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IDAHO

 

RANGELAND IMPROVEMENT ACT: H468 would allow the Idaho State Department of Agriculture to assist producers in seeking resources and funding to carry out grazing improvement projects across the state on private, state and federal land. These projects could consist of rangeland improvement and maintenance through the development of water sources or additional fencing in strategic locations. In addition, funding could be used for the control of predator and depredating animals; the control, management, or extermination of noxious weeds or invasive species; and any other management tools that further the general welfare of livestock grazing. The legislation would weave together two existing mechanisms together. The grazing board central committees already exist, and this legislation would beef up their ability to assess and review grazing projects. Additionally, the Idaho State Department of Agriculture has a rangeland monitoring program that would see increased use and effectiveness from this legislation. The program would be able to assist ranchers in securing resources to make those rangeland improvements and then monitor those projects. At the end of the day, these funds and resources will find their way into rural Idaho. Strengthening rural Idaho and our rangeland will assist in the long-term viability of the livestock industry in Idaho.

 

GRIZZLY AND WOLF DEPREDATIONS: H592 created a state level livestock depredation fund for producers that experience losses from wolves and grizzly bears. Currently, the Office of Species and Conservation applies for a federal grant through U.S. Fish and Wildlife Services that has historically provided relief to ranchers for wolf depredations and for non-lethal or conflict prevention. However, the funding that is being 3 provided by this federal grant is continually diminishing and provides no relief for grizzly bear depredations or conflict prevention for grizzly bears. Livestock interactions with predators continue to be significant across rural Idaho. In 2023, there were confirmed depredations in Camas, Custer, Elmore, Gem, Idaho, Lemhi, Valley and Washington counties. If grizzly bears were added to the depredation fund and investigations occurred there would likely be producers affected in north Idaho and eastern Idaho. More importantly, is the fact that these depredations only account for those animals that could be discovered and investigated in a timely manner. There are likely many more that are not investigated because they occur in allotments or pastures that producers do not access each day. However, the evidence of depredations due to a predator is only a fraction of the damage that has likely occurred when predators enter a cattle herd. Ranchers continually confirm that wolves and grizzly bears in livestock herds also contribute to lower pregnancy rates, weight loss and lack of docility in animals. These economic losses are not compensated but realistically occur and are shouldered by the producer. The wolf and grizzly bear depredation fund would be administered by the Idaho State Department of Agriculture (ISDA) with consultation from the Office of Species Conservation and Idaho Fish and Game. ISDA will promulgate rules that provide standards for validated or probable claims of depredated animals alongside the types of conflict prevention methods that could be funded. This will be completed with stakeholders at the table.

 

WOLF DEPREDATION CONTROL BOARD: H612 would add the payment of depredations to the authorizing language of the Wolf Depredation Control Board. Currently, the Wolf Depredation Control Board is solely responsible for the lethal control of wolves within the state of Idaho. H612 would expand their authority to remit payment from the fund to ranchers who suffer losses due to these animals. The governing agencies, specifically the Idaho State Department of Agriculture (ISDA), would have to develop and compile data on the death losses prior to 1995 and the reintroduction of wolves. Using these death losses the board would allow ranchers to submit their previous years’ death losses in a chronic depredation area for payment from the board for those losses. Additionally, this method would remove the need for investigations conducted on animals found to be taken by wolves for depredation payments. ESTRAYS: H712aaS is an interesting piece to discuss. As producers we have come to know and appreciate open range laws in Idaho. Within our policy book, those laws are supported by policy, and it is our responsibility to assist in protecting and preserving that policy. However, we have come to understand that there are bad actors that can ruin it for everyone. Over the past several years we have been looking at fence law as it is antiquated in its fine amounts and speaks to many things that were relevant in the past, but not now. This year a group of industry members looked at the estray statute since we could not seem to get things worked out with the fence code. Open range and certain case law interpreting open range creates the presumption in Idaho that we are a “fence-out” state, where, unless a property owner is in a herd district, it is the duty of landowners to fence livestock out and off of their land. Herd districts are a legislative exception to the “fence-out” rule. With the creation and implementation of proper herd districts those districts remove open range immunity and create a ‘fence in’ situation for livestock owners. It’s safe to say that stray animals can be found in open range and herd districts. Each location has different ramifications and creates a different set of circumstances that operators should be watching. However, H712aaS does create heightened damages for any producers that do not make a reasonable attempt per the notification periods in the legislation to take their animals off the property where those animals may be trespassing or straying. It should be noted that adjacent property owners in certain situations must also maintain a proper and lawful fence before a livestock owner shall be subject to any damages or criminal penalties. Criminal penalties shall only ensue if a livestock owner is shown to be willful and wanton through their actions in not maintaining or removing stray livestock.

 

S1372 – ENHANCEMENTS FOR ISDA: The ISDA received approval for the following enhancements to their Fiscal Year 2025 maintenance budget:

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• funding for 6.00 additional Full Time Personnel at the Department

• funding for a veterinarian in eastern Idaho, dairy inspectors, seed lab personnel

• enhance the Idaho Preferred program

• build a storage facility

• provide international trade support with Japan

• a resilient food systems grant  

• to provide CEC for fruit and vegetable inspectors

• increased spending authority for the Honey Commission

• funding for quagga mussel prevention and eradication

• additional 2% CEC

 

S1372 transferred $5,000,000 from the General Fund to the Invasive Species Fund to be used for quagga mussels. This appropriation also includes a deficiency warrant that reimburses the Department of Agriculture for prior fiscal year costs to survey and control pests on state and private lands authorized under Chapters 19 and 20, Title 22, Idaho Code. This action provides funds from the General Fund to be transferred to the Pest Control Deficiency Warrant Fund in the amount of $627,900.

 

HOW BUDGETS WERE HANDLED IN 2024 SESSION: One of the biggest changes during the 2024 legislative session involved how the Idaho Legislature’s powerful budget committee (JFAC) sets the state budgets. Prior to the session, Rep. Wendy Horman, R-Idaho Falls, and Sen. Scott. Grow, R-Eagle, announced several changes to how the Joint Finance-Appropriations Committee (JFAC) operates. Horman and Grow serve as the co-chairs of the Joint Finance-Appropriations Committee, or JFAC, which sets every element of the state budget. The changes affected everything from how the state budget was broken up and set to how the committee’s daily meetings were conducted. For the first time in recent memory, JFAC broke state agency budgets into two different pieces. For the first piece, a version of last year’s budget – with the one-time spending money and new spending requests taken out but only partial placeholder salary increases for state employees factored in – was put forward as a bare bones budget intended simply to keep the lights on. This was identified in the new process as the maintenance of operations budget, or a maintenance budget. Then, maintenance budgets for more than 100 state agencies and divisions were lumped together in 10 larger maintenance budgets that collectively spent more than $5.1 billion in state general fund spending. For the second piece of the budget, JFAC considered the agencies’ new spending increases, budget line items, some replacement items and other new requests separately in new budget enhancements. The co-chairman believe that the new budget procedures increase transparency and allow JFAC members to really scrutinize and understand the new spending increases. Another change that came in 2024 - how JFAC’s daily public budget hearings were conducted. Instead of the regular three-hour daily meetings, JFAC conducted a roughly 90-minute public budget meeting each day and then broke into smaller, private working groups to actually work on setting the budgets. Working groups regularly met privately during previous legislative sessions, but had to do so on their own time, such as during lunch or in the late afternoons or evenings.

 

HOW DID IDAHO’S BUDGET CHANGES WORK THIS YEAR?: Looking back at the process the general fund spending increase in the fiscal year 2025 budget was 1.7%, down from 12% a year earlier. Numerous legislators from both major parties voiced support for the working groups and setting aside dedicated time for the working groups. But some legislators from both major parties voiced concerns or at least questions about the use and definition of maintenance budgets. There were mixed reviews from legislators in both parties. Some working groups were very productive, and others seemed to struggle with internal personalities in reaching compromise on setting budgets. Remember, Idaho is a balanced budget state. The goal of the budget reduction was to reflect the loss of ARPA funds that were infused into the state’s operation during that time period and to bring the budgets more in line with the revenue generated minus the federal funds.

 

GRAIN BIN TAX EXEMPTION: H751 would clarify that machinery including augers, dryers, or fans used within, or attached to a grain bin, are exempt from sales taxes. In the past taxes have been collected on grain bin structures; but accessories that can be removed and moved to other locations without affecting the structural integrity have not. H751 would clarify the intent of the legislation. Equipment used in the production or storage of agriculture should be exempted from tax under the production exemption outlined in Idaho Code.

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ADMINISTRATIVE RULES: A few pieces of legislation dealt with state agencies and the review process by the legislature and standards for court review. H626 would require courts reviewing administrative rules to look to interpret the meaning and effect of the rule without consideration of previous judicial or agency interpretations. This would mean that if individuals, landowners or businesses were in court because they had been summoned into court for allegedly not following a specific agency rule, the court couldn’t make its ruling or 5 defer to the agency simply based on what the agency has interpreted the law to be. H626 also directs that reviewing courts must rule, where an interpretation is in relative doubt, to limit agency power in favor of individual liberty. Though the “individual liberty” language in the bill doesn’t have a legal definition attached to it, it does emphasize the importance of an agency having to lean toward the individual interpretation over agency power. H626 was a rewrite of a previous bill agriculture had supported (H562) and will likely be supported pending technical considerations with the legislation. H563 makes three changes to the Idaho Administrative Procedure Act, which is vitally important and has been weighed in on heavily by commodity groups and landowners through the years. It narrows the language concerning temporary rules; addresses legislative oversight of material incorporated by reference; and would require each agency to legitimize the reasoning and necessity of each rule chapter more often. On the surface these provisions may sound useful but in practice and application, they could unravel years of work and public meetings where agriculture has won hard-fought battles using experts and scientific data to justify best management practices for producers. Further, it would open the door for political calculations and priorities to reinterpret these rules without consideration of the unintended consequences for farmers and ranchers. One such example is the language added to rules (incorporated by reference) that are directly from the federal government and must be followed by federal law. If a state agency doesn’t adhere to those standards, it opens the agency to slew of lawsuits akin to the many lawsuits filed against the Environmental Protection Agency every year by attorneys working in conjunction with interest groups directly and indirectly trying to hinder production agriculture and working lands from operating. Rejecting incorporated by reference language can also put a producer out of compliance federally while still being in compliance with the state and would place the burden on the producer to be in compliance with federal law without the benefit of the state acting as an intermediary. We have seen time and time again, state agencies working with producers to help them get into compliance before or instead of levying a fine. The alternative is the federal heavy-handed approach that simply fines a producer who may not have been aware they weren’t complying or are making a true effort to get in compliance.

 

608AAS AGRICULTURAL PROTECTION AREAS: For years, agriculture interest groups across the state have been discussing ideas to preserve Idaho’s farmland. This year, the Idaho legislature took the initial step toward achieving this goal. On April 5th, Governor Brad Little signed House Bill 608, the Agricultural Protection Areas legislation. This bill offers landowners an additional option for safeguarding agricultural land in the state. It introduces a new chapter to the Idaho Local Land Use Planning Act, providing legislative authority for county governments to accept applications from willing landowners to establish Agricultural Protection Areas (APAs), beginning January 1, 2025. These APAs, with a duration of 20 years, will be recognized on local land use planning maps and provide protection against eminent domain and nuisance actions. Under this legislation, each county will establish an Agricultural Protection Area Commission comprising 3-5 members involved in the agriculture industry within the county. This Commission will review APA applications and make recommendations to the County Commissioners regarding their acceptance or denial. County Commissioners will have the final say of whether the APA application is approved or denied. House Bill 608 offers a balanced solution, respecting farmers' and ranchers' private property rights while providing a voluntary incentive program. It enables them to preserve their farmland for future generations. While this legislation marks a significant step forward, various agriculture interest groups will continue their efforts to incentivize farmers and ranchers to sustain agricultural production in our state.

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H540 FLOOD DISTRICTS: For many years under the current Idaho statute Flood District commissioners, managers and staff have been uncomfortable with the notion that they are to “control” flooding, or that they can somehow "prevent" flood damage. The reality is Flood Districts have neither the authority nor the capabilities to meet such expectations. A Flood District's actual role is to conduct, participate in, facilitate, and assist projects on and along stream channels and other natural watercourses to:

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• Reduce flood risk;

• Respond to flood events to mitigate or reduce flood damages, and;

• Conduct recovery operations to restore watercourses after flooding subsides.

 

House Bill 540 revises terminology and the Flood Districts’ authority to better describe the actual activities of a Flood District and their management role.

 

S1245: For the past 6 years tort litigation and jury trials centered around pesticide warning labels has created uncertainty about whether U.S. made products will continue to be available for our agricultural industry. Bayer has an estimated $13 Billion in expenses between litigation costs and punitive damage awards. Last year's litigation expenses alone exceeded the company's revenues on U.S. Glyphosate sales. Companies like Bayer who manufacture our pesticide products in the United States cannot afford to continue business if they have to pay out billions of dollars in endless litigation. 50% of all glyphosate used in the U.S. is supplied to us directly by China. If the largest U.S. manufacturer of glyphosate decides that it is too costly to continue to do business in the U.S. because of endless litigation – the agricultural industry will be forced to buy 100% of this widely needed product directly from China. There is a very valid concern that we could not only lose the U.S. manufacturing of glyphosate due to endless litigation, but also the plant in Soda Springs, Idaho that manufactures elemental phosphorus - which is the first step in the production of glyphosate. Soda Springs Idaho is the only place in the entire Western Hemisphere that manufactures elemental phosphorus. The other places that produce elemental phosphorus are China, Kazakhstan, and Vietnam.

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The first attempt at Pesticide Legislation was Senate Bill 1245. S1245 proposed to add language to Idaho's Pesticide and Chemigation Act and Idaho's Consumer Protection Act, clarifying that a "failure to warn” claim cannot be used as grounds for a lawsuit against the manufacturer of a pesticide product because a pesticide label provides sufficient warning. S1245 failed to pass the Senate Chamber with 15 ayes and 19 opposed and 1 absence. The final piece of legislation that was proposed in session S1432 very narrowly addressed failure to warn as it pertains to pesticide labeling. S1432 allowed an individual to go to court if they can prove they were injured as a result of the warning being inadequate. The legislation raised the evidence standard from preponderance of the evidence to the clear and convincing standard. A standard that is currently utilized in Idaho civil cases for fraud claims and punitive damage awards. The legislation would reduce costly and unnecessary future litigation in this very specific scenario while still providing access to legal remedies and the discovery process for individuals that were actually harmed by the product or from bad actors who failed to disclose information to regulators. S1432 would also give our agricultural producers the certainty that they can continue to use U.S. manufactured products instead of depending upon China. While it was a close count, S1432 did not have the votes to pass the Senate Chamber. Stakeholders will continue to work on legislation over the next couple of months and present a new solution to the legislature in 2025.

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LAND BOARD LEGAL COUNSEL: The State Board of Land Commissioners (Land Board) comprises Idaho’s Governor, Secretary of State, Attorney General, Superintendent of Public Instruction and State Controller. The Land Board provides direction to the Department of Lands in managing more than 2.5 million acres of state endowment trust lands in Idaho. The Land Board also oversees the work of the Department of Lands in its regulatory and assistance duties, and in managing Idaho’s public trust lands and the thousands of miles of land beneath Idaho’s navigable waterways. S1292 addresses some past conflicts that have arisen where the Land Board has made a decision, directed the Department of Lands to act, but the Attorney General has said that the decision was unconstitutional and will not act on behalf on behalf of the Land Board. These situations leave the Land Board with no alternative to move forward with legal counsel that is in concert with the Land Board as a whole. S1292 removes the responsibility of the Office of the Attorney General to provide legal representation to the Idaho Department of Lands and allows the department to hire or contract its own legal counsel. They would still be able to contract with the Attorney General if desired.

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IMMIGRATION: Senate Joint Memorial 2 (SJM2) summarizes the current illegal immigration crisis and calls upon Congress and the President of the United States to take immediate action to secure the border, stop unauthorized immigration, and implement immigration reform to address the national labor shortage. The memorial requests effective border security measures that prohibit people from entering the country without lawful authorization and a revised guest worker program that provides a lawful means of year-round work authorization for participants to support the agriculture, construction, hospitality, food processing, manufacturing, and technology industries. There is little dispute that the immigration system is in terrible shape and that a secure border must be supported. We also have critical economic and food security issues that must be protected and improved while we address border security. Agricultural employers have led the way in advocating for federal policy that will responsibly modernize our immigration system to provide border security, while simultaneously providing a guestworker program for both temporary and year-round agriculture. A new guest worker program is needed and must be built to prevent a future of importing food by allowing foreign laborers to produce our food domestically. House Joint Memorial 8 (HJM) highlights the current illegal immigration crisis at the nation’s southern border and emphasizes President Biden’s failure to enforce immigration law. Its main thrust is pointed at the president and the need to secure the border. Unfortunately, it also contains inflammatory and incorrect language suggesting Idaho demands “cheap immigrant labor” and is the cause of human and drug trafficking. The memorial calls upon Congress to impeach President Biden for willfully failing to enforce immigration laws and sanctioning an invasion of the United States. It prioritizes border security before funding the war in Ukraine, including passing the Secure Border Act of 2023. It also does not consider any immigration reform measures until after the president is impeached and the Secure Border Act of 2023 is passed. HJM8 suggests that border security cannot be accomplished while also accomplishing needed guest worker visa reform to meet the needs of year-round agriculture. Those that characterize these wages as “cheap” (starting at $15 and up) must likewise believe Idaho’s minimum wage is in need of increase. HJM 8 also doesn’t account for the probability of immigrant agricultural laborers being the least likely of all to be involved with th

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This review is provided by Association Management Group (Waitley Associates, Batt Associates, LP Associates & Agriculture, and Rooks Associates).  https://www.amgidaho.com/

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OREGON

 

Congressional Races

Congressional District 3.  Three Democrats are vying to replace retiring Oregon Congressman Earl Blumenauer (D), who has held the seat since 1996.  Because this is a very safe Democratic seat, the winner of Tuesday’s Primary will be the winner of the November General Election.  Oregon House Representative (and doctor) Maxine Dexter, Multnomah County Commissioner Susheela Jayapal, and Gresham City Councilor Eddie Morales are competing for this seat.

 

Congressional District 5.  Two Democrats are competing to face incumbent Congresswoman Lori Chavez-DeRemer (R) this fall.  Democrat and Oregon House Representative Janelle Bynum will face perennial Democratic candidate Jamie McLeod-Skinner on Tuesday.  CD 5 is at the very top of seats Republicans are looking to protect and Democrats are looking to flip this fall.  The winner of Tuesday’s Primary will largely determine whether Democrats have a chance of flipping the seat in November.  Chavez-DeRemer flipped this seat from D-to-R in 2022, beating McLeod-Skinner. 

 

Statewide Races

There are only two interesting statewide races to watch Tuesday night.  The first is the race for Oregon Secretary of State, where current Oregon State Treasurer Tobias Reed (D) faces current Oregon State Senator James Manning (D).

 

The second is the race for Oregon State Treasurer, where Oregon State Senator Elizabeth Steiner (D) faces Lake Oswego City Councilor Jeff Gudman (D). 

 

Legislative Races

There are a few interesting Primary races in the Oregon Legislature.

 

In Senate District 1 (Gold Beach), incumbent Republican Senator David Brock Smith faces a challenge from the right from three Republicans, perennial candidate Paul Romero Jr, former Roseburg City Councilor Ashley Hicks, and logger Todd Vaughn.

 

In Senate District 2 (Cave Junction/Roseburg), current Oregon House Representative Christine Goodwin (R) is facing the son of Sen. Art Robinson (the son is Noah Robinson).  Art Robinson is barred from seeking reelection after participating in extended walkouts in 2023.  

 

In Senate District 28 (Klamath Falls), the wife of Senator Dennis Linthicum (R, who is also barred from seeking reelection), Diane Linthicum, is facing Klamath County Commissioner and Chief of Police Dave Henslee.

 

In Senate District 29 (Pendleton), three Republicans are vying for the seat held by retiring State Senator Bill Hansell.  Dr. Dave Drotzmann will face Cattleman Todd Nash and recalled former Morrow County Commissioner Jim Doherty for the nomination.

 

In House District 33 (Portland), environmental trial attorney Peter Grabiel faces health care clinic owner Shannon Isadore Jones and Dr. Brian Duty in the Democratic primary to replace outgoing Representative Maxine Dexter, who is running for Congress.

 

In House District 12 (Eugene), incumbent Charlie Conrad (R) faces a challenge from the right from business owner Darin Harbick.

 

House District 8 (Eugene) is an open seat due to the retirement of Rep. Paul Holvey (D). Legislative staffer Doyle Canning faces educator Lisa Fragala for the nomination.

 

House District 16 (Corvallis) is an open seat with former House Speaker Dan Rayfield (D) running for Oregon Attorney General.  Democrat and Corvallis School Board member Sami Al-Abdrabbuh faces educator Sarah McDonald for the nomination.

 

Finally, notably in House District 51 (Canby), Republican incumbent Representative James Hieb faces a challenge from former Representative and Republican Gubernatorial nominee Christine Drazan as she makes a bid to return to the legislature.

 

Interim Legislative Days

The week after next, we have May Legislative Days and the May Revenue Forecast. Legislators will return to Salem for Taskforce meetings on Tuesday, May 28th, followed by committee meetings Wed-Friday, May 29-31.

 

The Speaker of the House, Julie Fahey, made several changes to House Committee Chairs. We expect additional changes after the November General Election.

 

Here are the changes that were recently announced:

• Agriculture, Land Use, Natural Resources, and Water Committee: Rep Mark Owens (R-Crane) joins Rep Ken Helm (D-Beaverton/Cedar Hills) as bipartisan chairs.

• Climate, Energy, and Environment Committee: Rep John Lively (D-Springfield) replaces Rep Pam Marsh (D-Ashland), who will chair Housing.

• Commerce and Consumer Protection Committee: Rep Nathan Sosa (D-Hillsboro) will chair.

• Economic Development, Small Business, and Trade Committee: Rep Daniel Nguyen (D-Lake Oswego) takes over from Rep Janelle Bynum, who is running for CD-5.

• Emergency Management, General Government, and Veterans Committee: Rep Thuy Tran (D-NE Portland) is replacing Rep Dacia Grayber (D-SW Portland and East Beaverton), who will now chair the Labor and Business Standards Committee (formerly Business and Labor).

• Higher Education Committee: Rep Zach Hudson (D-East Multnomah County) replaces Rep John Lively (D-Springfield), who will now chair Climate, Energy, and Environment Committee.

• Housing and Homelessness: Rep Pam Marsh (D-Ashland) replaces Rep Maxine Dexter, who is running for CD3.

• Labor and Workplace Standards Committee (formerly Business and Labor): Rep Dacia Grayber (D-SW Portland and East Beaverton) replaces retiring Rep Paul Holvey (D-Eugene).

• Rules Committee: Rep Ben Bowman (D-Tigard), the new House Majority Leader, replaces the outgoing House Majority Leader, Rep Julie Fahey (now Speaker Fahey).

• Ways and Means Education Subcommittee: Ricki Ruiz (D-Gresham) replaces Rep Susan McLain (D-Forest Grove), who will Co-Chair the Joint Committee on Transportation and the I-5 Bridge Committee.

 

The other committee chairs and co-chairs remain the same, as do all the Senate committee chairs and co-chairs.  The new House chairs will preside over their committees during the upcoming Legislative Days committee meetings (see below). 

 

Climate Protection Program 2.0

Today, the DEQ held its second Climate Protection Program 2.0 (CPP 2.0) rules advisory committee (RAC) meeting.  The meeting focused on a few potential policy changes from the previously adopted program in late 2021. 

 

First, DEQ is contemplating a policy that would be a major shift by creating new regulatory provisions for emissions intensive, trade exposed (EITE) businesses.  EITEs are most commonly manufacturers that are unable to pass high regulatory costs into the marketplace making them uncompetitive leading to plant closures and increasing production outside of the state (commonly referred to as leakage).  To avoid this economic and emissions leakage, DEQ is considering new policy tools that will reduce compliance costs on manufacturers while still allowing the state to make progress on meeting its greenhouse gas reduction goals.

 

Second, DEQ is considering a rule change that would provide one-time distribution of regulatory compliance instruments to importers of renewable fuels during the initial three years of the program despite the fact that the program was overturned.  This would add additional compliance instruments into the program and conceptually, ease the transition back into a Climate Protection Program. 

 

The third and final RAC meeting is scheduled for June 25th. We do expect more changes before the June RAC meeting.

 

Kotek Staff Transitions

Several senior staff members, including the Chief of Staff, resigned from the Governor's office over the last few months.  This has caused some reshuffling, and we expect more changes in the Governor’s office prior to next session.  

 

Notable May Legislative Day Appointments and Agency Leaders

The Governor announced the appointment of two new agency directors, including for the Oregon Water Enhancement Board (Sara O’Brien) and Oregon Department of Water Resources (Ivan Gall).  In addition, the Governor has appointed two new Environmental Quality Commissioners (EQC) which oversees DEQ.  Karen Moynahan, a retired environmental attorney, and Matt Donegan, a management and investor consultant, will replace Chair Kathleen George and Vice-Chair Sam Baraso. All these nominees need Senate confirmation during May Legislative Days. 

 

Separately, the Oregon Fish and Wildlife Commission has appointed Debbie Colbert, a biologist, oceanographer and the current deputy director of the agency, to its top leadership position.  Because the commission hires the director, this position does not require Senate confirmation.

 

Revenue Forecast

The Office of Economic Analysis testified before the House and Senate Revenue Committees with another report projecting more revenue than previously estimated.  In short, the state’s economists project that the state will raise an additional $547.4 million in personal income tax and $588 million corporate tax above the 2023 estimates.  With these strong revenue estimates, the economists are also projecting a $582 million personal kicker and $588 million corporate kicker that is dedicated to K-12 education spending.  There are signs of economic slowdown on the horizon, however, that could impact future biennia.  Nevertheless, as we look at the 2025 legislative session, it appears the state is in a strong budget position and should not be asking Oregonians for new or increased taxes. 

 

Transportation

The Joint Committee on Transportation met and heard testimony from the Senate President, Speaker of the House, and transportation organizations urging action on a transportation infrastructure and funding package in 2025. ODOT estimates a total funding gap of $1.8 billion annually in agency operations and system safety investments and a funding gap of nearly $2.4 billion in infrastructure improvements included in the 2017 transportation package.  Those are huge funding needs that will put a lot of pressure on the 2025 legislature to resolve.

 

In addition, the Joint Committee on Transportation begins its 12-stop Transportation Safety and Sustainability Outreach Tour this week to hear from Oregonians about what should be included in a 2025 Transportation Package. The Joint Committee on Transportation will hold an opportunity for virtual testimony during September Legislative Days.  Before then, below please find the hearing locations and dates:

 

● Downtown Portland - Tuesday, June 4

● Tillamook - Tuesday, June 18

● Albany - Tuesday, July 16

● Eugene - Wednesday, July 17

● Coos Bay - Wednesday, August 7

● Medford - Thursday, August 8

● Ontario - Wednesday, August 28

● Hermiston - Thursday August 29

● Bend - Thursday, September 12

● The Dalles - Friday, September 13

● Happy Valley - Thursday, September 26

● Hillsboro - Friday, September 27

 

Separately, the Joint Committee on Transportation also received an update on the Port of Portland’s Terminal 6 container service.  Terminal 6 container service has become an important export terminal for Oregon agriculture. The state has had to invest $5 million in emergency funding to keep that terminal operational this year and it appears, the legislature will have to consider significant long-term funding options in 2025 to ensure Oregon producers have ready access to export markets.

 

Utility Rate Hikes

The Senate Energy and Environment Committee held an oversight hearing in an attempt to understand what is behind the significant rate hikes by investor-owned utilities (IOUs).  According to the Citizens Utility Board, since 2021 residential rates have increased by over 35% between the three major IOUs (42% for Northwest Natural, 35.2% for Pacific Power, 43.8% for PGE).  Even with those enacted rate hikes, PGE is asking for a 7.2% rate hike, Northwest Natural is asking for an 18% rate increase, Pacific Power is asking for an additional 21.6% rate increase and Idaho Power a 27% increase.  Legislators are very concerned about this level of rate increases in such a short period of time. 

 

The reasons for the rate hikes seem to vary and include inflationary pressures, needs to improve and harden systems to avoid wildfires, insurance rate increases, and arguably – policy pressures to divest in existing energy sources that rely on fossil fuels.  We expect legislators to continue to closely monitor these rate increases for residential, commercial, and industrial rates – especially as the state continues to pursue climate policies and any efforts to replace some Snake River Dams that are essential in providing reliable baseload power to the Northwest.

 

Call to Action on Water

Late last year, Governor Kotek’s natural recourse advisor, Geoff Huntington, appointed four lawyers who specialized in water rights to draft their recommendations for the modernization of Oregon’s water laws. It’s important to note the intentional diversity of viewpoints within the group, as each member represented a different entity, ranging from Native American groups to different agricultural groups. Huntington mentioned that if all four could agree on the best solution with water, he believed the majority of Oregon would agree as well. The group included Adell Amos, David Filippi, Janet Neuman, and Josh Newton and appealed for gubernatorial leadership to act. The appeal included six priority areas the group wanted to highlight. They presented their findings on Thursday to the Senate Interim Committee on Natural Resources.

 

The main takeaways included focusing on six priority areas.  First, the need for efficient collection, sharing, and use of high-quality water data. This encompassed making the collection and accessibility of water data. The second priority area was the need for more robust and coordinated water management systems. This entails more coordination between the Oregon Department of Environmental Quality, the Oregon Department of Agriculture, and the Oregon Department of Fish and Wildlife on water issues. The third priority area explained the need for a less rigid, more efficient water rights administrative system. Addressing this starts by addressing the limitations of the current OWRD system. Priority area four focused on the need for better recognition and integration of Oregon’s Native American Tribes and their traditional knowledge in state water policy development and administration. This step encourages government-to-government consulting with each Native tribe in Oregon to learn if and how they want to participate in the effort. Priority area five addresses the need for more attention to water security by all Oregonians and more equitable access to water resources. The group highlighted the need for more education resources for Oregonians. Lastly, the sixth priority expressed the need for sufficient and sustained funding to appropriately manage water resources and administer water rights. Lack of funding continues to plague the efficient administration of water law in Oregon.

 

The Governor expressed interest in the group’s recommendations and has directed the OWRD to pause their revisions on the State’s Integrated Water Resources Strategy to ensure that, when adopted, the strategy will be structured in a way to serve the water needs and interests of all Oregonians. We don’t know what this means yet for future legislation, but we will keep you updated.

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Watching for November Ballot Measures

While not part of legislative days, we were alerted that organizers of Initiative Petition 17 (“Oregon Rebate ”) submitted an additional 23,626 signatures toward the 117,173 needed to qualify for the November 2024 ballot. The measure seeks to increase the corporate minimum tax for filers with sales in excess of $25,000,000 to 3% (on sales above $25m). All funds raised by the measure are to be redistributed to Oregonians in equal payments. Proponents of the tax estimate a rebate of about $750 per person each year which, based on current population, means they expect it to raise more than $3 billion annually.  Oregon Business and Industry is coordinating the business community on a potential opposition campaign and we will be joining those calls when they start in the coming weeks. 

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This review is provided by Romain Freese, LLC. https://www.rflawlobby.com/

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WASHINGTON

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The Washington State Legislature adjourned Sine Die around 5:50pm on the 60th and final day of the short supplemental session. Budget negotiations were ongoing since Friday, March 1 which was the last day to pass opposite house bills by 5 p.m.

 

The final week of this year’s session was consumed by finalizing supplemental budget negotiations, passing several initiatives to the legislature and a very controversial bill to allow Puget Sound Energy to charge more for gas to recoup infrastructure costs, and reconciling the differences between bills passed in the House and Senate.

 

Earlier this week, Rep. Spencer Hutchins Johnson (R-Gig Harbor) added to the list of legislator retirements when he announced he will not run for re-election this fall so he can spend more time with his family.

 

The list of retirements include:

• Senate Majority Leader Andy Billig (D-Spokane) will be stepping down when his term ends after serving in the Legislature for 14 years. Rep. Marcus Riccelli (D-Spokane) announced he will run for this open Senate seat in the 3rd Legislative District

• Senate Labor & Commerce Committee Chair Sen. Karen Keiser (D-Des Moines) announced she will retire mid-term at the end of this year, having served 29 years in the Legislature

• Senate Ways & Means Ranking Minority Member Sen. Lynda Wilson (R-Vancouver) announced her plans to retire when her term ends. Rep. Paul Harris (R-Vancouver) announced he will run for this open Senate seat in the 17th Legislative District.   

• Sen. Mark Mullet (D-Issaquah) will be leaving the Senate for a run for Governor.

• Sen. Kevin Van de Wege (D-Port Angeles) will be leaving the Senate for a run for Lands Commissioner.

• Long time Senate member Sen. Sam Hunt (D-Olympia) will be retiring.

• First elected in 2005, former Deputy Minority Leader Representative Joel Kretz (R-Wauconda) announced he will be retiring.

• Rep. J.T. Wilcox (R-McKenna) announced last week he will be retiring after serving 14 years.

 

Budget Bills Pass

 

During the last two days of session, the Legislature adopted the 2024 Supplemental Operating Budget (ESSB 5950), Transportation Budget (ESHB 2134), and Capital Budget (ESSB 5949). Full details for each bill can be found on the legislative website.

 

Initiatives

 

Six statewide initiatives to the Legislature were certified by the Secretary of State during the 2024 legislative session. House and Senate Leadership, under pressure from the public, held hearings for three of the six initiatives. The three initiatives that received hearings were: I-2111 (prohibiting income taxes), I-2081 (creating a parents’ bill of rights for children in public schools), and I-2113 (lifting restrictions on police vehicle pursuits). On March 4, all three initiatives that received hearings were passed by the House and Senate. The remaining three initiatives will go on the November General election ballot for voters to decide. They propose to repeal the Climate Commitment Act (I-2117), repeal the Capital Gains Tax (I-2109), and allow Washingtonians to opt-out of the Long-Term Care Insurance Program (I-2124).

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Operating Budget

 

The 2024 Supplemental Operating Budget relies on the February 24 revenue forecast with a 4.5% growth rate assumption applied for the 2025-27 biennium. The budget also depends on transferred reserve funds, including the Washington Rescue Plan Transition Account (WRPTA). The conference budget proposal transfers the full $798 million balance of the WRPTA account to the state general fund in fiscal year 2025.

 

There are nine revenue bills assumed in the conference budget. Two of the bills create a revenue loss: $47.3 million for HB 1976 related to increasing incentive payments for early adopters of the State Energy Performance Standard and $34.3 million for SSB 6316 related to limiting tolls on only the floating bridge portion of the SR 520 Corridor.

 

Funding from the 2024 Operating Budget proposed compromise includes:

 

• $757 million for K-12 public education and includes increased allocation to districts based on utilization for special education. 

• $660 million for behavioral health with an emphasis on opioid and other substance use disorder response.

• $94 million for housing and homelessness including funding for clean energy transitioning support including Washington Families Clean Energy Credits, which are utility bill credits of up to $200 based on income, to be made by September 15, 2024.

• $72 million for long term care including funding for a complex needs facility for serving 12 children with ADD and complex behavioral needs. 

• $281 million for healthcare and public health including $60 million for the University of Washington health system.

• $71 million for natural resources relying heavily on Climate Commitment Act funding for forest health and wildfire protection, including $30 million for farm and agriculture support – this is funding to support farm fuel users and transporters that would go out in four payment tiers and must begin in September 2024.

• $77 million for higher education to support increased access to the Washington College Grant program and increasing the number of health care workers in rural areas including rural workers, graduate medical students, dentists, and nurse anesthetists and the Washington College loan program.

• $150 million for children, youth and families that includes rate increases for ECAP in the amounts of 5% for school day slots and 9% for working day slots and rate increases for foster care is funded beginning in July 2025. 

• $145 million for corrections and other criminal justice that includes funding for training, certification, and for regional academies and basic law enforcement Academy instructors. 

• $130 million for human services that includes an emphasis on funding for food assistance and refugee and immigration services, including a $12 million increase for the senior nutrition program and a $10 million increase for the Department of Agriculture emergency food distance program. 

 

Capital Budget

 

The $1.3 billion 2024 Supplemental Capital Budget funds construction projects and infrastructure across Washington and makes major investments in school construction, behavioral health facilities, and affordable housing construction.  

 

School Construction

The budget makes investments in school construction, increasing state support in the School Construction Assistance Program from $271 to $375 per square foot – a total increase of $79 million in support for school construction. The budget also includes $68 million for skills centers and other career and technical education facilities, and $114 million for the Small District & Tribal Compact School Modernization program, which helps districts unable to pass their own school bonds for construction. 

 

Behavioral Health 

The budget provides a total of $82.7 million in behavioral health community capacity grants, to build behavioral health care facilities in communities across Washington. It expands investment in tribal behavioral health centers, innovative new projects being developed in partnership with tribes and the federal government to provide behavioral health and substance abuse treatment.

 

Affordable Housing

The budget includes $127.5 million for the Housing Trust Fund, building upon the record-breaking investments in affordable housing made in 2023.

 

Transportation Budget

 

The final conference Supplemental Transportation Budget provides $14.6 billion in appropriation authority. $8.2 billion is provided for capital projects and programs, and $6.4 billion is provided for operating programs. This is an increase of $1 billion over the enacted 2023-25 biennium Transportation Budget. Most of the increase is attributable to reappropriations of $900 million in capital spending from the 2021-2023 fiscal biennium, $324 million in new spending from additional Climate Commitment Act funds, increased operating spending, and updated project delivery information.

 

New Climate Commitment Act expenditures begin January 1, 2025. The proposed budget includes only spending items that can be paid for with anticipated resources, balancing the spending plan through the current 2023-2025 and subsequent 2025-2027 biennia. 

 

The 2024 Supplemental Transportation Budget proposed compromise focuses on traffic safety. Some spending highlights included for this purpose are outlined below.

 

• $5.9 million to the State Patrol for a 3rd trooper class, and $6.2 million for the restoration of previously vacant trooper positions based on updated information, and contingency funding for overtime and other emergent issues.

• $8.5 million to the WA Traffic Safety Commission for enhanced public education and enforcement efforts and to increase grants to local jurisdictions and community-based organizations for projects such as improving bike, pedestrian, and school zone safety.

• $2 million to evaluate and identify geographical locations across urban and rural settings to implement wrong way driving prevention strategies.

• $2.0 million in additional funding for WSDOT to further address risks to safety and public health associated with homeless encampments on WSDOT-owned rights-of-way.

• $1 million for a multi-faceted approach to supplement existing funding targeted at impaired driving and other enforcement, including additional high visibility enforcement and tribal traffic safety support.

• $1 million for a new WSDOT program designed to abate and reduce graffiti on public property.

• $1 million for WSDOT to develop a highway speed safety camera pilot program to test two or three automated traffic safety cameras on state highways.

• $1 million in combined funding for additional efforts at the state and local levels to improve compliance with ignition interlock device installation requirements associated with impaired driving offenses.

 

Project delivery challenges and anticipated cost increases have been addressed as much as possible within available resources. Several studies and initiatives are included to better prepare to address issues with project delivery in the future. These include the below items.

 

• $1 million for the Washington State Transportation Center to increase funding to address workforce shortages in civil engineering, environmental engineers, and related disciplines.

• $450,000 for the Joint Transportation Committee to evaluate and provide recommendations on alternative project delivery methods and innovative project delivery practices.

• $375,000 for the Joint Transportation Committee, in consultation with the Municipal Research and Services Center, to convene a work group to evaluate and provide recommendations on local projects streamlining delivery methods.

• $81,000 of the amount provided to the Washington State Transportation Center is to be used to evaluate and provide recommendations on workforce shortages in civil engineering, land surveying, and related disciplines, in consultation with the Board of Registration for Professional Engineers and Land Surveyors.

 

Priority Bill Updates

 

SB 5915/HB 2454- Extending an existing hazardous substance tax exemption for certain agricultural crop protection products that are temporarily warehoused but not otherwise used, manufactured, packaged, or sold in the state of Washington. Extends the hazardous substance tax exemption for agricultural crop protection products until January 1, 2028. The bill passed the legislature after being amended in the Senate. The final tax preference is extended to January 1, 2028. The bill as introduced would have been a ten-year extension. We will come back next year and work for a longer extension.

 

SB 5972- Concerning the use of neonicotinoid pesticides. The bill is sponsored by Senate Floor Leader Marko Liias, Senate Majority Leader Andy Billig and Senate Agriculture committee chair Kevin Van de Wege. The bill was amended in the House Ag committee that allows homeowners to do tree injections. Applicators with a license and farmers can still purchase and apply neonics with no new impacts. The bill passed the legislature and is headed to the Gov’s desk.

 

HB 2301- Improving the outcomes associated with waste material management systems, including products affecting organic material management systems. Establishes new grant programs related to food waste reduction and organic material management policy implementation. Amends organic material collection service requirements for local governments, residents, and businesses. Establishes color requirements for garbage, recycling, and organic material disposal bins. The bill passed the legislature and is headed to the Gov’s desk.

 

SB 6058- Facilitating linkage of Washington’s carbon market with the California-Quebec carbon market. The bill passed the legislature and is headed to the Gov’s desk.

 

Dead Bills

 

SB 6166- Extending the pesticide application safety committee. The Pesticide Application Committee (Committee) was formed in 2019 to explore how the Departments of Agriculture (WSDA), Labor and Industries (L&I), and Health (DOH), and the Washington Poison Center collect and track data and consider the feasibility and requirements of developing a shared database, including how the DOH could use existing tools to better display multiagency data regarding pesticides.

 

SB 5770- An act relating to state and local property tax reform. Increases the property tax revenue limit for local property taxes. Exempts property owners qualifying under the retired persons property tax relief program from 25 percent of part one of the state levy. Eliminates non-supplant restrictions applicable to local government taxing districts located in a county with a population of 1.5 million or more. Modifies the portion of a county current expense levy allocated in statute to funding county-owned hospitals. One Percent Property Tax Revenue Limit. For purposes of the revenue growth limit for state and local property taxes, the limit factor of 101 percent is replaced with a limit factor of 100 percent plus inflation and any banked inflation balance, with a cap of 103 percent.

 

SB 6304/HB 2262- An act relating to implementing certain recommendations of the transportation electrification strategy. Commerce may establish and enforce energy efficiency standards for replacement tires on passenger cars and light duty trucks with a GVWR not exceeding 10,000 pounds. If acting upon this authority, Commerce must adopt and amend rules necessary to implement, administer, and enforce such standards, with implementation rules taking effect at least one year after final rule adoption. Medium- and Heavy-Duty Vehicle Idling Prevention. Beginning January 2, 2025: every diesel-fueled commercial motor vehicle licensed to operate within the state with a GVWR of more than 10,000 pounds may not idle for more than five consecutive minutes at any location.

 

HB 2073- Concerning emissions of greenhouse gases from sources other than methane and carbon dioxide. Requires the Department of Ecology (Ecology) to complete a study by July 1, 2025, addressing sulfuryl fluoride and greenhouse gases with a high global warming potential used for anesthetic purposes (anesthetic GHGs), and to submit recommendations to the Legislature by October 1, 2025. Requires Ecology to develop a guidance document for the reduction of greenhouse gas emissions from the use of anesthetic GHGs, and requires facilities at which medical, dental, and veterinary practitioners use anesthetic GHGs to only use anesthesia in a manner consistent with the guidance document, beginning January 1, 2027. Requires Ecology to identify the availability and feasibility of safer alternatives to sulfuryl fluoride as a fumigant.

 

HB 2049- Improving Washingtons solid waste management outcomes. Requires that any exclusions for products regulated under the Federal Insecticide, Fungicide, and Rodenticide Act must be granted for a period of four years. On February 5 the bill was moved to the House Rules committee. Rep. Berry did strengthen the language exempting FIFRA products but not all fertilizer packaging. Rep. Fey’s striking amendment had our preferred language for all FIFRA products, removes all fertilizer packaging, and removes food containers that come into direct contact with fresh fruits, dairy products and vegetables for human consumption. Fey’s striking amendment had support from 14 House Democrats and there were not enough votes in support of the original bill to move it forward. This issue will be back next session.

 

HB 2144- Providing a deposit return program for qualifying beverage containers to be implemented by a distributor responsibility organization. This issue will be back next session.

 

HB 1574- Supporting Washington agriculture by capturing methane and reducing greenhouse gas emissions. Expands the scope of permissible uses of grant funds in the Sustainable Farms and Fields Program to include practices that increase carbon sequestration and reduce greenhouse gas emissions. Establishes an advisory committee to inform the agriculturalcommunity about opportunities to participate in various carbon emissions reduction programs and to guide grant awards.

 

HB 2051- Reducing emissions from small off-road engines. The bill included many small engines that the sponsors did not realize existed.

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