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 biennium!
 
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.
 
 

• 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 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 groups to oppose HB 2818.

 

• 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: 

1. Gives all businesses, regardless of size, two years to get in to compliance;
2. Caps civil penalties, so businesses are not on the hook for unknown costs; and
3. Ensures that training and education are the first steps towards 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.

    
On Monday, March 25 at 6pm, 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%:
  • 0.5% paid by employers
  • 0.5% paid by employees
  • Creates state run family insurance program
  • 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 employee is on leave