2019 Legislative Report – Week 21

[The following is an excerpt from the Oregon State Chamber of Commerce’s (OSCC) Legislative Report. Any opinions expressed or implied are those of OSCC and do not necessarily reflect those of the Springfield Chamber or its representatives.]

What’s Happening (OSCC Political Observations)

There are only a handful of major business issues left in the 2019 session. All of the remaining business issues are still shrouded in some doubt and uncertainty in the final days.

We are anticipating that the legislature is on track for adjournment mid-next week. The legislature must adjourn by June 30.

What’s left in 2019?

• Cap-and-Trade (HB 2020) Cap-and-Trade will pass the House presumably today (you can see the OSCC floor letter here). Officially, it is being scored as a $1.3 billion cost increase (tax increase) that will increase costs directly on local manufacturers and increase costs on everyday Oregonians with natural gas increases and a 21 cent per gallon increase in gasoline prices.
  
  As of now, the bill will clearly pass the Oregon House. The intrigue will be in the Senate. There are enough sober-minded Senators who are very concerned about the cost impacts on their businesses and regressive price impacts on constituents. The fate of cap-and-trade in the Oregon Senate is still uncertain.
  
  As of today, business groups (including OSCC) are supporting another set of amendments that will allow a cap-and-trade system to move forward but will mitigate the extreme cost impacts and allow Oregon companies to remain competitive. These are known as the -117 amendments.
  
  The bottom line is that business will not get consideration of its -117 amendments until we demonstrate we can defeat the current cap-and-trade bill on the Senate floor. That is our challenge. Please use our ACTION ALERT today to tell your Senator to Vote NO on HB 2020.

• Paid Family Leave (HB 2005) Paid family and medical leave has dominated the workforce conversation this session and is now coming to fruition. The bill is now being supported by a host of business organizations.
  
  The bill is modeled loosely on Washington state’s paid family leave law and includes: 

• 12-weeks paid family and medical leave annually
• All employees are eligible after they’ve earned $1,000
• State-run insurance program, administered by a TPA, and funded through payroll tax contributions
  • Premium collection begins in 2022
  • Employees can begin to take leave in 2023
• Maximum payroll tax of up to 1%:
  • 60% employee paid
  • 40% employer paid
• Employers with 25 or fewer employees are not required to pay the premium
• All employees are required to pay regardless of business size
• Job protection requirements come into effect after 90 days of employment

OSCC members have had in-depth discussions on this legislation. Although OSCC is aware that this is potentially the most employer-friendly proposal likely to emerge, and OSCC is also aware that this proposal is likely more favorable to any potential ballot measure, OSCC will oppose the legislation.

OSCC is opposing the legislation due to decisive and overwhelming member feedback that their local business communities are bending under the weight of recently passed employment regulations and taxes. There is also widespread feeling that HB 2005, if passed, will only grow more costly as leave rights are expanded over time and current cost constraints prove ineffective.

• Business tax implementation (HB 2164). This is a bill to watch, because it could produce significant tweaks to the just-passed Commercial Activity Tax. Several proposed amendments to the bill have already produced eye-popping changes like exemptions for major corporate investments and lowering the threshold for applying the tax. OSCC will be watching this legislation closely as it receives consideration in the final week. 
• Diesel engine regulations (HB 2007) Negotiations are still ongoing for this on-road diesel engine retrofit and replacement bill. If new amendments get traction, the bill is likely to move next week. The current version of the bill: 
  • Phases out 2007 and older on-road diesel engines by 2029.
  • Limits the phase-out and diesel retrofit requirement for on-road diesel engines to the tri-county (Metro) area.
  • Exempts:
    • F-Plates,
    • farm tractors, and implements of husbandry
    • Low use of 5,000 miles or fewer in a year
    • Motor homes