What's Happening (OSCC Political Observations)
Negotiations are underway on what a "go home" package of legislation would be for legislative Democrats who hold strong majorities in the legislature.
Legislative leadership appears to be signaling to the business community that they will pass:
- HB 3427, the $2 billion gross receipts tax on businesses with $1 million or more in sales. The details of the tax are still in discussion.
- An undefined PERS reform proposal.
- A paid family leave proposal that would require both employers and workers to pay new taxes.
- A buy down of PERS liabilities that would include about a $300 million contribution from SAIF.
- An amended version of Cap and Trade (HB 2020).
The one concession that leadership appears to be willing to make is to kill HB 2269, the employer health care tax. It is unclear at this point which policy bills will get wrapped up in the negotiation.
Activity on Major Issues
- The $2 billion Commercial Activity Tax (HB 3427) is now clearly the top priority of legislative leadership. Although there was a serious effort to pass the bill out of committee on Thursday evening, the bill ultimately did not move.
Absent any real movement on negotiations with democrat leadership in the House and Senate, the bill is slated to move out of committee on Monday night.
As it stands, HB 3427 has the following components:
- A gross receipts tax rate of 0.49% on Oregon sales over $1 million;
- A 25% deduction from taxable sales for labor OR business inputs, whichever is higher;
- An exemption for receipts from sales to a wholesaler or ag cooperative for any sales outside of Oregon; and
- An exemption for groceries (defined as those that qualify for 'SNAP').
- Cap-and-Trade (HB 2020). The Joint Committee on Carbon Reduction is scheduled to resume its work again this week with two meetings (Monday and Friday) to consider new amendments to HB 2020, the Cap-and-Trade bill. OSCC anticipates that amendments will be released Monday for consideration by the committee. We will keep you updated after we've had a chance to review changes in the amendments. The rumor is that there will be a serious attempt to pass HB 2020 out of committee right as early as next week (the week of May 6th).
What happened last week?
- Employer Health Care Tax (HB 2269A). Last Monday, OSCC joined Oregon Business & Industry, Oregon Farm Bureau, and the Northwest Grocers in testifying in opposition to HB 2269A. This bill would require employers with 50 or more employees (who work at least 8 hours a week) to provide a minimum payment towards the employees' health care or pay the state the difference. Although it's not being called a "tax", the Oregon Health Authority is projecting $0.50 per hour worked per employee and a total revenue generation of $500 million.
- Sexual Harassment (SB 726A). SB 726A passed out of the Senate with a 23-6 vote. Individual liability for owners, officers and executives (who knew or should have known about the alleged harassment) remains out of the bill, but there are still concerns about the ability of small businesses to maintain records and data for the new 5-year statute of limitations to file harassment claims. Under the bill, employers are prohibited from using non-disclosure agreements as a means to settle harassment claims.
- Pregnancy Accommodations (HB 2341A). HB 2341A moved out of the Senate Workforce Committee last week. As written, employers with 6+ employees must provide reasonable accommodations for pregnant employees, but any of those businesses may file an undue hardship exemption with BOLI. Easy final passage is expected on Senate floor.
- Expressing Milk in the Workplace (HB 2593A). Under HB 2593A, all employers must provide reasonable rest periods for an employee to express milk during a child's first 18 months. However, an employer with 10 or fewer employees may file an undue hardship exemption with BOLI. The next stop is the Senate floor for final passage.
Other key issues coming up this week.
The upcoming week is going to be fairly quiet on key issues. There will be no additional hearings on Cap and Trade this week, but there will be consideration of the following:
- Prevailing wages in enterprise zones. HB 2408 requires prevailing wages on all private projects in Enterprise Zones in excess of $20 million. Such a policy erodes one of Oregon's last remaining economic development tools. The bill easily passed the House and is already up for a public hearing in the Senate Workforce Committee on Tuesday. OSCC will issue an Action Alert on this critical economic development issue.
- Workers' compensation compromise. (HB 3022) OSCC initially testified against this legislation, which would have upended 30-years of successful workers' compensation reforms and drastically raised workers' comp costs on employers. However, the bill was deftly negotiated by SAIF so as to end up a compromise bill that won't impact employer rates. The bill will see committee action in the House Rules Committee on Monday.
