Subcommittee advances HB 2337 to create small‑business procurement preferences

The Transportation Economic Development Subcommittee of the Ways and Means Committee on June 11 adopted an amendment and voted to send House Bill 2337 to the full committee with a due‑pass recommendation. The measure would direct the Oregon Business Development Department to create a certification program and grant procurement preferences to qualified small business enterprises.

The bill matters because it would change how state procurement can favor certified small businesses and requires the Business Development Department to report program participation, the number and value of contracts awarded and assistance delivered. The Legislative Fiscal Office reported an administrative fiscal impact of $233,373 in lottery funds and 0.75 full‑time‑equivalent position for the 2025–27 biennium; the LFO recommended adoption of the bill’s A3 amendment, which provides lottery funding for those administrative expenses.

Under HB 2337, the Oregon Business Development Department would develop a certification program for “small business enterprises” that state agencies could use when soliciting bids. The measure also requires OBDD to report on program participation, the number and value of state public procurement contracts awarded to certified small business enterprises and on assistance provided through the program.

Legislative Fiscal Office staff summarized the fiscal effects: “There’s a fiscal impact to the Oregon Business Development Department for program administration in the amount of $233,373 lottery funds and 1 position 0.75 FTE for the 2025–27 biennium,” and noted a fiscal‑impact statement is posted to OLISS on the A.N. Gross version of the bill.

Committee members debated implementation details that would be determined later in rule‑making. Representative Watanabe cautioned against creating a new certification that could dilute existing disadvantaged‑business programs, saying, “I also want to caution too that, we don't dilute a program that is already doing excellent work in terms of identifying businesses that need some additional support.” Watanabe urged careful attention to how thresholds are set during rule‑making, noting that revenue and employee counts can affect industries differently and giving examples (a law firm with higher revenue but few employees versus a labor‑intensive agricultural firm).

Representative Kate also opposed the measure in its current form and said the bill risks adding complexity to procurement priorities, calling for greater consistency and flexibility in how priorities are applied: “I'm going to be a no today just because I think that that we should have more consistency and not keep putting more restrictions around how they have to do procurement.” Kate also raised concerns about constraints on local entities’ ability to prioritize local purchasing.

Procedurally, the committee adopted the A3 amendment by unanimous consent after the Legislative Fiscal Office recommended it. A subsequent motion to move HB 2337, as amended, to the full committee with a due‑pass recommendation passed on a roll‑call vote. The roll call recorded the following positions: Senator Starr — aye; Senator Niro Missland — aye; Co‑chair Meek — aye; Representative Kate — no; Representative Winn — aye; Representative Scarlato — excused; Representative Watanabe — aye; Co‑chair Gomberg — aye. The motion passed.

Committee staff noted there was no named House sponsor on the version in the packet; members discussed asking Representative Scarlatos to carry the bill in the House and Co‑chair Meek to carry it in the Senate. Committee staff also reminded members that implementation details (including certification thresholds and any streamlining of existing certifications) would be set in subsequent rule‑making and that concerns raised in the hearing would be part of the committee record.

The subcommittee closed the work session on HB 2337 and continued with routine business. Members said the committee may be called back to consider two large budgets not yet heard — the Bureau of Labor and Industries budget and the transportation budget — before the session ends.