2019 Legislative Report – Week 3

We have now completed three weeks of the 2019 legislative session.  The upcoming week appears to be an abbreviated week with several committees being cancelled or otherwise not scheduled to meet this week.

What’s Happening (OSCC Political Observations)

Two major bills are moving quickly – rent control (SB 608) and the first Medicaid funding bill (HB 2010).One other major bill is now in full swing – cap and trade (HB 2020).Additionally, the legislative conversations are now underway on a major business tax to fund K-12 education.  This discussion is happening every Tuesday and Thursday evening in the Joint Student Success Committee (Revenue Subcommittee).  To date, the committee is looking at other state taxing models that utilize gross receipts – Washington, Nevada, Ohio, and others.  At this point, it looks most likely that the committee will recommend a gross receipts-based tax and not additional increases to the state’s corporate income tax.

Activity on Major Issues

We are expecting to see early activity this week on a handful of key policy and budget items that Democratic legislative leaders have identified as key priorities, including:

  • Medicaid Funding will likely pass Ways & Means this week (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 tax ($410 million).  Local hospital systems will support this bill because it eliminates the true tax that was levied on hospitals in 2017-19.  However, the bill also increases taxes on commercial health insurance policies from 1.5% to 2%.  These taxes will be passed through directly to small business customers.
  • Rent Control will get a Senate vote this week (SB 608).  We expect this bill to pass the Senate as early as Tuesday.  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 legislation is now in full swing (HB 2020). OSCC members got a major boost last week as NW Natural clearly articulated the huge cost increases on their natural gas customers if HB 2020 were to pass.  They gave legislators a handout that showed massive cost impacts to residential, small commercial, and industrial ratepayer.  The invited testimony on HB 2020 will continue on Monday this week. Public testimony kicks off on Friday afternoon at 1:00 PM and is scheduled again on February 18 at 5:00 PM.  OSCC participation will be needed as the public hearings go around the state in the coming weeks.
  • Single use straw ban (SB 90).  This issue seemed to stall as committee members pressed for exemptions from the ‘straw ban’ for convenience stores and drive throughs as well as a local preemption that would prohibit more stringent local regulations.  Environmental advocates oppose carve-outs and appear to now want to let cities and counties move forward with a patchwork of local regulations.  Although SB 90 appears stalled for now, we don’t believe we’ve seen the last of this issue in 2019.
  • Workplace marijuana accommodation (SB 379). In a touch of irony, the proponents for the workplace marijuana accommodation bill were late and almost missed the hearing.  OSCC submitted joint testimony with the general business community in opposition to this measure.  OSCC has an active ACTION ALERT on this issue.  Please contact your senator and ask them to say ‘no’ to SB 379.

Other Key Issues Coming up This Week

  • 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.  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.
  • Liabilities for Employment Discrimination. (SB 726)  Watch out for this bill.  This could be very similar to the wage equity bill of 2017 where it is politically impossible to oppose but will have far-reaching impacts on business. This bill started out as targeting sexual harassment, but has morphed into a general employment discrimination bill that creates a new 7-year statute of limitations and holds officers and principals personally liable for discrimination.  OSCC is monitoring this bill closely as there is lack of agreement on potential impacts.
  • Workplace Marijuana Accommodation.  (HB 2655) This is the House version of SB 379 that would make it an unlawful employment action to condition employment based on refraining from the off-duty use of cannabis.  While the bill contains an exception for jobs where the work cannot be performed while impaired, there is currently no easy test to determine if someone is impaired while at the workplace.  OSCC is opposing this legislation in the Senate because it is a direct affront on an employer’s ability to enforce a workplace drug-free policy.  A hearing is posted on the bill this Tuesday in the House Business and Labor Committee.  We do not expect the House to move its version.

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