The Wilsonville Chamber advocates for business-friendly legislation at the local and state levels of government. We monitor public policy issues, so you can focus on your business, not government regulation.
The WACC Legislative Blog Report was created to serve as an important, bipartisan resource during the current Legislative Session. The Chamber’s goal is to report to our members with timely information to enable you to be well-informed and effectively involved in the legislative process.
2019 Legislative Report – Week 13
1.Revenue. As we’ve noted, there is currently over $5.67 billion in additional revenue proposals that are alive in the legislature. The crown jewel of the revenue proposals is HB 3427, the $2 billion gross receipts tax for K-12 and early education. OSCC is also very concerned about HB 2269, the sneaky $500 million health care tax on employers with 50+ employees. HB 2005, a $1+ billion tax to establish a new paid family leave program, is also alive in the legislature.
2.Cap and Trade. OSCC has consistently opposed HB 2020 and is currently working with key legislators on changes to the bill that would offset the increase in costs on electricity and natural gas for local businesses. These efforts could prove successful. But at the same time, there appears to be very little legislative effort underway to reduce the major increases in gas taxes that would result from the bill. An initial 16-cent per gallon gas tax hike is projected from the legislation. HB 2020 also establishes a new bureaucracy, the Carbon Policy Office, which would have broad powers over the economy.
3.SAIF raid / PERS reform / Cost Containment. The response to the Governor’s proposal to take $500 million from SAIF, take $500 million from the ‘kicker,’ and require active Tier 1 and Tier 2 public employees to contribute 3% of salary to their pension has hit with a thud. Republicans will not support taking the ‘kicker,’ unions won’t support public employee contributions to the pension, and business is vehemently opposed to raiding SAIF.
4.Ancillary business issues. OSCC continues to be concerned with the significant number of bills that would hurt business operations (SB 379, marijuana accommodations), hurt economic development (HB 2408, prevailing wages in enterprise zones), hurt existing programs (SB 595, diversion of transient room taxes to fund housing), create additional liabilities (SB 726, workplace harassment liability) and add additional business costs (HB 2014, eliminates $500k cap on non-economic damages in civil lawsuits).
Activity on Major Issues
- The $2 billion Commercial Activity Tax (HB 3427) is now clearly the top priority of legislative leadership.
The Thursday public hearing was a disaster for business as only OSCC and two agricultural groups showed up to testify against the gross receipts tax.
HB 3427 has the following components:
O A flat $250 tax on all business entities for sales under $1 million;
O All business entities with sales over $500,000 must register with the state;
O A gross receipts tax rate of 0.49% on Oregon sales over $1 million;
O A 25% deduction from taxable sales for labor OR business inputs, whichever is higher;
O An exemption for receipts from sales to a wholesaler or ag cooperative for any sales outside of Oregon; and
O An exemption for groceries (defined as those that qualify for ‘SNAP’).
OSCC testified against the proposal because of its impacts on small and start-up businesses.
- SAIF. There is ongoing negotiation between SAIF and the Governor’s office about SAIF’s potential contribution to the PERS unfunded liabilities. The Governor’s office is looking for a $700 million contribution from SAIF while SAIF believes it can contribute somewhere in the neighborhood of $300 million over the next 7 years without impacting policyholder rates and dividends. OSCC continues to be opposed to a raid on SAIF to pay down PERS liabilities.
What happened last week?
- Prevailing wages in enterprise zones. OSCC was disappointed to see that HB 2408 passed the House floor so easily. The bill required prevailing wages on all private projects in Enterprise Zones in excess of $20 million. Such a policy erodes one of Oregon’s last remaining economic development tools. OSCC will fight the bill much harder on the Senate side.
Other Key Issues Coming up This Week
The upcoming week is going to be fairly quiet on key issues. There will be no additional hearings on Cap and Trade this week, but there will be consideration of the following:
- HB 2269 health care tax. OSCC strongly objects to this legislation which will give the Department of Consumer and Business Services (DCBS) a blank check to determine how much each business ‘should’ be spending on health care for its employees and then tax each business that does not spend as much on health care as DCBS believes it should. The bill will be engineered to raise $500 million per biennium. To make matters worse, Legislative Counsel has determined that because the bill simply allows an agency to construct and levy the tax, it does not require the 3/5th supermajority to pass the legislature.
- HB 3022 workers’ compensation compromise. OSCC initially testified against this legislation, which would have upended 30-years of successful workers’ compensation reforms and drastically raised workers’ comp costs on employers. However, the bill was deftly negotiated by SAIF so as to end up a compromise bill that won’t impact employer rates. OSCC continues to monitor to ensure that the terms of the compromise are honored.
ACTION ALERT It is vitally critical that chambers respond to the Action Alert on HB 3427, the $2 billion gross receipts tax on Oregon businesses. We have very little ability to impact this debate unless Chambers show up!
2019 Legislative Report – Week 8
This is the week that Senate President Peter Courtney is slated to return to the legislature from his 10-day ‘medical leave.’ Many have speculated that President Courtney will take the opportunity to step away from leadership and the legislature, but we have no reason to believe this is the case. We expect him to return.
We continue to be amazed that every major revenue-raising proposal is still on the front-burner so far this session. There continues to be a full court press by legislative leadership to pass a major business tax increase and a carbon pricing bill (cap and trade) and a paid family leave system, and another round of Medicaid taxes. The cumulative tax impact of all of these measures could easily approach $5 billion per bennium!
Finally, the flood of new 2019 legislation has ended. New bills are now coming out in a trickle. As of this today, about 2,500 pieces of legislation have been introduced for the 2019 legislative session. This represents approximately 90% – 95% of all the legislation we expect to see in 2019.
From this point forward, every legislator has five (5) priority bills that they can introduce. This means we could potentially see another 450 bills introduced, but it is more likely that we’ll see just a fraction of that amount.
The next few weeks will be intense due to looming deadlines. Bills need to be posted for committee votes by the end of Friday, March 29th in order to receive further consideration. By Tuesday, April 9th, all bills need to be voted out of their original committee in order to survive.
Activity on Major Issues
- Cap & Trade. (HB 2020) On Monday, the Joint Committee on Carbon Reduction heard from the Oregon Department of Forestry about sequestration on Oregon forestland. The report explained that Oregon forests sequester half of all carbon that we emit annually (31 million metric tons of carbon). The presentation was eye-opening, particularly since Oregon’s carbon reduction goals that were set in the early 2000s were developed without acknowledgment of the sequestration potential from Oregon’s farms, forestlands, or even urban tree stands. In light of this new information, the state is already well-on-its-way to meeting the carbon reduction goals established by the bill. The Joint Committee is still working on amendments to HB 2020, which should be available at the end of the week.
We are expecting to brand new amendments, and perhaps a total re-write of the bill, to be unveiled this week. We are not anticipating major improvements to the bill, but because the amendments are being closely guarded, we really have no idea what the new amendments will include. There are currently not enough votes to pass this bill, but we believe a bill will pass. It will likely undergo numerous re-writes over the next few months to accommodate concerns from OSCC and others who represent businesses that will be impacted.
- Kicker. (HB 2975) OSCC missed this bill, as did every other business group, but House Republicans found out at the 11th hour that HB 2975 included an accounting change that reduced the upcoming kicker by over $100 million by transferring this money into the next biennium. HB 2975 has the effect of adding an additional $100 million of revenue into the 2019-21 budget by taking it out of the $748 million personal income kicker due to taxpayers next year.
- Corporate Tax Increases. We still believe the committee is leaning toward selecting a Commercial Activity Tax, which is a pure gross receipts tax, as the basis for implementing a new business tax. The debate here is how much the legislature wants to raise. House Democratic leadership wants to raise business taxes by $3.4 billion per biennium. Senate Democratic leadership wants to raise business taxes by $2 billion. We want all chambers and businesses to understand that the Commercial Activity Tax is being discussed ‘in addition to’ current business income taxes, not ‘in lieu of.’
- Age Discrimination. (HB 2818) On Wednesday, House Business & Labor Committee held a hearing on HB 2818, which makes it an unlawful employment practice for an employer to seek the age of an applicant or to include certain words or phrases in recruitment that suggest age preference. The most problematic part of HB 2818 is the penalty structure. Under this bill, a court may award liquidated damages equal to twice the economic compensatory damages awarded or $25,000, whichever is greater. OSCC has joined a coalition business group to oppose HB 2818.
Other Key Issues Coming up This Week
- Lawsuit Damages. (HB 2014) We were very surprised to see this bill posted for a committee vote on Monday afternoon in House Judiciary. OSCC testified alongside local physicians and health care providers against HB 2014 in testimony that far outweighed the trial lawyer proponents. HB 2014 would repeal Oregon’s legal limit of $500,000 on non-economic damages in personal injury and negligence lawsuit claims. OSCC, health care groups, and business organizations are opposing this legislation because it is a significant factor in driving up health care costs and general liability costs for employers.
- Lodging Taxes. (SB 595) We continue to be amazed at the movement of SB 595, which allows local government to use 30% of all new local lodging taxes to fund “affordable, workforce housing.” It passed the Senate Housing Committee two weeks ago and now gets consideration in the Senate Finance & Revenue Committee this week.
- OregonSaves. (SB 164) OSCC has been working with the Treasury on an amendment to SB 164, which is scheduled to pass out of committee next week. As a reminder, SB 164 would assess civil penalties to businesses that fail to comply with the Oregon Retirement Savings Program requirements. OSCC joined other employer groups in supporting the -3 amendment to SB 164:
- Gives all businesses, regardless of size, two years to get into compliance;
- Caps civil penalties, so businesses are not on the hook for unknown costs; and
- Ensures that training and education are the first steps toward compliance.
- 2% Kicker. (SJR 23) The Senate Finance & Revenue Committee will be considering the referral of a ballot measure that would put all 2% personal kicker monies into an account to fund education.
- OSCC has issued an ACTION ALERT for HB 2498 (Independent Contractors) for the House of Representatives. THANK YOU FOR THE GREAT RESPONSES. OSCC is literally changing the outcome on this legislation! Let’s continue to pour it on! To date, OSCC has generated 201 letters to legislators on this bill.
- OSCC has issued an ACTION ALERT for HB 2020 (Cap & Trade) for all legislators. PLEASE RESPOND ASAP WITH YOUR MESSAGE. To date, OSCC has generated 208 letters to legislators on this bill. Our goal is 1,000.
Save the Date for Family Leave Hearing!
On Monday, March 25 at 6 pm, the House Business & Labor Committee and Senate Workforce Committee plan to host a joint public hearing on paid family & medical leave bills that would SIGNIFICANTLY alter Oregon’s business climate. We need local Chambers to show up that evening to speak out about the impact of this extreme legislation! An action alert will follow later this week.
What do the bills do?
HB 3031 (requires 3/5 vote)
- Applies to employers with 1+ employees
- Mandates 32 weeks of paid and protected family and medical leave each year
- Establishes new payroll tax of up to 1%:
o 0.5% paid by employers
o 0.5% paid by employees
o Creates a state-run family insurance program
o Doesn’t allow employers to provide substantially similar plans/ currently existing plans
HB 3140 / SB 947 (don’t require 3/5 vote)
- Expands OFLA eligibility to 1+ employees
- Expands family member definition
- Mandates 24 weeks of paid and protected leave AND an additional 24 weeks of unpaid family and medical leave each year
- Requires 100% of employee wages to be paid 100% by employers while an employee is on leave
2019 Legislative Report – Week 7
First off, Senate President Peter Courtney takes a 10-day ‘medical leave’ to deal with the stress of the session and its impact on his Grave’s Disease. There is wide speculation that he may not return. We aren’t able to separate fact from fiction at this point, so our assumption is that he will return. If he does not return, the trajectory of the session and the Democrats’ ability to pass major progressive legislative priorities is certainly imperiled.
The second major event of the week was the release of the Ways & Means Co-Chairs’ 2019-21 budget blueprint. The budget proposal only left K-12 and Medicaid harmless. All other state programs, including early education, higher education, and CTE were cut short of ‘current service levels.’ The hue and cry that ensued, primarily from the government employee unions and higher education advocates, added more fuel and momentum for additional business taxes.
Finally, we have grown increasingly concerned that SAIF Corporation will indeed be targeted for a raid of its workers’ compensation claims reserves to buy down PERS rates for K-12. We have reached this conclusion as it has become clear that any increase in business taxes will be absorbed almost totally by increased PERS costs within two short years. This would make it much less likely that business and/or voters would approve of any additional taxes.
We are getting the distinct impression that Democratic leadership will try and force a choice to buy down PERS rates: either suspend the $748 million personal ‘kicker’ and divert it to paying down PERS rates for K-12 schools or face the prospect of taking a similar amount out of SAIF’s reserves.
Activity on Major Issues
Cap & Trade. (HB 2020) We are expecting brand new amendments, and perhaps a total re-write of the bill, to be unveiled the week of March 18th. We are not anticipating major improvements to the bill, but because the amendments are being closely guarded, we are unsure of what the new amendments will include.
Independent Contractors. (HB 2498) OSCC was very successful in getting quick grassroots feedback into the House Rules Committee in opposition to HB 2498. As a quick reminder, HB 2498 would have turned Oregon’s independent contracting laws upside down, jeopardizing thousands of jobs. OSCC joined several other business organizations to testify last Monday. We were joined by Keizer Chamber’s Dan Kohler, who spoke about the detrimental impacts to insurance, funeral home, and salon contractors. The Committee is weighing options as it considers a different path forward. Thank you to Bend Chamber and all who weighed in!
Corporate Tax Increases. It is becoming clearer that the Revenue Subcommittee of the Joint Student Success Committee is starting to hone in on a new Commercial Activities Tax (CAT) as the basis for adding new revenue to the state’s K-12 system. There is an outside chance the committee may support a Business Activity Tax (which allows deductions for capital expenditures), but early indications are that Democratic leadership is favoring the CAT, which in its current modeling, would be a straight 0.48% tax against a company’s topline sales. This would be in addition to Oregon’s corporate income tax. The subcommittee is clearly trying to raise a net $1 billion extra per year from Oregon companies.
Lawsuit Damages. (HB 2014) OSCC testified alongside local physicians and health care providers against HB 2014 in the House Committee on Judiciary. HB 2014 would repeal Oregon’s legal limit of $500,000 on non-economic damages in personal injury and negligence lawsuit claims. OSCC, health care groups, and business organizations are opposing this legislation because it is a significant factor in driving up health care costs and general liability costs for employers.
Other Key Issues Coming up This Week
- Employment contracts. (HB 2489) OSCC is closely watching HB 2489, which would substantially shift the relationship between employers and employees in Oregon. The bill eliminates an employer’s ability to enforce agreements if they aren’t written and disallows employment contracts of longer than two years. A preliminary hearing is scheduled this week in House Business and Labor.
- OregonSaves penalties. (SB 164) This bill is tentatively scheduled for a work session on Thursday. SB 164 would add penalties to the Oregon Retirement Savings Program, which passed in 2015. OSCC worked with the Treasury and other business stakeholders to address our concerns with the initial bill, and these changes will be reflected in a -3 amendment.
- Age discrimination. (HB 2818) The House Committee on Business and Labor is planning to host a hearing on HB 2818 on Wednesday. This bill makes it clear that employers may not screen job applicants based on age and adds new and substantial penalties to violation of age discrimination laws.
- OSCC has issued an ACTION ALERT for HB 2498 (Independent Contractors) for the House of Representatives.
- OSCC has issued an ACTION ALERT for HB 2020 (Cap & Trade) for all legislators.
- PLEASE RESPOND ASAP WITH YOUR MESSAGE. To date, OSCC has generated 202 letters to legislators on this bill. Our goal is 1,000.
2019 Oregon State Chamber of Commerce Legislative Report – Week 6
Activity on Major Issues
Cap & Trade hearings provided a dose of reality. Hearings in the past week in Newport, Baker City, The Dalles, and Bend provided lawmakers with the stark reality that not all Oregonians are clamoring to pay more for their gasoline, natural gas or electricity to put only a very minuscule dent in Oregon’s greenhouse gas reductions. In what was expected to be a showcase for the organizing strength of the environmental activists, something else happened….regular working Oregonians showed up and voiced their displeasure with HB 2020 and its associated costs.
Medicaid taxes passed. Final passage of the first major Medicaid funding bill, HB 2010, happened this past week. The bill raised over $500 million and will go a long way to closing the state’s $623 million budget gap. OSCC issued a floor letter on HB 2010. Our intention was to make sure that legislators understood that HB 2010 will raise over $291 million per biennium from local businesses. It was the first major business cost increase from the 2019 session.
Rent control passed. The statewide rent control bill, SB 608, also passed the House and became law as Governor Brown quickly signed the bill. It is the first statewide rent control bill in the nation and limits annual rent increases to 7% plus CPI on buildings over 15 years old.
OSCC opposed HB 3022 which overturns Oregon’s landmark workers’ compensation reforms. OSCC testified against HB 3022 last week, a bill that would have reversed many key, cost-saving provisions in Oregon’s workers’ compensation system. Before 1990, Oregon had the highest frequency of workplace injury claims, third highest medical costs, and the sixth highest premium costs. Today, we have some of the lowest rates in the country and safety programs that help reduce workplace injuries. Oregon’s workers’ compensation insurance system is one of the last remaining competitive advantages for Oregon companies and OSCC will vigilantly safeguard the system from being compromised.
Oregon revenue forecast added another $67 million to state coffers for the upcoming 2019-21 budget cycle. The state is experiencing a rush of short-term revenue that will slightly ease the budget crunch for the upcoming budget cycle. The “kicker” rebate projection was also increased to a whopping $748 million.
Other Key Issues Coming up This Week
Independent Contractors. (HB 2498) On Monday afternoon, the House Rules Committee will consider importing California’s troubled Dynamex decision. In April 2018, the California Supreme Court determined that independent contractors must meet a new strict “ABC” test in order to maintain their status. That decision impacted 2 million independent contractors in California, making them employees! Now Oregon is looking to follow suit. HB 2498 would add a new test to Oregon’s independent contractors: “Do you provide a service different from the business you are working for?” If the answer is “no,” HB 2498 would reclassify you as an employee of the business. Implications are broad-doctors, hairstylists, insurance agents, realtors, and many others will be impacted if HB 2498 passes.
Lawsuit Damages. (HB 2014) This bill is scheduled for a public hearing in the House Committee on Judiciary this Tuesday. HB 2014 would repeal Oregon’s legal limit of $500,000 on non-economic damages in personal injury and negligence lawsuit claims. OSCC, health care groups, and business organizations have traditionally opposed this legislation because it is a significant factor in driving up health care costs and general liability costs for employers.
Transient Lodging Taxes for workforce housing. (SB 595) This may clear its first hurdle this week in the Senate Housing Committee. SB 595 would allow local governments to use previously dedicated TLT funds and apply them to local workforce housing development. Currently, 70% of these revenues are statutorily dedicated to tourism and tourism promotion. If the committee approves the bill, it will be forwarded to the Senate Finance & Revenue Committee.
OregonSaves penalties. (SB 164) This bill is scheduled for a work session on Thursday. SB 164 would add penalties to the Oregon Retirement Savings Program, which passed in 2015. OSCC worked with the Treasury and other business stakeholders to address our concerns with the initial bill, and these changes will be reflected in a -2 amendment.
- OSCC has issued an ACTION ALERT for HB 2498 (Independent Contractors) for the House Rules Committee.
- OSCC has issued an ACTION ALERT for HB 2020 (Cap & Trade) for all legislators. PLEASE RESPOND ASAP WITH YOUR MESSAGE. To date, OSCC has generated 174 letters to legislators on this bill, well short of our goal of 1,000.
- OSCC has issued an ACTION ALERT for SB 379 (Workplace Marijuana Accommodation) in the Senate. PLEASE RESPOND ASAP WITH YOUR MESSAGE TO SENATORS! (Senators only) To date, OSCC has generated 72 letters to Senators on this legislation, well short of our goal of 250.