B,W]
 Adjust regulatory approaches to incentivize desirable outcomes by rewarding excellence while
spotlighting needed improvements (i.e., more carrots, not just sticks), such as dynamic inspection
programs. (Prior OR ex: pollution control tax credit, green permitting program.) [B,T]
 Improve permitting for new applications, renewals and modifications through: [B]
− Better inter-agency coordination, including between local and state jurisdictions;
− Consistent, public and reasonable timelines for agency action, with fee refunds to applicants if
agency deadlines are missed;
− Ending moving-target permitting, where goalposts change during a permitting process;
− Publicly posted assessments measuring agency performance and progress toward measurable
outcomes; and,
− An external audit of and improvement recommendations for underperforming permitting
programs or those with significant permit backlogs.
Prioritize business and economic development through competitive
retention, recruitment and long-term planning efforts in critical areas.
 Create a Department of Commerce to provide an overarching, consolidated structure for related
functions currently split across multiple agencies; to oversee business support, development and
related services; and to streamline and improve collaboration, dissemination and consistency of
available information. [B,W,T]
OBI Recommendations to Governor Kotek’s Prosperity Council | Spring 2026 | Page 4 of 5

 Establish, fund and routinely refresh a statewide economic development strategy—with a plan for
execution—that leverages historical and traded sector strengths while also building a future-focused
economy. [B,W,T]
 Enhance business support functions focused on the retention and growth of existing Oregon
companies. [B,W,T]
 Establish a statewide energy strategy that balances the state’s needs for energy generation, storage
and transmission with a focus on affordability and reliability. [B,W,T]
 Working with industry experts and stakeholders, further develop and strengthen the statewide
strategy for wildfire resiliency that includes a focus on creating healthier, productive and more
resilient forests. [B]
 Ensure the state’s business development agency can focus on this function without the distraction of
myriad programmatic administration efforts. [B,T]
 Restore, even partially, Lottery funds once dedicated to economic development but since redirected
to other programs (down to 25% from 100%). [B,T]
 Invest in the Strategic Investment Fund at competitive levels. [B,W,T]
 Establish and make permanent commonly used tax credits and investment opportunities to help
drive economic activity, ultimately resulting in economic ROI. (Ex: permanent and expanded R&D tax
credit, capital equipment credits or exemptions, broadly available and easy to use job tax credit that
encourages retention and growth.) [B,W,T]
 Make Enterprise Zone policy permanent and ensure Oregon’s Opportunity Zones are truly statewide
so that communities across the state can benefit from them. [B,W,T]
Ensure a sustainable state budget focused on providing Oregonians with
outcomes commensurate with the investments made by state government.
 Engage in holistic tax reform that analyzes impacts of various taxes and structures on economic
growth and private sector job creation, affordability, fiscal sustainability and the relationship
between local and state tax policy. [B,W,T]
 Connect allowable state budget growth to an economic growth measurement, such as GDP. [B,W]
 Use one-time money only for one-time programs. [B,W]
 Avoid expanding one-off revenue schemes that increase Other Fund revenue for the purpose of
offloading General Fund obligations. [B,W]
 Transition from current service level assumptions to zero-based budgeting to ensure proper analysis
of needs, growth and outcomes. [B,W]
 Working with national experts, establish actionable K-12 education outcome metrics and goals, then
hold the department and districts accountable for those outcomes. [B,W]
 Consolidate and strengthen workforce development through a coordinated approach that builds
upon successful regional efforts but contains focused state leadership rather than just a haphazard
distribution of funding. [B,W]
 Require 10-year (five-biennia) budget forecasting as part of the agency request process, the
governor’s recommended budget proposal and the legislative budget-setting process. While not
binding, this will inform legislators about anticipated needs and cost escalations. [B,W]
OBI Recommendations to Governor Kotek’s Prosperity Council | Spring 2026 | Page 5 of 5

---

Parent: [Appendix E: Submissions & Feedback](./INDEX.md) · PDF: [pp. 258-262](https://www.oregon.gov/gov/Documents/Oregon%20Prosperity%20Council%20Report_June%202026.pdf#page=258)