Dear OSCC members and colleagues -

What's Happening (OSCC Political Observations)

The next two-and-a-half weeks will be the toughest weeks of the session.

Looming deadlines mean that all 3,000 of the bills currently introduced will be in play as advocates rush to meet deadlines that mean life or death for their legislation.

Bills need to be posted for committee votes by the end of Friday, March 29th in order to receive further consideration. By Tuesday, April 9th, all bills need to be voted out of their original committee in order to survive.

This means there will be a litany of surprise hearings and committee votes on relevant bills all over the capitol that will be largely impossible to track and influence in real time, but we're going to give it our best effort!

Activity on Major Issues

• PAID FAMILY LEAVE HEARINGS! This evening, March 25th, the House Business & Labor Committee and Senate Workforce Committee plan to host a joint public hearing on paid family & medical leave bills that would SIGNIFICANTLY alter Oregon's business climate.
  
  Here's a look at the proposals and the impractical requirements they put on all businesses that will cost Oregonians billions!

HB 3031

·        Applies to employers with 1+ employees

·        Mandates 32 weeks of paid and protected family and medical leave each year

·        Creates state-run family insurance program administered by DCBS

·        Establishes new payroll tax of up to 1% to pay for the family-leave insurance:

SB 947

·        Expands OFLA eligibility to 1+ employees

·        Mandates 24 weeks of paid and protected family leave AND an additional 24 weeks of protected family and medical leave for some types of leave each year - total leave could be 48 weeks!

·        Requires employer to pay 100% of employee wages while employee is on paid leave

OSCC will argue that Oregon's small businesses are still scrambling to comply with the state's minimum wage increases, paid sick leave law and the new equal pay law.  Now is NOT the time pass 'Cadillac' family and medical leave proposals that would further burden local businesses. 

Proponents for these bills are planning to turn out hundreds of people on Monday evening.  We need your help to show that Oregon employers have had enough and can't bear the costs of these workplace mandates!  Please plan on attending Monday's hearing AND sending a letter to legislators about your opposition to HB 3031 and SB 947.

Email your legislators AND send personalized comments to the committees using the suggested talking points below. Check out the Oregon State Chamber of Commerce Advocacy Book for help with writing your testimony.

Chair Jeff Barker, House Business & Labor Committee: hbl.exhibits@oregonlegislature.gov

Chair Kathleen Taylor, Senate Workforce Committee: swf.exhibits@oregonlegislature.gov

• Cap & Trade. (HB 2020) On Monday evening, the Joint Committee on Carbon Reduction will unveil a total re-write of HB 2020, the 'Cap & Trade' bill. We are not optimistic that the legislation will be improved to reduce impacts on the manufacturing sector. Our Friday meeting with the Governor's staff was largely discouraging and showed that the Governor's office is not serious about stemming cost impacts and job loss in the manufacturing sector. OSCC will keep all chambers up to speed as we analyze the new version of the bill. 

• Business Tax Increase. We expect that Democratic leadership is leaning toward selecting a Commercial Activity Tax, which is a pure gross receipts tax, as the basis for implementing a new business tax to add more than $2 billion in revenue into the state's K-12 system. Breaking news...it appears that the business community is beginning to organize in opposition to the developing tax proposal. Several of OSCC's partner business organizations are signing on to a letter to stage their opposition to a new gross receipts tax.

Other Key Issues Coming up This Week

• Lawsuit Damages. (HB 2014) The House will vote on this bill Monday. HB 2014 would repeal Oregon's legal limit of $500,000 on non-economic damages in personal injury and negligence lawsuit claims. OSCC, health care groups, and business organizations are opposing this legislation because it is a significant factor in driving up health care costs and general liability costs for employers. We expect the bill to pass the House easily. The real fight will be in the Senate.

• Employer Health Care Taxes, Part 2. (HB 3262, HB 2269) On Thursday, the House Health Care Committee will hold a public hearing and possible work session on either HB 3262 or the -1 amendment to HB 2269. It appears that legislative leaders plan to move forward with a tax on employers with more than 50 employees who are on Medicaid (or who have family members on Medicaid). The amendment does not appear to be limited to a particular sector, but we assume it raises the projected $120 million in new taxes to close out the health care budget. Much like the 'Cap and Trade' bill, this legislation appears to allow an agency (in this case, the Oregon Health Authority) wide discretion to tax employers to meet revenue objectives with little oversight from the legislature. 

ACTION ALERT

• OSCC has issued an ACTION ALERT for HB 3031 (Paid Family Leave). Please respond today!
  
  Please Make Your Voice Heard at Paid Family Leave Hearing!
  
  Tonight at 6pm, the House Business & Labor Committee and Senate Workforce Committee plan to host a joint public hearing on paid family & medical leave bills that would SIGNIFICANTLY alter Oregon's business climate.  We need local Chambers to show up this evening to speak out about the impact of this extreme legislation!  An action alert has been issued.

What do the bills do?

HB 3031(requires 3/5 vote)

·  Applies to employers with 1+ employees

·  Mandates 32 weeks of paid and protected family and medical leave each year

·  Establishes new payroll tax of up to 1%:

o0.5% paid by employers

o0.5% paid by employees

oCreates state run family insurance program

oDoesn't allow employers to provide substantially similar plans/ currently existing plans

HB 3140/SB 947(don't require 3/5 vote)

·  Expands OFLA eligibility to 1+ employees

·  Expands family member definition

·  Mandates 24 weeks of paid and protected leave AND an additional 24 weeks of unpaid family and medical leave each year

·  Requires 100% of employee wages to be paid 100% by employers while employee is on leave

What's Happening (OSCC Political Observations)

What a week!

First off, Senate President Peter Courtney takes a 10-day 'medical leave' to deal with the stress of the session and its impact on his Grave's Disease. There is wide speculation that he may not return. We aren't able to separate fact from fiction at this point, so our assumption is that he will return. If he does not return, the trajectory of the session and the Democrats' ability to pass major progressive legislative priorities is certainly imperiled.

The second major event of the week was the release of the Ways & Means Co-Chairs' 2019-21 budget blueprint. The budget proposal only left K-12 and Medicaid harmless. All other state programs, including early education, higher education, and CTE were cut short of 'current service levels.' The hue and cry that ensued, primarily from the government employee unions and higher education advocates, added more fuel and momentum for additional business taxes.

Finally, we have grown increasingly concerned that SAIF Corporation will indeed be targeted for a raid of its workers' compensation claims reserves to buy down PERS rates for K-12. We have reached this conclusion as it has become clear that any increase in business taxes will be absorbed almost totally by increased PERS costs within two short years. This would make it much less likely that business and/or voters would approve of any additional taxes.

We are getting the distinct impression that Democratic leadership will try and force a choice to buy down PERS rates: either suspend the $748 million personal 'kicker' and divert it to paying down PERS rates for K-12 schools or face the prospect of taking a similar amount out of SAIF's reserves.

Activity on Major Issues

• Cap & Trade. (HB 2020) We are expecting brand new amendments, and perhaps a total re-write of the bill, to be unveiled the week of March 18th. We are not anticipating major improvements to the bill, but because the amendments are being closely guarded, we are unsure of what the new amendments will include.
   
• Independent Contractors. (HB 2498) OSCC was very successful in getting quick grassroots feedback into the House Rules Committee in opposition to HB 2498. As a quick reminder, HB 2498 would have turned Oregon's independent contracting laws upside down, jeopardizing thousands of jobs.  OSCC joined several other business organizations to testify last Monday. We were joined by Keizer Chamber's Dan Kohler, who spoke about about the detrimental impacts to insurance, funeral home, and salon contractors. The Committee is weighing options as it considers a different path forward. Thank you to Bend Chamber and all who weighed in!
   
• Corporate Tax Increases. It is becoming clearer that the Revenue Subcommittee of the Joint Student Success Committee is starting to hone in on a new Commercial Activities Tax (CAT) as the basis for adding new revenue to the state's K-12 system. There is an outside chance the committee may support a Business Activity Tax (which allows deductions for capital expenditures), but early indications are that Democratic leadership is favoring the CAT, which in its current modeling, would be a straight 0.48% tax against a company's topline sales. This would be in addition to Oregon's corporate income tax. The subcommittee is clearly trying to raise a net $1 billion extra per year from Oregon companies.
   
• Lawsuit Damages. (HB 2014) OSCC testified alongside local physicians and health care providers against HB 2014 in the House Committee on Judiciary. HB 2014 would repeal Oregon's legal limit of $500,000 on non-economic damages in personal injury and negligence lawsuit claims.  OSCC, health care groups, and business organizations are opposing this legislation because it is a significant factor in driving up health care costs and general liability costs for employers.

Other Key Issues Coming up This Week

• Employment contracts. (HB 2489) OSCC is closely watching HB 2489, which would substantially shift the relationship between employers and employees in Oregon. The bill eliminates an employer's ability to enforce agreements if they aren't written and disallows employment contracts of longer than two years. A preliminary hearing is scheduled this week in House Business and Labor. 

• OregonSaves penalties. (SB 164) This bill is tentatively scheduled for a work session on Thursday. SB 164 would add penalties to the Oregon Retirement Savings Program, which passed in 2015. OSCC worked with the Treasury and other business stakeholders to address our concerns with the initial bill, and these changes will be reflected in a -3 amendment. 

• Age discrimination. (HB 2818) The House Committee on Business and Labor is planning to host a hearing on HB 2818 on Wednesday. This bill makes it clear that employers may not screen job applicants based on age and adds new and substantial penalties to violation of age discrimination laws.

ACTION ALERTS

• OSCC has issued an ACTION ALERT for HB 2498 (Independent Contractors) for the House of Representatives. 

• OSCC has issued an ACTION ALERT for HB 2020 (Cap & Trade) for all legislators. PLEASE RESPOND ASAP WITH YOUR MESSAGE. To date, OSCC has generated 202 letters to legislators on this bill. Our goal is 1,000.

2019 Legislative Report - Week 6

Dear OSCC members and colleagues -

What's Happening (OSCC Political Observations)

The legislature continues to be a very tumultuous and uncertain place. The Senate is currently mired in a leadership struggle as a handful of progressive Democrats and some Republicans are looking to topple Senate President Peter Courtney. This leadership struggle is taking up precious bandwidth in the Senate and is bogging down the process as Senators are more focused on the leadership issues than anything else.

The death of Secretary of State Dennis Richardson this past week also cast a pall over the session, both emotionally and from a process standpoint. The Governor has the lawful ability to appoint a successor to the late Secretary Richardson, and has stated her intention to find a 'placeholder' who will promise not to run for election in 2020.

This upcoming week is going to represent a major milestone in the 2019 session as the 'Co-Chairs Budget' will be released. This is the legislative response to the Governor's budget that shows how state budget writers would craft the state budget with available resources. It is the first key budget blueprint that shows how the state's money would be allocated without any additional tax increases. The 'Co-Chairs Budget' provides the budgetary foundation for all additional tax and revenue discussions. Usually, it will spawn advocacy for additional taxes and budget investments.

Activity on Major Issues

• Cap & Trade hearings provided a dose of reality.  Hearings in the past week in Newport, Baker City, The Dalles, and Bend provided lawmakers with the stark reality that not all Oregonians are clamoring to pay more for their gasoline, natural gas or electricity to put only a very miniscule dent in Oregon's greenhouse gas reductions. In what was expected to be a showcase for the organizing strength of the environmental activists, something else happened....regular working Oregonians showed up and voiced their displeasure with HB 2020 and its associated costs.
• Medicaid taxes passed. Final passage of the first major Medicaid funding bill, HB 2010, happened this past week. The bill raised over $500 million and will go a long way to closing the state's $623 million budget gap. OSCC issued a floor letter on HB 2010. Our intention was to make sure that legislators understood that HB 2010 will raise over $291 million per biennium from local businesses. It was the first major business cost increase from the 2019 session.
   
• Rent control passed. The statewide rent control bill, SB 608, also passed the House and became law as Governor Brown quickly signed the bill. It is the first statewide rent control bill in the nation and limits annual rent increases to 7% plus CPI on buildings over 15 years old.
• OSCC opposed HB 3022 which overturns Oregon's landmark workers' compensation reforms. OSCC testified against HB 3022 last week, a bill that would have reversed many key, cost-saving provisions in Oregon's workers' compensation system. Before 1990, Oregon had the highest frequency of workplace injury claims, third highest medical costs, and sixth highest premium costs. Today, we have some of the lowest rates in the country and safety programs that help reduce workplace injuries. Oregon's workers' compensation insurance system is one of the last remaining competitive advantages for Oregon companies and OSCC will vigilantly safeguard the system from being compromised.
   
• Oregon revenue forecast added another $67 million to state coffers for the upcoming 2019-21 budget cycle. The state is experiencing a rush of short-term revenue that will slightly ease the budget crunch for the upcoming budget cycle. The "kicker" rebate projection was also increased to a whopping $748 million.

Other Key Issues Coming up This Week

• Independent Contractors. (HB 2498) On Monday afternoon, the House Rules Committee will consider importing California's troubled Dynamex decision. In April 2018, the California Supreme Court determined that independent contractors must meet a new strict "ABC" test in order to maintain their status. That decision impacted 2 million independent contractors in California, making them employees! Now Oregon is looking to follow suit. HB 2498 would add a new test to Oregon's independent contractors: "Do you provide a service different from the business you are working for?" If the answer is "no," HB 2498 would reclassify you as an employee of the business. Implications are broad-doctors, hairstylists, insurance agents, realtors, and many others will be impacted if HB 2498 passes.

• Lawsuit Damages. (HB 2014) This bill is scheduled for a public hearing in the House Committee on Judiciary this Tuesday. HB 2014 would repeal Oregon's legal limit of $500,000 on non-economic damages in personal injury and negligence lawsuit claims. OSCC, health care groups, and business organizations have traditionally opposed this legislation because it is a significant factor in driving up health care costs and general liability costs for employers.

• Transient Lodging Taxes for workforce housing. (SB 595) This may clear its first hurdle this week in the Senate Housing Committee. SB 595 would allow local governments to use previously dedicated TLT funds and apply them to local workforce housing development. Currently, 70% of these revenues are statutorily dedicated to tourism and tourism promotion. If the committee approves the bill, it will be forwarded to the Senate Finance & Revenue Committee.

• OregonSaves penalties. (SB 164) This bill is scheduled for a work session on Thursday. SB 164 would add penalties to the Oregon Retirement Savings Program, which passed in 2015. OSCC worked with the Treasury and other business stakeholders to address our concerns with the initial bill, and these changes will be reflected in a -2 amendment.

ACTION ALERT

• OSCC has issued an ACTION ALERT for HB 2498 (Independent Contractors) for the House Rules Committee.

• OSCC has issued an ACTION ALERT for HB 2020 (Cap & Trade) for all legislators. PLEASE RESPOND ASAP WITH YOUR MESSAGE. To date, OSCC has generated 174 letters to legislators on this bill, well short of our goal of 1,000.

• OSCC has issued an ACTION ALERT for SB 379 (Workplace Marijuana Accommodation) in the Senate. PLEASE RESPOND ASAP WITH YOUR MESSAGE TO SENATORS! (Senators only) To date, OSCC has generated 72 letters to Senators on this legislation, well short of our goal of 250.

2019 Legislative Report - Week 3

Dear OSCC members and colleagues -

We have now completed three weeks of the 2019 legislative session.  The upcoming week appears to be an abbreviated week with several committees being cancelled or otherwise not scheduled to meet this week.

Two major bills are moving quickly - rent control (SB 608) and the first Medicaid funding bill (HB 2010).

 One other major bill is now in full swing - cap and trade (HB 2020).

Additionally, the legislative conversations are now underway on a major business tax to fund K-12 education.  This discussion is happening every Tuesday and Thursday evening in the Joint Student Success Committee (Revenue Subcommittee).  To date, the committee is looking at other state taxing models that utilize gross receipts - Washington, Nevada, Ohio, and others.  At this point, it looks most likely that the committee will recommend a gross receipts-based tax and not additional increases to the state's corporate income tax.

Activity on Major Issues

We are expecting to see early activity this week on a handful of key policy and budget items that Democratic legislative leaders have identified as key priorities, including:

• Medicaid Funding will likely pass Ways & Means this week (HB 2010).  This is the bill that will implement the first stages of Medicaid funding proposed by the Governor - the Hospital provider tax ($98 million) and the insurance tax ($410 million).  Local hospital systems will support this bill because it eliminates the true tax that was levied on hospitals in 2017-19.  However, the bill also increases taxes on commercial health insurance policies from 1.5% to 2%.  These taxes will be passed through directly to small business customers.

• Rent Control will get a Senate vote this week (SB 608).  We expect this bill to pass the Senate as early as Tuesday.  SB 608 has two key features: (1) it limits rent increases to 7% plus CPI in all buildings over 15 years old, and (2) disallows no-cause evictions after one year. 

• Cap & Trade legislation is now in full swing (HB 2020). OSCC members got a major boost last week as NW Natural clearly articulated the huge cost increases on their natural gas customers if HB 2020 were to pass.  They gave legislators a handout that showed massive cost impacts to residential, small commercial, and industrial ratepayer.  The invited testimony on HB 2020 will continue on Monday this week. Public testimony kicks off on Friday afternoon at 1:00 PM and is scheduled again on February 18 at 5:00 PM.  OSCC participation will be needed as the public hearings go around the state in the coming weeks.

• Single use straw ban (SB 90).  This issue seemed to stall as committee members pressed for exemptions from the 'straw ban' for convenience stores and drive throughs as well as a local preemption that would prohibit more stringent local regulations.  Environmental advocates oppose carve-outs and appear to now want to let cities and counties move forward with a patchwork of local regulations.  Although SB 90 appears stalled for now, we don't believe we've seen the last of this issue in 2019.

• Workplace marijuana accommodation (SB 379). In a touch of irony, the proponents for the workplace marijuana accommodation bill were late and almost missed the hearing.  OSCC submitted joint testimony with the general business community in opposition to this measure.  OSCC has an active ACTION ALERT on this issue.  Please contact your senator and ask them to say 'no' to SB 379.

Other Key Issues Coming up This Week

• Small business tax cut repeal. (SB 211)  OSCC is disappointed, but not surprised, to see the Senate Finance & Revenue Committee taking up the issue of repealing Oregon's lower tax rates for pass-through businesses.  Oregon's 'small business tax cut' law currently imposes lower tax rates on the first $5 million of business income.  SB 211 would apply lower tax rates to only the first $415,000 of business income and then would completely repeal the 'small business tax cut' altogether starting in 2026.

• Liabilities for Employment Discrimination. (SB 726)  Watch out for this bill.  This could be very similar to the wage equity bill of 2017 where it is politically impossible to oppose but will have far-reaching impacts on business. This bill started out as targeting sexual harassment, but has morphed into a general employment discrimination bill that creates a new 7-year statute of limitations and holds officers and principals personally liable for discrimination.  OSCC is monitoring this bill closely as there is lack of agreement on potential impacts.
   
• Workplace Marijuana Accommodation.  (HB 2655) This is the House version of SB 379 that would make it an unlawful employment action to condition employment based on refraining from the off-duty use of cannabis.  While the bill contains an exception for jobs where the work cannot be performed while impaired, there is currently no easy test to determine if someone is impaired while at the workplace.  OSCC is opposing this legislation in the Senate because it is a direct affront on an employer's ability to enforce a workplace drug-free policy.  A hearing is posted on the bill this Tuesday in the House Business and Labor Committee.  We do not expect the House to move its version.

ACTION ALERT

• OSCC has issued an ACTION ALERT for SB 379 (Workplace Marijuana Accommodation) in the Senate.  PLEASE RESPOND THIS WEEK WITH YOUR MESSAGE TO SENATORS!  OSCC has made it exceptionally easy to contact your Senator and ask them to say 'no' to SB 379