Associated Oregon Industries
Oregon’s largest business advocate
As Oregon’s high school graduation rate remains one of the lowest in the nation, the 2016 Legislature focused on a narrow set of issues that directly affect student success.
SB 1537: Creates new limits on 5th year high school programs. The 5th year program allows students who have completed high school graduation requirements to remain in their high school system for an additional year in order to take college classes – usually from a local community college. Funding for tuition comes from the state school fund, so 5th year students can accumulate a significant number of college credits for free.
SB 1537 targets programs to at risk students only, and limits the funding school districts can receive for these programs. Prohibits students who are eligible for the Oregon Promise (free community college tuition) from entering 5th year programs. Directs the Oregon Department of Education (ODE) and the Higher Education Coordinating Commission (HECC) to provide recommendations on a long-term sustainable source of funding for the program. AOI neutral. Bill passed.
HB 4002: Attempts to address Oregon’s longstanding problem with student absenteeism by directing the Department of Education to develop a statewide plan to address chronic absences. Allocates $500,000 to the Chief Education Office to create and fund pilot programs around the state to decrease rates of absenteeism. AOI supported. Bill passed.
HB 4057: Requires the Oregon Department of Education (ODE) to survey school districts about programs and practices that improve student achievement for students living in poverty. ODE is to provide a report to the Legislature about these programs, including costs, in preparation for the 2017 Legislative Session. AOI supported. Bill passed.
The 2016 Legislature’s employment law focus was all about the minimum wage.
Since the end of the 2015 Legislative Session, Democratic leadership (including the Governor), unions, and other advocacy groups have talked about passing an increase in Oregon’s minimum wage in 2016. Although there were other employment-related bills on the table this Session, very few saw the light of day as the minimum wage debate took center stage.
SB 1508: Increases term of Workers’ Compensation Management-Labor Advisory Committee members from two years to three years. AOI supported. Bill failed.
SB 1525: Excludes sick leave pay from definition of “payroll” for purposes of workers’ compensation premium calculations. AOI supported. Bill Failed.
SB 1532A: Minimum Wage Increase; in a broad effort to ensure that a wage increase passed this year, unions and other advocates started the signature gathering process for four separate minimum wage proposals: one to increase the wage to $13.50; one to increase the wage to $13.50 and repeal Oregon’s statewide preemption on local wage increases; one simply to repeal that same statewide preemption; and, one to increase the wage statewide to $15.00.
Simultaneously, these coalitions introduced several bills in the 2016 Legislative process increasing the minimum wage by varying amounts.
Although lawmakers seemed initially reluctant to consider increasing the wage through the legislative process, the Governor’s announcement of her own proposal during January Legislative Days caused a quick turn-around in the Democratic caucus. Members who had professed themselves unwilling to vote for a wage hike were suddenly heard expounding on the benefits of doing so legislatively, so as to minimize the steep increases contained in the ballot measures. Thus began a harried three weeks of negotiations, complete with day and evening public hearings at which literally hundreds of opponents of a wage increase testified against the bills.
Nevertheless, the Democratic leadership and union advocates ultimately prevailed, passing a phased in increase that begins this July and ends in July of 2022. All ballot measure proponents subsequently agreed to stop their signature gathering efforts. AOI opposed. Bill passed.
SB 1581: Amends Paid Sick Time Law; defines employer location as location of headquarters. Limits application of paid leave requirements to employers with 25 or more employees. Excludes seasonal agricultural workers and temporary workers from employee count for purpose of employee threshold. Limits requirements for determination that paid time off (PTO) policy is equivalent to requirements of Paid Sick Time Law. AOI supported. Bill failed.
SB 1587: Wage Theft; provides funding for three additional wage enforcement specialists at the Bureau of Labor and Industries (BOLI), intended to focus on issues of wage under payment and non-payment. Requires employment records to be kept for same length of time as required by FLSA (currently three years). Requires that employee time and pay records be provided to employee on same basis as personnel records. Adds information that must be included on workers’ paystub, which may be provided electronically or by hard copy. Required information is:
- The date of the payment;
- Dates of work covered by the payment;
- Name of the employee;
- Name and business registry number or business identification number;
- Address and telephone number of the employer;
- Rate or rates of pay;
- Whether the employee is paid by the hour, shift, day or week or on a salary, piece or commission basis;
- Gross wages;
- Net wages;
- Amount and purpose of each deduction made during the respective period of service that the payment covers;
- Allowances, if any, claimed as part of minimum wage;
- Unless the employee is paid on a salary basis and is exempt from overtime compensation as established by local, state or federal law, the regular hourly rate or rates of pay, the overtime rate or rates of pay, the number of regular hours worked and pay for those hours, and the number of overtime hours worked and pay for those hours; and
- If the employee is paid a piece rate, the applicable piece rate or rates of pay, the number of pieces completed at each piece rate and the total pay for each rate.
Records retention, provision of time and pay records to employee, and paystub requirements take effect January 1, 2017. AOI supported. Bill passed.
HB 4052: Prohibits employers or insurers from requiring an injured worker to obtain medical services from any specific provider. Requires employer or insurer to provide written notification of treatment rights to injured worker, obtain injured workers’ signature on that notification, and then retain the signed form and provide it to medical treatment providers or insurers as requested. AOI opposed. Bill failed.
HB 4086: Provides extension of unemployment insurance benefits for locked out workers when initial 26 weeks of unemployment insurance are exhausted. Caps extension at 26 additional weeks. AOI opposed. Bill passed.
HB 4088: Prohibits discrimination in employment on the basis of the familial status of employee. Defines “familial status” as the status of being, or having the potential to become, the caretaker of a dependent family member. AOI opposed. Bill failed.
HB 4139: Makes several fixes to Paid Sick Time Law, as follows: allows sick leave to be counted as a fringe benefit for prevailing wage purposes, defines employer location as the location of employer’s headquarters, limits requirements for proving that a paid time off (PTO) policy is substantially equivalent to benefits required by Paid Sick Time Law, excludes joint employers from joint and several liability under the Paid Sick time Law, broadens multiemployer exemption from the law to include employers offering any benefit from joint multiemployer-employee trust or benefit plan. AOI supported. Bill failed.
Environment & Energy
Energy and climate policy discussions and debates dominated the environmental legislative agenda in the 2016 Session. Overall, AOI successfully defeated numerous policy proposals that would have imposed new mandates increasing the cost of doing business in Oregon; including a statewide greenhouse gas emissions cap-and-trade program, market preferences for cardboard pallets, genetic engineering labeling requirements, and more. All of these would have negatively affected many AOI members.
SB 1573: Annexation; eliminates voter approval in annexation, improving flexibility for local governments to responsibly meet growing demand needs. No position. Bill passed.
SB 1574: Cap-and-Trade; the legislation would create a state cap-and-trade program for greenhouse gas emissions. The mandates from the program would cost businesses billions and hurt Oregon’s economy. AOI opposed. Bill failed.
SB 5701: State Budget;
Air Toxics Language: $2.5 million General Fund appropriation to expand DEQ’s current Air Toxics Program. These funds will be dedicated to hiring additional staff and purchasing capital for increased air toxics monitoring. In addition, and most concerning, the language also requests that “DEQ will also use the funding to develop, through rulemaking, an Oregon specific air toxics program that ensures industrial hot spots are sufficiently controlled.”
Climate Change Study: Provides $230,000 in General Fund appropriations to DEQ for the purpose of providing information to the 2017 Legislature on how a market-based carbon reduction system would work in Oregon. The money will be used for employees and to cover costs for an economic consultant to assist with research data and analysis. Public participation on this process is unclear.
HB 4036/SB 1574: Oregon Clean Electricity Plan – Renewable Portfolio Standard (RPS); the bill requires large utilities to eliminate coal-derived electricity from their electric portfolio and invest in a new renewable energy infrastructure. HB 4036 was stalled in the Senate due to procedural issues, and the concept was amended into SB 1547. AOI was neutral. HB 4036 did not pass; SB 1547 passed.
HB 4041: Seed preemption; this legislation would have undermined the seed preemption law and hurt the statewide approach to managing agriculture and risk. AOI opposed. Bill failed.
HB 4079: Affordable housing was a priority for the Speaker this Session. HB 4079 directs the Land Conservation and Development Commission to establish a pilot program for local governments to site and develop affordable housing without utilizing the normal expansion process for urban growth boundaries. No position. Bill passed.
HB 4084: Brownfields Development; grants local communities the option to establish a brownfields cleanup property tax exemption whereby a property certified for cleanup may be granted up to a 10+ year exemption, limited to the actual costs of cleanup and remediation. AOI supported. Bill passed.
HB 4089: Pallets; required state contracting agency to provide in specifications for procurement and in public contract that contractor or supplier must use corrugated cardboard pallets in transporting, distributing, storing or otherwise transferring goods and to require contractors and suppliers to have similar requirements in contracts with common carriers and other third parties. AOI opposed. Bill failed.
HB 4113: Drought Response; establishes a Task Force on Drought Emergency Response to evaluate potential tool to prepare for problems arising from a drought emergency. AOI supported. Bill passed.
HB 4122: GE labeling; after an amendment in the House, the bill would have required genetically-engineered (GE) salmon sold in Oregon to be labeled as such, creating a precedent for the state-by-state labeling of GE foods. AOI opposed. Bill failed.
The looming ballot measure fight over Initiative Petition (IP) 28, the $5.3 billion sales tax on Oregon businesses, was the backdrop of the tax and fiscal policy discussions prior to the February Session.
Coming into the February Session, the biggest question was whether Senate Finance & Revenue Committee chairman Mark Hass (D-Beaverton) would forward a modified tax increase proposal to try and take the momentum out of IP 28. Senator Hass had been seriously advocating for a tax reform proposal centered around a 0.39% Corporate Activities Tax along with the elimination of corporate income taxes and reductions in personal income taxes. Such a proposal would bring in around $500 million per biennium, far short of the unions’ quest for $5 billion.
But the question was: Would there be any takers on such a proposal? And could such a feat be pulled off in a short, 35-day Session?
The answer, as it turned out, was “no.” AOI and other business groups were not interested in negotiating tax reform unless IP 28 was completely withdrawn. Government employee unions did not want to negotiate for lesser tax increases. The discussion and proposal went nowhere. Not even a public hearing. This paved the way for a relatively uneventful 2016 Session with respect to tax and fiscal policy issues.
SB 1507: The 2016 omnibus tax credit bill. The main provision of this bill was to give the film and television industry a 40% increase in available tax credits by 2017. Under SB 1507, the “film and video” tax credit – currently capped at $10 million – will increase to $12 million in 2016 and $14 million in 2017. AOI neutral. Bill passed.
SB 1565: Authorizes city or county to adopt property tax exemptions for newly constructed or installed industrial improvements with cost of initial investment of at least $1 million and up to $25 million. AOI supported. Bill passed.
HB 4025: The annual federal tax law ‘reconnect’ bill went off without a hitch. AOI traditionally supports full reconnection of the Oregon tax code to the federal tax code for ease simplicity of compliance for Oregon business taxpayers. AOI supported. Bill passed.
HB 4026: AOI paid close attention to this bill because proposed amendments would have switched Oregon from “cost of performance” taxation to “market based” taxation for services and intangibles. The effect of the amendment would have largely been to export Oregon’s tax burden to out-of-state companies. Although this policy change may, in fact, be good policy for Oregon-based companies, it was widely seen as an overt political attempt to quell criticism and opposition to Initiative Petition 28 from Oregon’s robust software industry. Bill failed.
HB 4027: This bill directed the Legislative Revenue Officer to submit a report addressing selected tax expenditures to the Legislative Assembly and to make recommendations for systematic review and sunset of certain tax expenditures. AOI is highly skeptical of this legislative concept as a tool to eliminate current tax deductions. AOI opposed. Bill failed.
HB 4035: Corporate Tax Disclosure. AOI has historically opposed all iterations of public corporate tax disclosure, and HB 4035 was no exception. The bill required the Department of Revenue to submit to the Legislative Revenue Office information from Oregon corporate tax returns including Oregon sales, taxable income, tax credits claimed, and Oregon tax liability. AOI opposed. Bill failed.
HB 4072: AOI supported this bill to extend the sunset for the university venture development fund contribution tax credit. AOI supported. Bill passed.
HB 4084: A good piece of legislation that authorizes local governments to adopt property tax incentive programs that grant special assessment for brownfield clean up or redevelopment. AOI supported. Bill passed.
HB 4146: A big priority of Oregon’s restaurant and lodging industries, HB 4146 raised the state transient room tax from 1% to 1.8% until 2020. The rate then lowers to 1.5% starting in 2020. The bill is intended to raise nearly $30 million per biennium to boost state and local tourism promotion and marketing efforts, particularly in advance of the 2021 World Track & Field Championships which will be held in Eugene. In addition to the Oregon Restaurant and Lodging Association, the bill was also supported by Nike, the US Olympic Committee, USA Track & Field, and Track Town USA. Bill passed.
As Oregon faces looming budget shortfalls in Medicaid and pension benefits, the 2016 Legislature took a narrowly focused approach to health care policy this Session. Health care bills attempted to address public health concerns by providing housing vouchers for the disabled as they wait for federal benefits, establishing a health insurance assistance program for impoverished Pacific Islanders, and implementation of workgroup recommendations around the Basic Health Plan.
HB 4017: Basic Health Plan (BHP); in 2015, the Legislative Assembly enacted HB 2934 directing the Oregon Health Authority (OHA) to convene a stakeholder advisory group to examine key policy issues relating to the federal BHP in the context of Oregon’s health care system. The BHP is a health coverage option for individuals with incomes between 138% and 200% of the federal poverty level (FPL) and individuals from 0-200% FPL who are lawfully present in the United States but do not qualify for Medicaid due to immigration status.
HB 4017 is the result of that stakeholder group’s work. The bill’s final iteration gives the Department of Consumer & Business Services the authority to develop plans for insurance waivers and update data for implementing the BHP insurance regulations.
The new data provides information that may cause the Legislature to approve a new set of health plans that provide coverage to an estimated 15,000 uninsured legal immigrants and for 85,000 working-class adults who are unable to afford insurance. Health plans would be sold on the health insurance marketplace, either through private carriers or CCOs that handle Medicaid patients.
The BHP has the potential to seriously destabilize the individual health insurance marketplace in Oregon, as it could absorb up to 42% of those currently enrolled on the exchange who are receiving federal subsidies. AOI opposed. Bill passed.
Investments in transportation infrastructure are critically important for Oregon businesses and citizens. That is why Representative John Davis (R-Wilsonville) introduced a bill that would have raised revenue to invest in Oregon’s infrastructure and meet federal grant matching funding requirements. Instead, political leadership did not support passing a transportation bill and the legislation died a very quiet death. Nevertheless, AOI expects a renewed conversation regarding transportation infrastructure in the 2017 Legislative Session.
HB 4055: Transportation Legislation; required Environmental Quality Commission (EQC) to adopt by rule low carbon fuel blending analysis standard and required the EQC and State Department of Agriculture to annually determine application of benchmarks based on commercial availability of low carbon intensity fuels. In addition, the proposal would have increased tax on motor vehicle fuel and aircraft fuel, and would have increased vehicle registration and title fees to fund Oregon’s declining transportation infrastructure. The bill failed to get a hearing. AOI supported. Bill failed.
SB 1510: Natural Gas Vehicles; provides limited exemption from maximum vehicle weight limitations if vehicle uses natural gas as its fuel source. No position. Died in committee.
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