Legislative Business Update week 2

By Oregon Business & Industry

Week two of the legislative session is complete. Today, Feb. 19, is the first major deadline. By the end of the day, bills must be passed by policy committees in their chambers of origin. While this deadline doesn’t apply to bills in the revenue committees, the joint budget-writing committee, and a few others, it is a significant milestone in the session. Bills with any sort of cost attached to them will go to the Joint Ways and Means Committee, others will go straight to the House or Senate floor, and many will simply die. The field narrows.

Leave Alignment

A bill that would alleviate the stacking of leave under a pair of overlapping programs (paid family and medical leave and the Oregon Family Leave Act) passed the Senate last week on a strongly bipartisan vote. After much negotiation, OBI supports SB 1515, which will make the state’s leave programs more workable for employers and less confusing for employees.

CAT Exemptions

OBI testified last week in support of SB 1542, which would raise the corporate activity tax exemption level from $1 million to $5 million. The bill also would also allow medical and dental providers to exclude Medicare and Medicaid reimbursements from taxable revenue for CAT purposes. While the $1 million exemption almost certainly will not be raised this session, OBI is pleased that Sen. Mark Meek, D-Gladstone, chair of the Senate Revenue Committee, is continuing a conversation that began last session. There is growing awareness that the $1million level is too low and places an extraordinary burden on many Oregon businesses. Meanwhile, an adjustment to the exemption threshold can easily be “paid for” by higher-than-expected CAT returns. OBI does not support the position held by some legislators that the exemption level can be adjusted only if collections from those above $5 million increase by a corresponding amount. That is a false premise. OBI will continue to work on this during the 2025 legislative session as part of our Growth and Innovation Roadmap.

Housing Bill

The governor’s signature housing bill, SB 1537, was voted unanimously out of the Senate Committee on Housing and Development last week. Adopted amendments reduced the package’s price tag by $150 million and scaled back the total acreage that cities could pull into their urban growth boundaries. Although OBI was disappointed to see the UGB acreage shrink, that this was a necessary compromise to keep the bill moving forward. The policy package still would be a positive step in addressing housing cost and supply issues, including long-term workforce housing challenges. OBI offered testimony Feb. in support of the bill, which is now in the Joint Ways and Means Committee.

Bonus Bill

Once again, the Legislature failed to pass a bill giving Oregon employers tools used by employers in other states to recruit and retain workers. The House Committee on Business and Labor failed to advance HB 4050 despite the need demonstrated by Oregon’s public and private employers and bipartisan, bicameral support within the Legislature. The bill would have made it easier for Oregon employers to offer incentives such as hiring and retention bonuses when justified by a “business necessity.” The committee chair said he plans to have an interim workgroup tackle this issue.

Offshore Wind

The House Committee on Business and Labor narrowly passed HB 4080 last week. HB 4080 would place extremely strict labor standards on offshore wind projects in Oregon’s territorial waters. HB 4080 would reduce Oregon’s attractiveness for large-scale projects funded through the Inflation Reduction Act, likely benefiting Washington and California instead. OBI and allied groups will make that point to the Joint Committee on Ways and Means in the hope of amending the bill.

Transportation Funding

On Feb. 20, the Joint Transportation Committee will hear three bills (HB 4165, SB 1519 and SB 1543) aimed at addressing the disproportionate cost freight users bear as a result of the current weight-mile tax. Oregon’s Constitution requires that revenues from each vehicle class be proportional to their impact on the transportation system. For several biennia, as reported by the state itself, freight users have been paying more than their fair share relative to passenger vehicles. The latest report from the state economist indicates that heavy-duty trucks overpay by 32%. At the same time, state highway trust fund revenue is failing to keep pace with basic preservation and maintenance of the highway system. This is a critical issue that needs to be fixed, but it is unlikely that we will see the will to address rebalancing the cost allocation or the revenue shortfall this session, which means a solution will most likely be pushed to the 2025 transportation package. OBI will testify in support of the bill concepts and the need to fix this problem.

Daylight Savings

Last week, the Senate Committee on Veterans, Emergency Management, Federal and World Affairs passed SB 1548 unanimously. The bill will head to the full Senate for a vote this week. It would keep standard time in Oregon year-round, beginning in November of this year. It’s not an OBI priority, but we will provide updates if the bill progresses through the House as well.

Emissions Bill

SB 1559, which would have set more aggressive state greenhouse gas reduction goals, did not make the deadline for a committee vote and is dead this session. The bill would have established a goal of reducing emissions to 95% below 1990 levels by 2050 with interim goals in 2030 and 2040. OBI and partner organizations worked this bill extensively in the interim, arguing that additional emissions regulation should be part of a more comprehensive conversation for the 2025 legislative session rather than a rushed conversation in the short session. OBI planned to testify in opposition to the bill, but time in that hearing ran out. Unfortunately, much of the testimony offered implied that Oregon is behind in addressing emissions, disregarding the reality that Oregon has an aggressive goal (reducing emissions to 80% below 1990 levels by 2050) and has dozens of programs aimed at achieving these goals, which are listed in the testimony OBI filed for the record.

Health Mandates

HB 4091 would establish the Health Insurance Mandate Advisory Review Committee, which would allow stakeholders to review proposed health insurance mandates and report their findings to the full Legislature prior to the next session. Currently, proposed mandates are considered on a one-off basis without a comprehensive review of their efficacy, costs and impacts on consumers, providers and payers. The establishment of such a committee continues to be priority for OBI (read our comments in support). The House Committee on Behavioral Health and Health Care referred HB 4091 to the Joint Ways and Means on Feb. 14. A similar bill failed last session largely because of the substantial cost attached to it. The fiscal impact of HB 4091 is slightly smaller than last year, and OBI hopes that enthusiastic bicameral and bipartisan support will help it cross the finish line this year.

Seismic Bill

HB 4044, which would study risk from inhaling hazardous airborne chemicals in the event of a major earthquake, was moved out of committee and is awaiting action in the Joint Ways and Means Committee. OBI testified in opposition to the bill in the session’s first week, noting that the U.S. Environmental Protection Agency already regulates facilities that could release hazardous substances under similar circumstances. OBI has had productive conversations with the committee chair and will continue to engage with her and Gov. Kotek’s staff about this bill.

Taxpayer Confidentiality

HB 4031 is scheduled for a public hearing on Feb. 21 in the House Revenue Committee, at OBI’s request. The bill is a placeholder that will contain language clarifying that taxpayer information must be treated confidentially at the local level. While OBI believes that state and federal law prohibit the disclosure of local tax information, we are pursuing clarification in statute in response to a recent public records request for local taxpayer information. Members of both the House and Senate revenue committees are aware of the importance of this legislation and are supportive.

Canola Bill

HB 4059 was moved out of committee Feb. 15. The bill would limit production of both genetically engineered brassica seed and non-GE brassica seed, used for canola oil production. Since the bill’s requirements go beyond recommendations from the Oregon Department of Agriculture and are not supported by extensive research conducted at Oregon State University, this bill appears to be driven by anti-GE politics rather than a desire for reasonable agriculture policy. OBI submitted testimony for the record and signed onto a logo letter opposing the bill.

Property Tax

Last week, the House Rules Committee heard HJR 201, a constitutional referral to voters that would create a statewide taxing authority in Oregon and a $0.25 per $1,000 property tax. The tax would apply to all real property and all personal property, tangible or intangible, located within the state. Proceeds would fund “public safety,” which is not defined in the resolution. Of course, OBI supports robust and effective public safety, but this is an ill-defined proposal that addresses an issue better suited to budget writers. No action on the resolution is expected, but OBI will watch it closely. Notably, at last count, approximately 1,400 pieces of testimony opposing the proposal were submitted. That’s an astounding number. Only eight were submitted in support of the measure, with four from the resolution’s sponsor.