2015 LEGISLATIVE AGENDA

Shaping Oregon’s PrioritiesOREGON BUSINESS ASSOCIATION

2015 AGENDA MESSAGE FROM THE PRESIDENTAh, the sights and sounds of January in an odd year with the convening of our citizen Legislature. There’s nothing better than a doctor from Medford and an apple farmer from The Dalles hashing out Oregon’s public finance system. Winston Churchill had it right: “Democracy is the worst form of government, except for all those other forms that have been tried from time to time.”

As we head into 2015, Oregon is truly on the comeback trail. We look forward to working with our elected leaders, partners, and members to keep this momentum going for our five priorities (and specific agenda that accompanies them):

1. Build the Middle Class2. Restore Rural Jobs3. Build and Finance Infrastructure4. Invest Wisely in Education5. Balanced Voice

This effort is our vision at work – to “build a sustainable Oregon economy that serves the common good.” Now, let’s roll up our sleeves and get to work making our vision a reality.

Sincerely,

Ryan DeckertPresident, Oregon Business Association

Ryan DeckertPresident

ryan@oba-online.org

D.J. VogtVP, Government Affairs

djv@oba-online.org

Joel FischerSenior Policy Analystjoel@oba-online.org

OBA STAFF

Gina Williams, Public Affairs Director, gina@oba-online.orgPatti Winter, Director of Operations, patti@oba-online.org

Oregon Business Association200 SW Market Street, Suite L100, Portland, OR 97201

503-641-0990 • oba@oba-online.org • www.oba-online.org

OBA’s legislative agenda is designed to complement OBA’s Strategic Plan and fulfill OBA’s core mission of “working to achieve balanced policy solutions to strengthen quality of life and the state’s long-term economic competitiveness.”

Guided by our strategic imperatives, mission and vision, our policy committees work year-round to help develop agenda priorities, with support from OBA’s Board of Directors.

Oregon employers face a host of issues that can impede job creation and increase the cost of doing business, from insufficient transportation and infrastructure to employee skills gaps and sluggish rural economies. Potential big picture policy items for 2015 that address the concerns of Oregon job creators and will help grow the state’s economy may include:

• Transportation and Infrastructure Package• K-3rd Grade Reading Investment• Food Cluster and Innovation Initiative

1. Sound Budgeting & Resource Management – Fiscal policies and state investments to address building the middle class, jobs creation & business development.

2. Grow the Economy – Tax policy, state investments and policy changes to restore rural jobs and build and finance infrastructure.

3. Invest Wisely in Education – Investments such as K-3rd Grade reading initiative and innovative new workforce training approaches; policy changes to increase instructional hours and extend the Oregon Education Investment Board.

4. Balanced Voice – Courts Funding

OBA 2015 LEGISLATIVE AGENDA:SHAPING OREGON’S PRIORITIES

2

OBA POLICY COMMITTEESOur policy committees meet year-round with elected officials, experts and others in preparation for the legislative session. This effort is our vision at work – to “build a sustainable Oregon economy that serves the common good.” We thank our committee chairs and Board of Directors members for what amounts to hundreds of volunteer hours on behalf of OBA and the citizens of Oregon.

Agriculture Task ForceChair: Sam Tannahill, A to Z Winery

Business & FinanceChair: Robert Manicke, Stoel Rives

EducationChair: Kathy Swift, Capital Pacific Bank

Environment & Economic DevelopmentCo-Chairs: Bill Edmonds, NW Natural & Rick Glick, Davis Wright Tremaine

Health PolicyChair: Gayle Evans, Unitus Community Credit Union

Tax Reform Task ForceCo-Chairs: Robert Manicke, Stoel Rives & Gary Reynolds, Perkins & Co.

Transportation & InfrastructureChair: Joan Snyder, Stoel Rives

3

SOUND BUDGETING & RESOURCE MANAGEMENT

Moving the Dial: Tax policies and state investments to address building the middle class, jobs creation & business development

BACKGROUNDOregon continues to struggle with a slow economic recovery, especially in rural areas, and disappearing middle income jobs. In June, state labor data revealed that while the state’s economy is improving, wages are stagnant and the labor force participation rate (adults who are working or looking for work) dropped to 61.1 percent, the lowest in nearly 40 years.

“Oregon private sector workers earned $22.79, on average, in June, just 42 cents more than a year ago. The rise is roughly in line with inflation, leaving workers’ earnings power flat.”

- The Oregonian, July 2014

PROBLEMSAn extension and an adjustment are warranted for two tax policies that help middle and low-income Oregonians and bring money into local economies: Child care tax credits and the Earned Income Tax Credit.

In addition, the state’s Research & Development (R&D) tax credit should be expanded to meet needs of Oregon’s traded sector industries that are a critical part of Oregon’s economic engine.

SOLUTIONSTax policyChild care tax credits: The Child and Dependent Care, Working Family Child Care and Employer Provided Dependent Care tax credits are set to expire at the end of 2015. OBA supports extending the child care tax credits another six years, at a minimum.

4

ISOUND BUDGETING & RESOURCE M

ANAGEMENT

Earned Income Tax Credit (EITC): Oregon should increase the state EITC to 10% of federal from the current 8% to aid working families and keep them from falling out of the lower middle class.

R&D tax credit: OBA supports an expansion of the R&D tax credit limit from $1 million to $2 million per taxpayer. This would expand Oregon’s competitiveness for advanced manufacturing, clean and high technology.

State InvestmentsEmployment Related Day Care (ERDC): OBA believes that Oregon should restore ERDC to serve all eligible families who request the subsidy, as it did before cuts in 2009. Oregon should also expand eligibility to 250% of the Federal Poverty Level, which more accurately reflects a family’s ability to afford child care costs.

In addition, Oregon should allow ERDC-eligible clients to use their child care voucher to cover hours used for participation in coursework that leads to a certificate, degree, or skills attainment at an Oregon-based institution of higher education.

Brownfields: OBA supports recapitalizing the Brownfields Redevelopment Fund, administered by Business Oregon, to $50 million, funded by Lottery bonds.

Policy ChangeMinimum Wage: OBA’s Business & Finance committee evaluated Oregon’s minimum wage (currently the second highest in the nation after Washington State). We believe a modest increase will be part of the overall discussion in Salem as part of a broad-based effort in support of policies such as the Earned Income Tax Credit described above, designed to boost incomes for lower-middle income families across the state.

5

GROW THE ECONOMY

IIGROW

THE ECONOMY

Building Steam: State investments and policy changes to help restore rural jobs

BACKGROUNDThroughout the summer of 2014, OBA participated with several partners on a statewide series of economic forums held across the state to learn more about what rural communities need to build their economies. (See the overview documents for each forum here: www.oregon4biz.com/dev/www/BOR/Economic-Forums/)

In addition to the regional forums, we’re also proposing several policies below that will positively impact Oregon’s rural areas, from food innovation to forest collaboratives.

“From 2007 to 2012, Oregon’s total employment declined 5.3 percent. During that same period of time, Oregon’s manufacturing sector shed 15.8 percent of its jobs. In contrast, Oregon’s food manufacturing employment managed to grow 7.8 percent from 2007 to 2012, bucking the trend of large employment losses experienced by the rest of the manufacturing sector during the recession.”

- Oregon Employment Department

6

PROBLEMSHigh unemployment, high poverty rates and fewer educational opportunities continue to plague Oregon’s rural areas that are not recovering at the same rate as more urban areas. OBA believes efforts to grow jobs, improve educational opportunities and build infrastructure are key to reversing trends of low business investment, poverty, outmigration and joblessness in these areas.

SOLUTIONS

Tax policyBiomass tax credit: OBA supports a concept to improve the effectiveness of the Biomass Producer or Collector Tax Credit and pilot a production-based tax credit incentive for bioenergy projects.

State investmentsFood Innovation Initiative: OBA, along with the Oregon Business Council and the Northwest Food Processors Association, has convened the “Oregon Food and Beverage Leadership Council” with the goal of creating food and beverage industry policies that will: a) accelerate innovation, b) grow and attract top talent, c) grow and retain existing businesses, d) create and manage a “Certified Oregon” label, and e) coordinate export opportunities. The group is working with the Governor’s office and legislators to create a workable model to achieve these goals.

7

Forest Collaboratives: OBA supports harvesting timber on federal lands in sustainable ways that boost rural economies and lead to healthier forests. OBA supports increased state funding for forest collaboratives to restore overstocked, unhealthy and fire-prone forests to historic conditions and create rural jobs. Forest collaboratives are the most effective way to put loggers back to work, support wood products businesses, and protect natural resources for the safety and well-being of rural and urban communities.

Western Juniper Utilization Project: OBA supports the Western Juniper Alliance to help protect grazing land, conserve water supply, manage the spread of disruptive plants, protect threatened species, create jobs in wood products industries, and serve as a resource for biomass energy.

Policy changeClean Fuels Program: Approximately one-third of Oregon’s greenhouse gas emissions come from transportation. OBA supports the Clean Fuels program which will reduce Oregon’s transportation-related carbon emissions by ten percent in ten years by lowering the carbon intensity of fuels used in the state. OBA believes the following considerations should be addressed for an acceptable final program: quality standards for biodiesel, alternative options if fuel supplies do not materialize, and cost containment mechanisms. The Clean Fuels Program can also open the door to economic development opportunities for Oregon’s renewable fuels industry.

Water storage and delivery: OBA supports innovative solutions to address increasing competition for scarce water resources that balance the needs of irrigated agriculture, municipal and industrial demand and sustainable fisheries, among others. One such approach we support involves infrastructure investments needed to support summer withdrawals of Columbia River water that are replaced with bucket for bucket mitigation either by investment in efficiency, tributary flow enhancement, or new storage. OBA will stay at the table to balance growth of Oregon’s economy, while protecting the state’s natural resources.

8

Agritourism: Agritourism is a growing industry in Oregon. The biggest barrier for operating an agritourism business is the increased cost of overhead, including insurance, permits and staffing. Problems also arise when bringing tourists on to working farms that can have inherent dangers. OBA supports updating Oregon liability statutes to protect farmers that operate an agritourism business.

Industrial Land: Land use laws are an important mechanism in Oregon for preserving natural landscapes and farmland as well as ensuring a future supply of land for industrial, commercial and residential users. OBA will engage in land use discussions as they occur. OBA supports creating a loan fund for regionally significant industrial sites. OBA also supports funding to assess the availability of industrial land in Oregon.

On the Move: Tax policy, state investments and policy changes to build and finance transportation & infrastructure

BACKGROUND• Improvements in fuel economy, while good for the economy and for

the environment, have reduced the effectiveness of the per-gallon fuel tax used to raise revenues for highways. Vehicles have been driven more cumulative miles, adding to demand on operations, maintenance and capacity, while fuel economy has reduced the amount of revenue contributed by each mile traveled. The current $0.30 per gallon fuel tax is not indexed to inflation, and has not been adjusted since January 2011.

• The ongoing maintenance needs for the state’s roads are estimated to be well over $300M per year. Given the needs of the state’s transpor-tation infrastructure, and its insufficient funding source, changes are needed.

• Economic development in Oregon requires that we make signifi-cant investment in non-highway, multi-modal transportation in-frastructure as well, including air, marine, rail, road, bicycle, pedes-trian and public transportation. OBA has and continues to support ConnectOregon, which invests the proceeds of lottery-backed bonds in grants and loans to non-highway transportation projects that pro-mote economic development in Oregon.

9

II GROW THE ECONOMY continued...

SOLUTIONSTax policyHighway maintenance, preservation and modernization:The ongoing maintenance needs for the state’s roads are estimated to be well over $300 million per year. In addition, numer-ous highway enhance-ments are sorely needed across the state; this need is estimated at $130 mil-lion per year. Given the needs of the state’s trans-portation infrastructure, and its insufficient fund-ing source, OBA proposes the following:

Increase the fuel tax and index it to [Oregon CPI or another appropriate index]. In addition, the state should increase vehicle registration fees percent to raise the appropriate amount of revenue.

State investmentsOBA proposes that the legislature:

Pass a significant ConnectOregon VI, with funding in excess of $50 million for the 2015-17 biennium. Funds would be used for grants and loans to support capital projects that involve one or more of the following modes of transportation: air, marine, freight rail, passenger rail, public transit, bicycle and pedestrian.

10

Policy changeRoad user fees: The legislature should direct the Road User Fee Task Force to develop an implementation phase-in strategy for transitioning the fuel tax to a Road User Charge with the goal of developing the means to replace the fuel tax and supplement registration fee funding in the near future.

11

12

INVEST WISELY IN EDUCATION

IIIINVEST W

ISELY IN EDUCATION

Education Matters: State investments and policy changes to fund education and expand opportunities

BACKGROUNDFrom education redesign to the 40-40-20 education achievement goal, OBA has a long history of supporting education funding and is committed to reforms and policies that will benefit all of Oregon’s students and enrich our state by closing the achievement gap, creating more opportunities for Oregon students, and ensuring an educated workforce.

PROBLEMSInformation from the Oregon State Department of Education reveals some troubling facts about Oregon students:

• In 2011-12, nearly 28 percent of Oregon 3rd graders did not demonstrate proficiency in reading. Of under-served students, the percentage of 3rd graders who were not reading proficiently was 37 percent.

• In 2011-12, only 21 percent of English Language Learners were reading at grade level in 5th grade.

“ Third grade students who are not reading at grade level are four times less likely to earn a high school diploma by age 19, and for students living in poverty, failing to meet this crucial benchmark makes them 13 times less likely to graduate.”

– American Educational Research Association study, 2011

An educated workforce is essential to a stable economic future. Unfortunately, Oregon’s high school graduation rate is the second worst in the nation, according to the U.S. Department of Education. In addition, state education funding has been declining.

SOLUTIONS

State investmentsK-3rd grade reading initiative: OBA supports the Pre K - 3rd grade reading initiative that will ensure 95% of students in Oregon are reading at grade level by the 3rd grade. A varied approach that includes full day kindergarten, a research based intervention program, and wrap around services will be an essential part of meeting this goal.

13

Full day kindergarten: Full day kindergarten helps close the achievement gap for English language learners, low income students and minority students. Research shows that investing in full day kindergarten reduces the number of students in need of expensive remediation in later years. Full day kindergarten also reduces delinquency, drug and alcohol abuse and lowers crime rates.

Workforce training: OBA supports funding workforce training programs such as: summer youth programs, internships, apprenticeships, incumbent worker training and on-the-job training.

Teacher quality: Revamped and revitalized quality educator programs will give schools the tools their teachers need and will result in increased achievement for our kids. OBA supports continuing investments in educator effectiveness through the Network for Quality Teaching & Learning that support better systems to recruit, train, develop, retain, and reward excellent teachers and school leaders. Oregon must ensure that every student has access to great teachers and every school has a great leader. These investments are critical to closing the achievement and opportunity gaps we face in our state. Educators that are supported and effective are essential to getting our 3rd graders reading at grade level, increasing high school graduation rates and, ultimately, achieving 40/40/20.

Early Childhood Education: OBA supports building on Oregon’s investments in high quality early learning to serve more at-risk children age 0-5. OBA also supports better alignment of early childhood and K-12 assessment, curriculum, and instruction to more swiftly close achievement gaps and create a more seamless system for kids and families.

Accelerated learning: OBA supports increasing opportunities for Oregon students to earn dual credits and learn at an accelerated pace.

Connecting education to careers: The Oregon Business Association is working with stakeholders to develop a new vision for delivery that breaks the walls between schools and “out of school” providers; K-12, community college and universities; education and employers; and above all academic and applied learning. This vision includes increased investments in Career Technical Education (CTE) and Science, Technology, Engineering and Math (STEM) as well as the Engineering Technology Industry Council (ETIC) restructuring efforts that will transition it to the Oregon Talent Council (OTC) and increase reach to additional industry sectors. The result will be clearer pathways for students connecting their education with the knowledge, skills and experiences they’ll need for college and careers.

14

Policy changeInstructional hours: OBA supports working with education coalition partners to ensure all of Oregon’s students have access to Oregon’s minimum standard of instructional and credit hours. In addition, supports advocating for instructional hours and school year length standards that are equivalent to the highest performing nations in the world.

15

BALANCED VOICE

JUDICIAL BRANCH FUNDINGOBA believes a vital court system is essential to a well-functioning economy. We will work to ensure the judicial branch is adequately funded. OBA supports full funding of courts in the 2015-17 budget.

PUBLIC SAFETY REFORMOBA is a longtime member of the Oregon Coalition for Safety and Savings (OCSS), a broad-based group that supports smart public safety reform. Recent prison forecasts have shown that House Bill 3194 has been largely effective in producing this desired result, for now. The state must continue to invest in counties to develop programs that prevent crime and unnecessary use of expensive prison space. OBA supports an investment of $66 million for the 2015-17 biennium to allocate to counties for HB 3194 implementation.

IVBALANCED VOICE

16

17

*Mark A. Long, Board ChairManaging PartnerSCHWABE, WILLIAMSON & WYATT, P.C.

Erik AmosDirector, Corporate Tax DivisionCOLUMBIA SPORTSWEAR

Gary BauerDirector of Government and Community AffairsNW NATURAL

*Ruth BeyerSenior Vice President & General CounselPRECISION CASTPARTS

*Scott BoltonVice President Community & Government RelationsPACIFIC POWER

Craig BoretzVice President of Corporate DevelopmentCON-WAY, INC.

*Julia Brim-EdwardsSr. Director, Global Strategy & Operations, Government & Public AffairsNIKE

Rich BrownSenior Vice President-Market DevelopmentBANK OF AMERICA

Matt ChapmanPresident & Executive DirectorNORTHWEST EVALUATION ASSOCIATION (NWEA)

Barbara ChristensenChief Sales & Marketing OfficerPROVIDENCE HEALTH & SERVICES

Andrew ColasPresident & COOCOLAS CONSTRUCTION

Wendy ColliePresident & CEONEW SEASONS MARKET

Justin DelaneyVice President, Corporate Legal & Public AffairsTHE STANDARD

Chris DenzinVice President & General Manager Northern Oregon and Southern WashingtonCENTURYLINK

Mark EdlenCEOGERDING EDLEN

*Jill EilandCorporate Affairs ManagerINTEL CORPORATION

Dan FieldDir. of Community Benefit & External AffairsKAISER PERMANENTE

Brian GardPresidentGARD COMMUNICATIONS

George GrangerPresident – Oregon,AT&T

David HardyVice President, SalesVESTAS

Alan HickenbottomGeneral Manager, Tanner Creek DivisionCHRISTENSON ELECTRIC

Elizabeth LargeExecutive Vice President, General Counsel &Corporate SecretaryKNOWLEDGE UNIVERSE

Hiroshi MoriharaPresidentHM3 ENERGY, INC.

Darcy NorvillePartner, Managing Board MemberTONKON TORP

Chad PaulsonVice President, General Counsel and SecretaryBLOUNT INTERNATIONAL, INC.

*Gary W. Reynolds, Immediate Past Board ChairPresent Board TreasurerPresidentPERKINS & COMPANY, P.C.

Robin RichardsonSenior Vice PresidentMODA HEALTH

Dave RobertsonVice President, Public PolicyPGE

Mel SearsP.E., PMP, Principal Area Manager & Vice PresidentPARSONS BRINCKERHOFF

Connie SeeleyChief of Staff, Office of the PresidentOHSU

*Pat Smith, Board Vice ChairPresident/CEOUNITUS COMMUNITY CREDIT UNION

Bill SmithPresidentWILLIAM SMITH PROPERTIES, INC.

*Sam TannahillFounder and Director of Viticulture & WinemakingA TO Z WINEWORKS

Chip TerhuneVice President of Government AffairsCAMBIA HEALTH SOLUTIONS

Wally Van ValkenburgPortland Office Managing PartnerSTOEL RIVES

Don WashburnPRIVATE INVESTOR

Sean WatersDirector of Compliance and Regulatory AffairsDAIMLER TRUCKS NORTH AMERICA

Phil WelkerExecutive DirectorPECI

*Ken WightmanChief Executive OfficerDAVID EVANS ENTERPRISES, INC.

Ryan DeckertPresidentOREGON BUSINESS ASSOCIATION

*Executive Committee members

OBA BOARD OF DIRECTORS

ABOUT OBA

Oregon Business Association is the state’s most effective advocate for the long-term enhancement of Oregon’s business climate.

Formed by a group of Oregon business leaders, OBA provides bipartisan, statewide business leadership that strives to ensure Oregon’s continued economic competitiveness. Today, more than 300 businesses, from Portland to Boardman, from homegrown to Fortune 500, have joined to support OBA’s commitment to a healthy economy for all Oregonians.

Oregon Business Association200 SW Market Street, Suite L100, Portland, OR 97201

503-641-0990 • oba@oba-online.org • www.oba-online.org