We are now done with the first week of the 2020 session. There are four weeks to go before the constitutional end date of March 8th. It was an extraordinarily busy week as most bills were scheduled for hearing or some sort of consideration.
Some observations of the first week: (1) Senate President Courtney has a serious health condition and is not certain to be in the capitol. This could have major implications on key votes and also has major implications for key negotiations, (2) relationships are already showing signs of strain, and (3) the Timber Unity rally on Thursday was impactful and emboldened Republican lawmakers in their strong stance on Cap & Trade legislation.
Friday was the first significant deadline of session. If a bill was not scheduled for further consideration by Friday evening, then that bill is considered dead. Unfortunately, this only claimed about 20 of the 250 bills that were introduced. Legislative leadership has become very proficient at maneuvering bills to keep potential agenda items alive until the very end. However, one key bill opposed by OSCC has died (see below).
OSCC had a very busy week with its priorities.
As of today, we believe our biggest threat is House Bill 4010, which would effectively eliminate all state incentives for Opportunity Zones. Democrats in the House appear poised to eliminate them. Bottom line: If you care about Opportunity Zones, you'd better say something.
Here's a rundown of key OSCC Issues:
Ø Cap-and-Trade (SB 1530). Carbon cap-and-trade was the theme of the first week of session. The Senate President's office introduced SB 1530, which includes several changes from the failed HB 2020. First, it attempts (although unsuccessfully) to phase in the fuels tax, initially in the Portland Metro area and then in cities that store 10 million or more gallons of fuel. It's a surprisingly large number of cities. Second, the bill gives trade exposed natural gas users (certain manufacturers and farmers) 100% rate relief for the first three years of the program. After 2025, these manufacturers must conduct an energy system management audit and make any state-required energy efficiency investments in order to qualify for bill credits. Homes that use natural gas will see a 7% increase in their rates in 2022, and most propane users receive no protection from rate impacts due to cap-and-trade.
We are expecting SB 1530 to pass the Senate Environment & Natural Resources Committee this week and be sent to the Ways & Means Committee. At this time, Senate Republicans have signaled their intention to leave the capitol in order to block passage of this bill, but negotiations are ongoing. Some Senate Democrats do not appear to be willing to blow up the session over Cap & Trade. Senate President Courtney's absence also has implications here.
Ø Statewide Lodging Tax legislation (HB 4047) will make permanent the 1.8% statewide lodging tax rate that was passed in 2016. The rate was scheduled to be reduced to 1.5% this year, but in order to lock in the higher rate for statewide tourism promotion instead of other unrelated objectives, the Oregon Restaurant & Lodging Association agreed to keep the rate at 1.8% so long as the money is dedicated to tourism promotion. OSCC testified in support of this bill Tuesday evening in the House Revenue Committee and will lobby legislators on it.
Ø Unemployment Benefits for Striking Employees (HB 4007). On Wednesday, the House Committee on Business & Labor will hold a public hearing and possible work session on HB 4007. HB 4007 upends Oregon law and ensures that striking employees are not disqualified from receiving unemployment. Most states do not allow workers on strike to collect unemployment benefits, including Oregon. Were HB 4007 to pass, it would levy significant costs on Oregon's public and private employers. OSCC strongly opposes this legislation.
Ø Real Estate Transfer Taxes (HJR 203). We've seen no activity on this measure which would repeal Oregon's ban on real estate transfer taxes.
Other Key Issues Coming Up This Week
Ø Technical Assistance for Employers (HB 4087). Last week, OSCC joined our local chambers in support of HB 4087. This bill would transfer civil penalty reserves to fund technical assistance for employers in Eastern Oregon and the free online publication of BOLI technical assistance and compliance manuals. OSCC supported the -1 amendment, and the business community worked with Commissioner Hoyle last week on sideboards to ensure that there isn't an incentive to increase penalties in the future. HB 4087 is scheduled for a work session to move the bill out of committee with amendments on Monday.
Ø Interfering with Non-Competes (SB 1527). This week, business and labor representatives sat down to negotiate a reasonable compromise to noncompete agreement legislation. Our biggest concern with SB 1527 was the dramatic shift in enforceability of an agreement from 18 months under existing law to only 6 months. There will likely be a middle ground at 12 months.
Ø Eliminating Opportunity Zones (HB 4010). OSCC joined cities and other economic development proponents on Wednesday night to testify in opposition to HB 4010, which would disconnect Oregon from the federal Opportunity Zone tax incentive that included in the federal 'Tax Cut and Jobs Act' passed by Congress in 2017. We've heard from many of our local chambers about the importance of maintaining Opportunity Zones as a tool to support local economic development. We view this as our biggest threat to date. If you want to preserve Opportunity Zones in your community, you need to speak up and send your testimony to: firstname.lastname@example.org
Ø BOLI Screening of Employers/Employees (HB 4113). OSCC testified in opposition to HB 4113, which would require BOLI screening of all employers - and all employees - if there are minors employed in the workplace. The legislation appeared well intended - to protect minors from sex offenders or other criminals in the workplace - but OSCC testified that employers no longer have the tools to screen employees for criminal background and that it was unfair to subject employers to civil penalties and lawsuits if they themselves have no ability to screen employees for criminal backgrounds. OSCC is expecting an amendment this week from BOLI to address our concerns.
Casualties of the first deadline:
Ø Prevailing Wage Requirements in Economic Development Zones (HB 4045). HB 4045 died in committee on Friday. HB 4045 imposed public procurement requirements on projects within enterprise zones, strategic investment zones, and renewable energy investment zones; specifically, the requirement to pay prevailing wages. Requiring prevailing wage rates on private construction projects offsets the very local economic development incentives provided by tax abatements. This bill would have jeopardized future economic development projects.