The April 18th committee deadline is now behind us. We know everything that’s in play. All in all, OSCC members are in far better shape than in previous sessions.
Yes, there are a handful of threats to the general business community – predictive scheduling, taxes, and a ‘Cleaner Air Oregon’ regulatory scheme that could threaten business operations, but those threats are relatively limited compared to what we’ve seen in the past.
There are also a few opportunities… the chance to overturn a recent BOLI interpretation that forces double overtime payments, the chance to execute a rational approach the regulation of diesel engines, and a chance to solve a $1.8 billion budget hole with no general business taxes.
Here’s what we know from the past week:
The tax/revenue environment is very fluid. As we said last week, OSCC has reason to believe that the emerging strategy of the legislative leadership is to pass an “all cuts” budget and then refer a tax increase measure to the ballot in order to add back programs that will be cut in the newly-adopted budget.
But it looks like this strategy simply has too many holes to work. For one, the Democratic majority likely won’t have the votes to pass the necessary cuts without Republicans. Also, any attempt to refer a tax measure to the ballot would also likely require a 3/5 supermajority. Quite simply, this won’t happen.
Business opposition is growing against a gross receipts tax… so much so that we no longer believe it is a viable option.
The legislative “Cost Containment” workgroup made their first presentation on Friday. In a word, it was underwhelming. Very few specifics emerged. There was a lot of academic discussion on PERS reform and curtailing state hiring, but most of those ideas seemed to be shot down immediately by members of the Ways & Means panel. It gave the distinct impression that there was not a single thing the state could do to slow down escalating costs.
PERS Reform was kept alive, but barely, and certainly not in a manner that would suggest that there will be a serious effort to implement any cost saving reforms to the state pension program. After 10 weeks of discussion, both PERS reform bills, SB 559 and SB 560, were sent to Ways & Means unamended and with no recommendation – hardly a prescription for success.
Here is the fate of the bills of concern to OSCC members:
SB 301 would effectively preclude employers from enforcing zero tolerance drug policies. Although the bill passed out of Senate Judiciary on a 3-2 party-line vote, OSCC immediately went to work to defeat the bill. It is being sent back to committee where it will die.
SB 828 / HB 2193 would implement predictive scheduling for food service, retail and hospitality businesses. Both bills are alive. SB 828 will be the focus of a lot of pressure from union groups. They are coalescing to try and pass the bill.
HB 3087: paid family leave – is still alive in the House Revenue Committee. The bill implements a .5% payroll tax on employers to fund the $800 million per year program that grants 12 weeks of paid leave.
SB 292: unlawful employment action for “workplace bullying,” is now dead.
SB 997 would levy fines on all employers with 50 or more employees whose employees opt to enroll on the Oregon Health Plan. This bill is now dead.
SB 984, which fixes BOLI’s bad interpretation on daily/weekly overtime pay was sent to the Senate floor for a vote.
SB 329, which preempts local employment law mandates, was also kept alive.
SB 1008, the costly mandate for diesel engine retrofits and replacements, was stripped down to require the state to take inventory of diesel engines operating in Oregon with no additional regulation. This is a reasonable approach that OSCC can support. SB 1008 was kept alive.
HB 2669: ‘Community Right to Know’ – was killed. This bill would have allowed local jurisdictions to implement their own ‘Right to Know’ chemical inventory programs and would have allowed local governments to levy annual fees up to $10,000 on regulated businesses.
The big bill here – HB 2269 – which would increase Title V and ACDP fees to fund the new DEQ ‘Cleaner Air Oregon’ regulatory scheme, was voted out of committee on a 5-4 party-line vote and sent to the Ways & Means Committee. This will likely be the big environmental fight of the session.
HB 2236 was also kept alive which requires the DEQ to conduct a study and develop recommendations relating to emissions of air contaminants from industrial sources.
SB 197 – a disaster for the dairy industry – allowed the DEQ to adopt a program for regulating air contaminant emissions from dairy confined animal feeding operations. This bill is now dead.
Tourism and TRT Funding:
Both HB 2744 and HB 2768 were killed in the House Economic Development and Trade Committee. These bills would have allowed local government much more latitude to spend state TRT money on ‘tourism-related’ projects not related directly to tourism promotion. The bills pitted local governments against the Restaurant, Lodging and Hospitality industry. In the end, they fought to a stalemate and the bills did not advance.
HB 3260 authorizes coastal counties to impose local transient lodging taxes on residential short-term vacation rental properties by submitting the issue to county voters. This bill is still very much alive.
SB 737 (formerly 487), which would eliminate the $500k cap on non-economic damages in civil lawsuits, passed out of the Senate Judiciary Committee on a party-line vote. As of right now, we expect this to be the first major bill of the session to be defeated and sent back to committee. We are expecting a vote this week.
HB 2169 would have disallowed attorney fees for employers who prevail in wage disputes with employees. Current law allows the prevailing party to collect attorney fees. HB 2169 is now dead.
Taxes & Budget:
As we suggested last week, the House Revenue Committee is taking up the issue of corporate tax disclosure for any company that avails itself to a business tax incentive. The bill is House Bill 2019. We now believe that this bill is a legitimate threat. Any company that receives $500 or more in business tax incentives will be subject to disclosure on Oregon sales, Oregon taxable income and Oregon tax liability.
We also reiterate our belief that there will be a real attempt to scale back the small business tax cut passed by the legislature in 2013. This is one issue that we expect that Republicans may assist Democrats in raising revenue. Republicans have shown a willingness to consider eliminating the lower tax rates for LLP’s. The bills to watch here are SB 164 and SB 165.
Also of note, all tax and budget issues are still alive. Any tax bill residing in the Revenue Committees, or budget bill residing in Ways & Means, is not subject to deadlines. OSCC will monitor these bills until the very end of session.
As we noted last week, OSCC expects that the Ways & Means Committee will be engaged in an inordinate amount of policy work this session as committee chairs have now punted critical policy bills to Ways & Means to keep them alive.