2019 Legislative Report – Week 4

We have now completed four weeks of the 2019 legislative session. No deadlines are imminent. Committees have a full two months to work on current legislation. New bills continue to dribble out at a very slow pace – about 1,800 pieces of legislation have been introduced so far.

What’s Happening (OSCC Political Observations)

Our observations are largely unchanged from last week.

The two major bills that are moving quickly – rent control (SB 608) and the first Medicaid funding bill (HB 2010) – will likely get very close to final passage this week.

The other major bill now in full swing – cap and trade (HB 2020) – will get a public hearing in the Capitol on Monday night, a public hearing in Springfield on Friday, and a public hearing in Medford on Saturday.

Additionally, as we noted last week, the legislative conversations are now underway on a major business tax to fund K-12 education. This discussion is happening in the Joint Student Success Committee on Tuesday evenings. Already, it appears there are major hurdles to passing additional tax revenues for schools – namely the potential cumulative effect of all the tax and regulatory bills that Legislative Democratic leadership wants to pass before considering a new business tax for schools.

Activity on Major Issues

This week will be a very busy week of new policy discussions which will impact the local business communities across Oregon:

  • Medicaid Funding will likely pass the House and maybe even the Senate. (HB 2010) This is the bill that will implement the first stages of Medicaid funding proposed by the Governor – the Hospital provider tax ($98 million) and the insurance/provider tax ($410 million). OSCC has ascertained that $291.6 million of this package will be a direct tax on small business health insurance premiums. This is the first direct tax on local business in the 2019 legislative session.
  • Rent Control will get a Senate vote this week. (SB 608) After passing the Senate last week on a party-line vote of 17-11, we expect this bill to pass quickly out of the House Human Services Committee on Wednesday this week. SB 608 has two key features: (1) it limits rent increases to 7% plus CPI in all buildings over 15 years old, and (2) disallows no-cause evictions after one year.
  • Cap & Trade public hearings now in full swing. (HB 2020) There will be three hearings on Cap & Trade this week. Monday evening at 5pm in the Capitol. Friday at noon at the Springfield City Hall. Saturday at 9am at Central Medford High School.  OSCC participation will be needed. OSCC has issued an ACTION ALERT with messaging points.
  • Small business tax cut repeal. (SB 211) OSCC is disappointed, but not surprised, to see the Senate Finance & Revenue Committee taking up the issue of repealing Oregon’s lower tax rates for pass-through businesses on Tuesday. Oregon’s ‘small business tax cut’ law currently imposes lower tax rates on the first $5 million of business income. SB 211 would apply lower tax rates to only the first $415,000 of business income and then would completely repeal the ‘small business tax cut’ altogether starting in 2026. We do not yet know how this issue will develop.

Other Key Issues Coming up This Week

  • Unemployment Insurance for Federal Employees. (SB 722) We will be watching this issue closely as legislators are looking to extend unemployment benefits to federal workers (who do not pay into the state system) in the event of a federal government shutdown. It appears the financial impacts of the legislation are negligible, but it does represent an additional demand on the state unemployment system which is neither paid for nor accounted for.
  • Property taxes. The Senate Finance and Revenue committee will take testimony on proposals to repeal property tax limits (Measure 50). We do not believe this issue will get traction in 2019, but we do believe that momentum is gradually growing for property tax reform that would loosen current limits or re-establish market value as the basis for tax assessments.
  • Transient Lodging Taxes for workforce housing. (SB 595) Interesting proposal in Senate Housing Committee this week that would allow local governments to use previously dedicated TLT funds and apply them to local workforce housing development. This represents yet another potential fight for TLT funds, which to date, are 70% dedicated to tourism and tourism promotion.
  • Broadband Deployment / Cell Phone Taxes. (HB 2173, HB 2184) An interesting debate is taking shape on the issue of broadband deployment and fully capitalizing the Oregon Universal Service Fund (OUSF) which finances broadband infrastructure. Currently, landline carriers must pay into the OUSF (this money is collected in a tax on customers) while wireless carriers are exempted. HB 2184 would eliminate the exemption on wireless carriers, which would translate effectively into a ‘cell phone’ tax. This issue pits the landline carriers versus the wireless carriers. In the meantime, traditionally conservative rural groups (ie The Oregon Farm Bureau) are supporting the tax. The House Economic Development Committee is hosting this debate. OSCC does not yet know the direction of this issue.
  • Bans on single-use checkout bags, polystyrene containers. The House Environment and Energy Committee will host a public hearing on legislation to ban the use of single-use plastic checkout bags and polystyrene containers that are popular for take-out food. The plastic bag ban is HB 2509, and the polystyrene container ban is HB 2883.
  • Health care data. (SB 703) The Senate Judiciary Committee will consider legislation this week that would ban the HIPAA -compliant transfer of de-identified data without individual consent.  SB 703 could have significant impacts on medical research, observational analyses and the development of genetic-based medicine. The bill was introduced at the request of Hu-manity.co, a company seeking profit from sale of its blockchain technology platform.

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