Business Bills update

Policy and Rulemaking Updates

Disconnect bill passing: SB 1507 has passed the full Senate on a 17-13 vote with Sen. Mark Meek, D-Oregon City, voting with Republicans in opposition. The bill would disconnect Oregon’s tax code from the provisions of H.R. 1 promising businesses accelerated depreciation of equipment and machinery along with a Clinton-era provision meant to encourage investment in startups. The House Committee on Revenue promptly rubber-stamped the bill, voting it out of committee one day after holding a hearing in which stakeholders received only two minutes to make their case and committee members were unable to ask questions. During the hearing, OBI asked the committee to consider making the bonus-depreciation disconnection temporary in order to provide certainty for businesses investing in Oregon. The committee disregarded the request. The full House is likely to consider the bill on Feb. 24. OBI will continue to fight this bill while also working toward a possible sunset.

Insurance bill dies: On Feb. 18, HB 4098, which would allow private rights of action against insurance companies under Oregon’s Unlawful Trade Practices Act, failed to pass the full House. A procedural motion kept the bill alive temporarily. But it died on Feb. 19, when House leaders conceded that it lacked the votes to pass. Its passage would have created the most punitive insurance regulatory scheme in the nation, increasing litigation, raising prices for Oregonians and prompting insurers to leave the market.

Oregon JOBS Act: SB 1586, the Oregon JOBS Act, had two public hearings last week, and a third is scheduled to happen Feb. 23. Legislators from both parties have testified in support, but the bill’s prospects remain uncertain due to Democratic reluctance to address land limitations in Oregon’s Silicon Forest. SB 1586 is the only bill this session that specifically targets Oregon’s ongoing manufacturing recession, and the reluctance of some legislators to support it is disappointing.

Governor’s development bill: HB 4084, Gov. Kotek’s economic development bill, has been heard and worked in the House Committee on Revenue. The bill would improve Oregon’s enterprise zone program, invest $40 million in industrial land and provide targeted regulatory and permitting process improvement. Sen. Khan Pham, D-Portland, submitted an amendment to prevent enterprise zones from being used for data centers in rural Oregon. Fortunately, that amendment was not entertained. The bill now moves to the Joint Ways and Means Committee and remains in play for the end of session.

Transportation referendum bill: The clock is ticking on Democratic leaders’ effort to change the date of the transportation referendum election from November to May, SB 1599. According to the secretary of state’s office, Gov. Kotek must sign the bill by Feb. 25 for the referendum to appear on the May primary ballot. The Senate has repeatedly delayed a vote on the bill amid rumors that it may not have enough support among Democrats to advance. Sen. Mark Meek, D-Oregon City, has indicated he will vote no. OBI remains opposed to the bill because it contains language that erodes citizens’ rights by removing a critical procedural step in the ballot title drafting process: the ability to appeal draft ballot titles to the Oregon Supreme Court for review.

Kitzhaber affordability roadmap: On Feb. 19, the House Rules Committee held a public hearing on HCR 202, a resolution that sets a goal of a more affordable and accessible state health care system by 2033. The resolution is part of a broader effort by former Gov. John Kitzhaber and the Health System Sustainability Group to evaluate several aspects of the state’s health care landscape, including Oregon’s Medicaid program, provider systems, and health care sector business climate. Democratic leadership could take a page out of the Kitzhaber playbook and acknowledge that Oregon’s difficult regulatory environment and poor business climate drive up health care costs. OBI has provided testimony in support of Kitzhaber’s resolution, which can be found here.

Advance notice bill: HB 4021 would require advance notice of regulatory changes before they become effective. The intent is to provide adequate notice to businesses and other regulated entities so they can prepare for new compliance obligations. The bill passed the House and has been referred to the Senate Rules Committee. This concept is part of OBI’s Oregon Competitiveness Agenda, and OBI testified in support.

Tax bills: The House Revenue Committee has passed a handful of bills that would raise taxes, and two of them would affect the state’s lodging industry. HB 4134 would increase the statewide transient lodging tax and dedicate new revenue to wildlife preservation. HB 4148 would change transient lodging tax revenue allocations, giving some funds currently protected for local tourism activity to local general funds. Both are now before the full House for consideration, and both upend a decades-old industry compromise with state and local governments regarding the allocation of transient lodging tax revenue. The committee also passed HB 4014, which as amended would study how Oregon attaches to federal provisions on international taxation. Testimony in support of that amendment made it clear the task force is nothing more than a procedural step toward a substantial increase in business taxes. The bill now heads to the Joint Committee on Ways and Means, where OBI is working as part of a coalition to kill it.

Recreational liability bills: The Legislature appears reluctant to fix Oregon’s outlier status with respect to the validity of liability waivers for recreational businesses. The Senate Committee on Commerce and General Government has unanimously passed SB 1593, which would overrule an extreme Oregon Supreme Court decision that invalidated liability waivers for recreational activities throughout the state. A bill with this level of bipartisan committee support should move through the legislative process, but Senate President Rob Wagner, D-Lake Oswego, is using his authority to hold it. Meanwhile, the full Senate is scheduled to consider a deeply flawed bill, SB 1517. It borrows general protections from SB 1593 but includes many exemptions that make those protections largely unusable. OBI and Oregon’s outdoor recreation industry coalition support SB 1593 and oppose SB 1517.

Wage claim penalties: As introduced, HB 4089 would make failure to pay wages subject to criminal penalties as well as current remedies through the Bureau of Labor and Industries and the courts. An amendment adopted by the House Labor and Workforce Development committee tempered the bill significantly. The amended bill clarifies the existing crime of theft of services to include intentionally failing to pay full or partial wages. The remaining portions of the bill focus on construction labor contractors and would impose new liability for contractors who use unlicensed labor contractors. The bill is now in the House Rules Committee, where it is scheduled for a hearing and committee vote on Feb. 24.

Immigration retaliation: HB 4111 was intended to prohibit discrimination or retaliation against employees for updating certain information, including name, Social Security number and employment authorization documentation. OBI negotiated changes that protect employers from unlawful practice claims if, for example, employers must act in response to federal employment authorization requirements. The bill passed the House 34-19 and is scheduled for a hearing and committee vote in the Senate Judiciary Committee.