Dear OSCC Members and Colleagues - 

Here's a Week 16 recap of key issues in the Oregon legislature.

The biggest issue of Week 16 was the release of the May revenue forecast, which historically has signaled the 'home stretch' of the legislative session. The reason the May forecast is so important is because it informs the legislature of the amount of money it will have to budget for the upcoming 2-year budget cycle.

The May 2017 forecast was sensational. In all, it produced $600 million in added revenues, BUT it also produced a $400 million personal "kicker" rebate due to revenues coming in too high. So on balance, the legislature will net an additional $187 million for the upcoming 2017-19 budget cycle.

To remind members of the budget context of this session - when the legislature convened in February, it assumed it had a $1.8 billion budget deficit. Then the February forecast produced an extra $200 million, meaning that the budget deficit had shrunk to $1.6 billion. Now the budget deficit is reduced further to just over $1.4 billion.

This has created an interesting dynamic in which Democrats argue that they need new revenue in order to justify passing reduced budgets or passing cost-savings proposals. Democrats don't have the votes to pass budgets that cut programs and Republicans certainly won't help them. In addition, Republicans will not help Democrats pass tax increases, either. They argue that there is no need to pass revenue enhancements when the state is bringing in record amounts of revenue.

It is getting increasingly difficult to see how the legislature passes a balanced budget and adjourns. People are starting to talk about special sessions as if it's a foregone conclusion.

Key Labor Bills 

BOLI Overtime Fix: SB 984 fixes BOLI's bad interpretation on daily/weekly overtime pay and passed the Senate unanimously. But as of now, it appears that the House is prepared to kill this bill and replace it with HB 3458, which includes all the elements of SB 984 that manufacturing employers need but also includes some seriously harmful provisions, including a hard cap on hours that an employee may work at 60/hrs per week. As of now, OSCC believes this could have a severely damaging effect on food producers and will oppose the bill. However, if OSCC is successful in deleting the 60/hr week workweek cap, we will support the bill.

Predictive Scheduling: SB 828 implements predictive scheduling for food service, retail and hospitality businesses. As part of the bill, business is seeking a total, permanent statewide ban on local scheduling mandates. Unions are coalescing to try and pass this bill as it is their last major opportunity to pass 'pro-worker' legislation. The bill is dormant - for now. OSCC expects that this will become a major issue in the waning days of session. Some business groups are now seeking to pass the bill if it contains a total statewide preemption on local government scheduling ordinances.

Union Organizing & Sick Leave Penalties: OSCC is working to kill a bad bill - HB 2856 - which creates a Community Outreach and Labor Education Program within BOLI to promote awareness of employee rights. The bill takes $2 million of employer-paid money (Wage Security Fund) to fund union organizing efforts. In addition, the bill also adds punitive damages to Oregon's paid sick leave mandate. OSCC is actively working to oppose this bill in the Ways & Means Committee. We do believe we'll be successful in defeating this bill.

Environmental Regulation 

Cleaner Air Oregon: The big bill here is HB 2269, which would increase Title V and ACDP fees to fund the new DEQ 'Cleaner Air Oregon' regulatory scheme. OSCC testified in opposition to HB 2269 last week in the Ways & Means Natural Resources subcommittee. It will receive another public hearing this week. We do anticipate this will be the major environmental fight of the session.

OSCC can have an impact on this issue. Special thanks to the Springfield Chamber for working with the City of Springfield to testify and to the Klamath County Chamber who submitted a letter in opposition, which you can view here. OSCC encourages Chambers to send letters testifying against this bill to the Joint Ways and Means Subcommittee on Natural Resources jwmnr.exhibits@oregonlegislature.gov with customized information on how this bill will effect your members. Testimony must be submitted by Wednesday May 24th at 12pm. Talking points on HB 2269 are provided here.

Diesel engine regulations: SB 1008 popped up again and is the subject of new negotiations. As it stands now, the bill simply requires the state to do an inventory of all off-road diesel engines in Oregon. OSCC believes it is premature to engage in diesel engine regulation without taking inventory of off-road engines in use throughout the state. But environmental proponents are hoping to score some kind of win with diesel engines, so the bill is undergoing 11th hour discussion and negotiation. OSCC is actively engaged in this issue.

Liability

Liability Costs / Damage Awards: We received notice late Friday that the trial lawyers would take yet another stab - their third - at trying to increase damage awards for negligence and personal injury lawsuits. It appears that having been defeated with SB 487, then SB 737, the trial lawyers will try and stuff their amendments into HB 2807 this week. This is a perfect case-in-point on why organizations need to stay vigilant until the final gavel drops. The bill is designed to pierce policy limits and force companies to settle out of court even on marginal claims.

Tourism

The battle over the use of TRT funds is picking up steam in the House Revenue Committee. As anticipated, HB 2064 was unveiled last week with several amendments that would change current parameters around use of TRT funds. The
-1 amendments would allow TRT dollars to be spent on an expanded list of tourism-related expenditures not related to tourism promotion. The -2 amendments would increase local government share of future TRT revenues to 50 percent (currently it's locked in at 30 percent). But at the end of the hearing, the committee did not adopt any amendments or take action on the bill.

OSCC will keep close watch on this issue as it develops.

Business Taxes 

OSCC is actively engaged in the business tax reform discussion with Senator Mark Hass. There are several competing proposals to reform business taxes, all of which contemplate a new Gross Receipts Tax (GRT). The GRT discussion is inching along. Despite assertions in the Oregonian that a compromise deal is in the works, it still remains a faraway possibility. 

The progressive Democrats oppose Hass' plan because it raises far too little in revenue. The Republicans have no intention of voting for tax increases when revenue is streaming into the state (see revenue forecast discussion above).

OSCC wants to emphasize that these discussions are extremely fluid and there is nothing set in stone.  Any GRT proposal at this stage would be predicated on budget cuts/government efficiencies that are not materializing at this point. 

Other tax legislation of concern includes HB 2067, which blacklists certain countries as 'tax havens' and increases tax burden on companies with Oregon affiliates located in these tax havens, and HB 2019, which requires the public disclosure of Oregon sales and Oregon taxes of any company that avails itself of at least $1,000 in Oregon tax credits. OSCC joins its business association partners in opposition to these bills.

Government Cost Savings

OSCC sees no progress to-date on PERS reform, health care cost savings, state hiring freezes, etc. Proposals and ideas are being tossed around loosely but there has been absolutely no concrete policy development or leadership around any of these ideas.  

Alison Hart, Executive Director
alisonh@oregonchamber.org
503-231-5421

JL Wilson, Legislative Counsel
jlwilson@pacounsel.org
503-363-2182