April 5, 2021
Budget Bills Get Faster Track Near Midway Point
As the 2021 Legislative Session nears its midway point, we are beginning to see some signs that progress will speed up in the coming weeks – at least on the state budget.
Republicans have agreed to waive the full reading of budget bills on the House floor, a concession that will help the constitutionally-mandated budget process to move forward more quickly. The constitution requires a two-thirds majority to skip the full reading and move to title only, which gives a minority party the opportunity to stall the proceedings on policy bills.
A computer audio system will continue to read non-budget bills out loud on the House floor for now, which can take hours. There are several dozen bills currently awaiting readings.
Friday is the 80th day of the 160 day session, and there’s still a lot of work to be done. We’ll keep you posted with updates as that work continues.
Legislature Moves Forward With Hemp Regulations
HB 3000 and a lengthy amendment were adopted this week in the House General Government committee. The bill, in short, directs the Oregon Liquor Control Commission (OLCC) to study cannabis and report its findings to the Legislature by the end of 2021. The amended version will create a task force to look at sales to minors, interstate commerce and further define ‘tetrahydrocannabinol’ and artificially derived cannabinoids that may have an intoxicating effect. It also asks Oregon Health Authority (OHA), in conjunction with the Oregon Department of Agriculture (ODA), to adopt rules to establish the maximum concentration of tetrahydrocannabinol permitted in a single serving of an industrial hemp product.
Steve Marks, Director of (OLCC), said the issue of unregulated hemp products came to light in the past year with Delta 8. He testified that products derived from Delta 8 are on the free market, unregulated, and have no age restrictions for purchase. The products are converted from low level THC with added unknown compounds to produce a heavily intoxicating form of THC. He said this has become a public health concern and recommends that a task force look closely at these products.
Stephen Crowley with the OLCC Hemp and Compliance department gave an overview of what HB 3000 will do, adding that the task force would look at sales to minors and genetically engineered cannabis as well as broader issues.
Jackson Haney with Marshall Group LLC testified from the industry, saying his group firmly agrees that there needs to be a viable regulatory framework, but it must be one that allows hemp to survive and prosper in Oregon. Haney along with Rob Bovett representing legal counsel for Associated Oregon Counties (AOC) both noted that though there have been ups and downs, the hemp industry is an asset to Oregon’s economy. Haney gave suggestions to the committee that there be a hemp license to sell Delta 8, age restrictions for over 21, certified labs with a potential potency cutoff, child proof packaging of products and signature verification for online sales of product delivery.
The amendment will create a task force that will include bipartisan representation from both chambers and Governor-appointed representatives from counties, cities, law enforcement, ODA and OLCC. It is worth noting that there are no industry representatives on the task force, though the the amendment allows for industry input. The -1 amendment can be found in its entirety here and was adopted on Thursday. The House General Government committee has held HB 3000 over waiting on the paperwork from the fiscal office.
Wetlands Protection Bill Worked Out in Committee
HB 2246 was heard last week in the House Ag and Natural Resources committee and would prohibit the Director of the Department of State Lands (DSL) from requiring enhancement of wetlands to correct violation of removal-fill law.
Rep. Shelly Boshart Davis (R-Albany) testified that farmers and builders are finding the state wetland laws hard to understand and therefore comply with. She gave an example of a property owner who sought to remove blackberries from newly purchased land only to find that the blackberries were in a wetland and that DSL was requiring him to restore the property to a pristine wetland that was beyond the condition than it was at the time of engagement. Rep. Boshart Davis added that many times the property owner does not realize they are working within a wetland.
Rep. David Brock Smith (R-Port Orford) noted that in working on the ditch bill he had become aware of the issue and was glad to see the bill would prohibit acts that could be overzealous by the agency. Mary Anne Cooper with Oregon Farm Bureau echoed the same concerns telling the committee that members of OFB have had similar issues and many times related to blackberry removal.
Rep. Susan McLain (D-Hillsboro) said she had concerns that if the bill was to work then there needed to be an agreement with DSL on what the term agreements are and that it needs to be clear. To that Dave Hunnicutt with Oregon Property Owners testified that DSL has standards to determine the prior condition of the properties that include aerial images, property owner testimony and surrounding property owners testimony.
Bill Ryan, Deputy Director of DSL, emphasized the importance of water protection to the agency, which does not mandate that property be restored to more than the original condition because it would be out of the agency’s authority to do so. He said often there is a disagreement on what the original condition was.
Chair Rep. Brad Witt (D-Clatskanie) notified the committee that HB 2246 would be moved to an interim workgroup with a report due back in time for possible 2022 legislation.
Pesticide Bill Would Change Definitions, Certification
The State Pesticide Control Act presented by the House Ag and Natural Resources Department presented HB 2031 with -1 amendments on Thursday. Lisa Hanson, Deputy Director of the Oregon Department of Agriculture testified that the bill will modify definitions used in the State Pesticide Control Act so that changes to pesticide certification will align with the EPA regulations.
The -1 amendment was adopted, and the bill moved to the floor with a “Do Pass” recommendation. Rep. Anna Williams (D-Hood River) will carry the bill on the floor. You can read the report from ODA here.
March 29, 2021
Legislators Sketch Budget Framework
The Joint Ways & Means Committee Co-Chairs released their framework for the 2021-2023 budget on Thursday, setting a course to create a biennial budget in the next three months.
The framework takes policy cues from Gov. Kate Brown’s budget recommendation and assigns work for committees to achieve a balanced budget before sine die. Because there are not enough projected general fund resources to cover ongoing programs and services already approved, this will mean budget cuts. The May Economic and Revenue Forecast will provide the final fiscal preview before the budget is finalized.
To achieve a balanced budget, committees will review necessary cuts and work with agencies to make appropriate adjustments.
Among the highlights from the framework:
- The State School Fund won’t face cuts and is currently set at $9.1 billion, an increase of $102.5 million above the service level estimate.
- The Oregon Health Plan won’t face cuts to eligibility or benefits.
- The American Rescue Plan passed by Congress is expected to provide Oregon with $2.6 billion in federal assistance. The framework plans to use $780 million for new programs and services in the 2021-23 biennium and sets aside $520 million (20%) for the 2023-25 biennium which is also expected to have a General Fund deficit.
- Subcommittees are encouraged to reduce budgets by approximately 1% in their respective areas (e.g., healthcare, public safety, general government, etc.) to cover priorities including education and Ballot Measure 110 implementation.
- Subcommittees were also encouraged to develop additional lists of potential reductions in case the anticipated federal funds have conditions that prohibit their use on specific programs or services.
- The framework also states that Oregon’s two main reserve funds – the Rainy Day Fund and Education Stability Fund – will not be utilized for the 2021-23 biennium so they will be available to address the anticipated 2023-25 budget shortfall.
Floor Session Cancelled After Positive COVID-19 Test
The Oregon House canceled its Monday floor session after a second confirmed case of COVID-19 was reported on Sunday. The diagnosed person was last in the building on March 16 and close contacts have been notified.
This creates yet another delay in House business, and the next floor session is scheduled for Tuesday morning.
Vaccine Timetable Moves Up
All Oregon adults will be eligible for the COVID-19 vaccine by May 1, and counties can apply to start vaccinating the general public as early as April 26. Twenty-two counties have already applied to move ahead of the state-wide timetable, saying they had finished vaccinating all seniors who wanted shots and have moved on to the next priority group.
The new timeline is two months earlier than initially announced, with a promise from the Biden administration to keep up the flow of new vaccines. However, the constant restructuring of the eligibility has caused confusion among many Oregonians.
Oregon Health Authority reported 14% of the state had been vaccinated as of Friday, including two-thirds of seniors.
You can check eligibility in your county at https://covidvaccine.oregon.gov/.
OFRI Bill Moves to House Revenue
House Bill 2357, which seeks to eliminate the Oregon Forest Resource Institute (OFRI) and redirect its funding back to the Department of Forestry and other agencies, had a lively work session on Thursday.
An investigative report by OPB in 2020 claimed the state-funded agency was acting as a public relations and lobbying firm for the forestry industry and had skirted the law by trying to influence lawmakers especially in areas of carbon reduction. After this report the Governor called for a state audit of OFRI which will be concluded this summer.
After the -2 amendment failed, Vice Chair Rep. Zach Hudson (D-Troutdale) the introduced the -5 amendment that would change the allocation of the privilege tax, increase the OFRI board membership from 11 to 13 members and prohibit OFRI from using funding to advertise or promote educational training or outreach related to the forestry industry that does not have a conservation perspective. The -5 amendment was adopted on a party line vote and the bill was sent to the House Revenue Committee.
Rep. Pam Marsh (D-Ashland) said she felt the amendment had been a good compromise that left OFRI intact while still setting aside money that benefits the industry. Many other committee members echoed her comments, with Rep. Susan McLain (D-Hillsboro) adding that as a teacher she had seen the good work of OFRI.
Rep. David Brock Smith (R-Port Orford) told the committee that he normally would agree with his colleagues, but he felt there had been a retaliatory attack on the timber industry on multiple levels this session. He noted that after groups like Timber Unity had killed the “Cap and Trade” bill that was important to many legislators. He closed by saying he hoped there would be a collaborative effort to work on the bill in the House Revenue committee because giving the industry 33% of the funding they initially taxed themselves to create the program was “ridiculous.”
Rep. Jeff Reardon (D-Happy Valley) rejected the idea that there had been retaliation against the industry. He said he felt the amendment was a good compromise and pointed out that other commissions such as the Wheat Commission are not state funded.
Pollinator Health bill moves to the floor with unanimous support
HB 2531 will add three additional agencies to the OSU Bee Project in conjunction with the Oregon Department of Agriculture. The Bee Project is the umbrella project for the state’s pollinator health program. The bill will add the Department of Forestry, Oregon Fish and Wildlife, and the Department of Transportation to the pollinator health program. These agencies have been working unofficially on the program since streams, roadways and forest all work in conjunction and this bill will officially add their participation.
On Tuesday the committee moved the bill to the floor unanimously with a “Do Pass” recommendation. Rep Jeff Reardon (D-Happy Valley) will carry the bill after years of working on pollinator health.
Upcoming Bills of Interest
- HB 2358 (Ag Overtime) hearing on Monday, March 29, 3:15 p.m., House Business and Labor (live video). There are several amendments proposed to this bill that would phase in the overtime over a period of three years. The amendments will not change the base bill but rather phase in the time of the enactment of staggered working hours.
- HB 3185 (Ditch Bill Technical Fix) hearing on Thursday, April 8, 3:15 p.m. in House Ag and Natural Resources Committee (live video). In 2019, the Legislature established the Agricultural Channel Maintenance Program with HB 2437. An unintended consequence was the placement of materials removed from traditionally maintained channels in wetlands. HB 3185 updates language to specify that material cannot be placed on or in undisturbed wetlands.
March 22, 2021
Timber Tax Bills Move to Revenue Committee
The House Ag and Natural Resources committee considered two timber tax bills last week to be sent to the Revenue committee.
The first bill was HB 2379 with the -5 amendments and was presented by Rep. Paul Holvey (D-Eugene), who testified to the committee that the amendment would impose a tax on the owner of timber at the time of harvest and remain a liability of the owner until paid. He said the tax would be imposed at rates multiplied by the pond value of the timber at the time of harvest, regardless of whether the forestland of the owner is contiguous. Those rates would be 3 percent for owners of 100 acres or less, 4 percent for owners of 100-640 acres and 5 percent for owners of more than 640 acres. The first 25,000 board feet of timber harvested annually by any taxpayer during each calendar year would be excluded from the total quantity of timber subject to the tax imposed under the bill.
The proposed -5 amendment had brief discussion by the committee with Rep. Susan McLain (D-Hillsboro) saying she felt there was more conversation needed on the amendments so she would only support moving the initial bill to the Revenue Committee for continued conversation. Rep. Jeff Reardon (D-Happy Valley) said he appreciated that the smaller landowners had been protected but the bill would also raise funding for wildfire prevention and added that it is a complicated issue. Rep. Anna Williams (D-Hood River) said she would give a courtesy yes vote but also added she wanted additional conversation on the amendments in Revenue.
Vice Chair Rep. Zach Hudson (D-Troutdale) made a motion to adopt the -5 amendment but the motion failed after Rep. McLain voted no along with the Republicans on the committee. Rep. Hudson then made a motion to move the initial bill to Revenue by prior reference and the motion passed with Rep. McLain voting aye. Rep. Pam Marsh (D-Ashland) told the committee that she also serves on Revenue and will be sure the committees concerns are known.
HB 2070 will Extend Timber Privilege Tax
Another Timber Tax bill also had a work session. HB 2070 will extend the privilege taxes on merchantable forest products harvested on forestlands. There was no discussion on the bill and the committee moved straight into a motion with Vice Chair Rep. Vicki Breese Iverson making the motion. The bill moved to the Revenue Committee unanimously.
After the vote Rep. David Brock Smith (R, Port Orford) noted that the committee members had all supported HB 2070 and added it was not an issue on resources coming from the timber industry in reference to HB 2379 but rather a fairness issue and he looks forward to the discussions in the Revenue Committee.
Committee, OSHA Both Making Air Quality Rules
A bill focused on health protections for people who work outside during poor air quality periods had a debated hearing this week in House Business and Labor. HB 2813 would require employers to provide certified respirators when concentration levels of particulate matter in the air are within the air quality index categories of 151 or greater (unhealthy, very unhealthy, or hazardous levels). It would also require employers to make these certified respirators mandatory when the air quality index exceeds the hazardous level at 500 – which was reached in Salem in September 2020.
The bill also requires employers to determine concentration levels of particulate matter in the air unless the employees are required to wear respirators already while performing their work (such as front-line firefighters.) It would also require workplace posting in English and five other commonly used languages.
Rep. Maxine Dexter (D-Portland) gave a detailed description of the bill, noting that it is drafted after a similar legislation from California and also testifying that OHSA is currently writing rules to the effect of the bill. She added that the issue is so important to workers’ health that sponsors of the bill believe it is important to put the regulations into statute.
Dan Jarmin testified on behalf of Oregon Winegrowers and a coalition of Oregon business employers that included Oregon Forest and Industries, Weyerhaeuser, Associated General Contractors, Oregon Farm Bureau, Oregon Business and Industries. He noted that complete testimony from the coalition was uploaded to OLIS and the Winegrowers hope to be able to support the bill if some of the listed concerns and possible amendments could be addressed.
It was also pointed out that exemptions in the California legislation are not in HB 2813; for instance, that hours worked outside could be noted before the mandates start so that someone outside for one hour a week would not fall under the mandates.
OSHA’s rulemaking process, including 60 stakeholders, is running concurrently with the legislative session with an anticipated final rule by September 30. Given this overlap, legislators were encouraged to decide whether to pursue consensus legislation or the rulemaking process in order to avoid the creation of conflicting regulations.
HB 2813 has met the first chamber deadline and has 15 sponsors so it seems reasonable that some form of the bill will move with possible amendments.
100% Clean Energy in Oregon
Hearings were originally supposed to take place last week on the various 100% clean energy bills. However, the Microsoft Teams outage delayed scheduled proceedings and the hearings are now set for this week and next.
March 15, 2021
Answers on Policy and Budget Coming Soon
The two big themes that drive a legislative session – policy and budget – are gaining clarity this week. The first major bill deadline will begin to set the pace at which legislation is heard, and the approval of the federal American Rescue Plan Act 2021 will begin to address many of the fiscal questions that were still fuzzy at the release of the quarterly revenue forecast in February.
Key deadlines for policy committees (not including Ways & Means, Revenue, Rules, or joint committees):
- Friday, March 19 – Bills must have a committee work session scheduled in their first chamber.
- Tuesday, April 13 – Bills must pass out of their first chamber committee.
- Friday, May 14 – Bills must have a committee work session scheduled in their second chamber.
- Friday, May 28 – Last day for work sessions on second chamber measures.
- Monday, June 28 – Constitutional last day of legislative session
Bills that don’t meet these deadlines are considered dead and will either be scrapped or reconstituted in a future session.
The big assumption made in the February revenue forecast was that more federal dollars would be infused into the state in 2021. Two federal stimulus packages in 2020 helped governments, businesses, and individuals persevere through COVID-caused unemployment and economic instability, and a third package signed by President Biden on Thursday will give state budget writers more room to work.
The revenue forecast on May 19 will drive the budget process in the final month of the fiscal year as a new biennial budget is drafted and approved.
Public hearings have begun for Oregon’s 2021 redistricting process as legislators are staking their claim in playing a role in the process despite a delayed return of U.S. Census data.
The series of digital “town hall” hearings on congressional seats began last week. Oregon is likely to add a sixth congressional seat, though official census returns have yet to confirm that assumption. Because of the delay, the Oregon Legislature will have adjourned by the time the data is available. This means the task of drawing district lines will fall to Secretary of State Shemia Fagan.
Senate President Peter Courtney (D-Salem) and House Speaker Tina Kotek (D-Portland) petitioned the Oregon Supreme Court last week to extend the window and allow lawmakers 90 days after the data is delivered to deliver a redistricting plan. The data is expected around Sept. 30.
Fagan, a former state senator who was elected as Secretary of State in November, said legislators should be allowed to submit a boundary proposal, but she is concerned the timeline would disrupt filing deadlines for the 2022 primary election.
Farmworker OT Exemption up for Debate
Following our neighbors in California and Washington, the Oregon Legislature is considering a bill that will remove the overtime exemption for agricultural workers.
HB 2358 would require overtime compensation for workers who put in more than 40 hours in one workweek. The bill had its first hearing on Monday in the House Committee on Business and Labor.
Proponents of the bill testified that the exemption is based on a racially-driven 1938 federal carve out in the Fair Labor and Standards Act and that it has no credibility or fairness in today’s laws. They note that several other states are removing the exemption for workers.
They also testified that farm workers are essential workers and need to be treated as such. Rep. Andrea Salinas (D-Lake Oswego), a bill sponsor, noted that farm workers labored through poor air quality during the September fires due to the perishable nature of crops. Rep. Ricki Ruiz (D-Gresham), also a bill sponsor, testified that overtime laws exist because there are risks to the job and urged the committee not to treat essential workers as second-class citizens.
A coalition of agriculture groups and individual family farms submitted written opposition. Jenny Dressler with Oregon Farm Bureau told the committee that the bill would not result in more pay for workers because employers would be forced to cap hours, switch crops, mechanize or even leave the state. She also added that Oregon has some of the best benefits for workers including a minimum wage twice that of the federal minimum wage, five days of protective sick leave, benefits for nursing mothers and a medical leave phase-in for workers. Dressler added that because commodity markets set the price these added wages cannot be absorbed as they can in other industries.
The committee was unable to hear the list of those who signed up to testify and Chair Rep. Paul Holvey (D-Eugene) told the committee that there is a possibility that the committee will come back for a second day of testimony after March 17.
March 8, 2021
COVID Package Passes Senate, Cases Decline in Oregon
As Oregon marks the one-year anniversary of Gov. Kate Brown’s COVID-19 emergency declaration on Monday, the rapid decline in new cases and increase in vaccinations have begun to have an effect. More counties have moved out of the Extreme Risk category into High or Moderate Risk, which allows more dining, entertainment, and economic activity.
Gov. Brown announced on Friday an executive order to return all willing Oregon students to the classroom no later than April 19. Parents have the option of keeping students at home for continued distance learning. Many districts in lower risk areas have already begun bringing students back.
On Monday, Gov. Brown and legislative leaders followed up the announcement with a plan to spend $250 million in general fund dollars and $75 million in federal funding on a summer learning package to help students catch up after a year of disrupted education.
The U.S. Senate late Saturday approved a $1.9 trillion economic stimulus package similar to the CARES Act signed into law in March 2020. The bill now goes back to the U.S. House for approval and President Biden for his signature.
- $350 billion for state, local, and tribal governments to respond to the public health emergency and replace lost revenue.
- $126 billion for K-12 schools and $40 billion for higher education.
- Direct payments of $1,400 per person who makes less than $75,000 annually (or couples who make less than $150,000). Dependents would also receive $1,400 each. These payments phase out entirely for individuals who make more than $80,000 (or couples makes more than $160,000).
- Extending the $300-per-week unemployment benefit boost through early September.
Meanwhile at the Oregon Capitol, the first bills passed the Senate last week and 130 new ones were introduced. Because of the slow rollout of committee hearings, technical glitches, snow days, and the one-day Republican walkout, legislators are feeling the crunch to get bills moving. This sense of urgency may lead to expediency at the cost of efficacy in the coming weeks.
In a perfect world, each bill would receive thorough vetting and amendment process to fine tune the language and eliminate unintended consequences. As more work is piled on committee desks, the time for such review decreases.
OSHA Hearings to Extend COVID-19 Housing Rules
OSHA released a hearing notice last week extending the workplace housing COVID-19 requirements. As stated in the rule summary “this rule will be repealed once it is no longer necessary to address the COVID-19 pandemic as it relates to employer-provided labor housing.”
Hearings on the proposed rule will be:
- Thursday, March 25, 5 p.m. in English (Registration)
- Friday, March 26, 10 a.m. in English (Registration)
- Tuesday, March 30, 5 p.m. in Spanish (Registration)
Options for written and virtual testimony are provided. You will need to register if you plan to attend virtually. Comments will be open until April 16.
Direct link to the proposed rulemaking (notice letter, filing documents, and proposed rule text).
March 1, 2021
Bill Bottleneck Grows as Legislative Work Continues
This is the point in a typical legislative session where early bills have begun to move out of committee and through floor hearings in the House and Senate, clearing the way for fine-tuning work sessions and bigger discussions on major legislation.
But as we all know, this isn’t a typical legislative session.
Instead, after legislators returned to work following a winter storm that delayed committee hearings in mid-February, Senate Republicans staged a one-day floor walkout on Thursday. Republicans have said this was a response to Gov. Kate Brown’s extension of the COVID-19 State of Emergency, though the result was a further delay and bottleneck of bill readings required to take place in the limited in-person floor sessions. The next Senate floor session is scheduled for Wednesday.
Though no bills have been voted off of either floor, House Speaker Tina Kotek said work sessions are already in development. There is also a sense that many policy negotiations are in their final phase, even if there is not yet majority consensus.
Meanwhile, as Oregon prepares to mark the March 8 anniversary of the COVID-19 emergency declaration, Gov. Brown and health leaders announced the next phase of vaccine eligibility and rollout. The goal is to open vaccines to every Oregon adult by July, and OHA Director Pat Allen said he expects first doses could be administered to everyone who wants one by August or September.
- No later than March 29: Adults 45-64 with underlying health conditions, seafood and agricultural workers, food processors, people in low-income and congregate senior housing, homeless people, people displaced by wildfires, and wildland firefighters.
- No later than May 1: Adults 16-44 with underlying health conditions, people in multigenerational housing, other frontline workers including grocery and food service workers, U.S. Postal Service employees, transit workers, local and state government workers, and journalists.
- No later than June 1: Adults 45-64.
- No later than July 1: All Oregonians 16 and older.
Through last week, 14% of Oregonians had received the first dose of the vaccine and 7.2% had received both doses. Gov. Brown’s executive order from last week extends the state of emergency until May 2.
Timber Tax Testimony Overflows Committee Hearing
The second week of timber tax bill hearings in the House Ag and Natural Resources Committee brought a slate of opponents to docket, including:
- Chris Edward, Oregon Forest and Industries Council
- Jim James, Small Woodlands Association
- Kevin Campbell, Associated Oregon Loggers
- Lauren Smith, Association of Oregon Counties
- John Sweet, Coos County Commissioner
- Hasina Wittenberg, Special Districts Association of Oregon
These and other industry representatives and local governments spoke up in opposition to HB 2379 and HB 2389. HB 2379 seeks to impose a severance tax on the owner of timber at time of harvest at 5% of value of timber and HB 2389 will make the tax permanent.
Jody Wiser of Tax Fairness of Oregon testified in support of the bills citing that Oregon timber property owners are paying a third less taxes on all forestland than Washington even though Oregon harvests 46% more timber. Wiser told the committee that struggling rural counties need the tax revenues for forest management including wildfire cost and water system maintenance and improvement. She urged the committee to form a workgroup to come up with one robust policy bill.
The industry representatives and local governments echoed concerns about bringing forth a new tax this session. They said that on the heels of the Labor Day fires that burned 400,000 acres in Oregon, landowners need money to rehabilitate their land. Chris Edwards with OFIC said that the taxes would be secondary to the loss of wood product jobs which many rural communities depend on. Local government urged the committee to have everyone at the table when future tax bills are drafted and to direct all revenues from a severance tax to local governments as they have in the past.
In a subsequent hearing on Thursday the public gave testimony of the severance tax bills. After a technical glitch they were able to hear from more than 70 small woodland owners who told the committee that this is the worst time to bring back the severance tax. Many had incurred damage from the wildfires last fall. They reminded the committee that they currently are paying taxes on their property and need money to rehabilitate their land. They urged the committee to allow the MOU between the timberland owners and the environmental groups to have a chance to work. The historical pact was passed last year as SB 1602 during the first special session. Several also voiced opposition to HB 2357, which will eliminate the Oregon Forest Resource Institute, a valuable resource for many woodland owners as they provide training and business resources along with valuable school partnerships.
This week will be another opportunity for the public to testify on the bills after the technical glitch cut many out. Chair Rep. Brad Witt (D-Clatskanie) said he wants to be sure that everyone wanting to testify has their chance. HB 2357 will also be on the agenda for Tuesday, March 2.
Revenue Picture Gets Brighter in Latest Forecast
The warnings of massive revenue loss for Oregon caused by the COVID-19 pandemic haven’t come to pass, according to the quarterly economic forecast released Wednesday. In fact, state economists offered reasons for optimism during a House Revenue Committee hearing as the state climbs out of the health crisis.
In 2020 the economic forecast predicted a budget hole as large as $2 billion for the biennium, but the latest report shows revenue resources will come in $642.7 million above previous expectations. Mark McMullen, Oregon’s state economist, said the two biggest factors have been the “helicopter drop” of federal aid and the steady increase of both business income and asset markets.
A few other notes from the report:
- The forecast includes the assumption of a third federal stimulus package in the coming months. Federal funds have stabilized the economy through the past year and helped drive total personal income higher than before the pandemic despite 160,000 fewer jobs in the state.
- Oregon’s economy is expected to return to full employment by early 2023, 6-9 months sooner than previously expected.
- The 2020 tax season is just beginning, and the May forecast will include much more specific data about personal and business tax revenue. It will also determine whether the personal and/or business kickers will come into play. Currently, taxpayers are on path to get a $570.5 million kicker in 2022, a sharp turn from the previous forecast.
- Other revenue sources, including lottery funds, remain modest, or flat, and will likely stay that way through the 2021-23 budget cycle. If these resources remain roughly unchanged for a third consecutive budget cycle, revenue won’t be sufficient to keep up with the need for and cost of public services and will pose difficulty for state budget writers.
- The state’s reserves and end fund balance will provide some additional cushion. The reserves (Education Stability Fund and Rainy Day Fund) are expected to have a balance of $1.3 billion at the end of the 2019-21 biennium. In addition, the state’s ending balance is anticipated to end the biennium at $1.7 billion.
CAT Deadline in April
Businesses with more than $1 million of commercial activity in 2020 are required to file a Corporate Activity Tax (CAT) return by April 15. The tax is $250 plus an additional 0.57% of activity above the $1 million threshold. Any business expecting $750,000 in commercial activity is required to complete a one-time registration. More information is available at the CAT website.
February 22, 2021
Winter Weather, Lack of Access Pushes Work To This Week
A combination of winter weather and power failures set the Legislature back nearly a week, as committee hearings were postponed and rolled over into this week. All meetings were cancelled last Monday and Tuesday, as well as several on Wednesday. Senate President Peter Courtney (D-Salem) asked Senate committee chairs to not take votes on any measures on Wednesday and to schedule additional hearings to make sure full testimony could be heard.
Regardless of the delays, the Tuesday, Feb. 23 deadline to file non-priority measures remains unaffected and marks a key date in winnowing the number of bills up for discussion. Legislators are each allowed to file up to five priority bills after the deadline.
With more than 2,100 bills filed so far this session, committee chairs have plenty of work to do to organize and prioritize their hearings and send legislation to the floor.
The quarterly revenue forecast will be released Wednesday, giving legislators a better financial perspective on the current state of the economy and tax flow. This will factor into any legislation with a fiscal impact and begin setting the direction of the state budget. The May forecast will then provide the final numbers used for the creation of the biennial budget.
Rep. Diego Hernandez (D-Portland) resigned his seat days before an expected expulsion vote by the full House. The House Conduct Committee determined that Rep. Hernandez had harassed three women and created a hostile workplace at the state Capitol. Multnomah County commissioners will appoint a replacement in the next 30 days who will serve until the next election.
Sen. Dallas Heard (R-Roseburg) was elected as the chair of the Oregon Republican Party on Saturday. Former Senate Republican Leader Herman Baertschiger Jr., now a Josephine County Commissioner, was elected vice chair and Sen. Dennis Linthicum (R-Klamath Falls) was chosen as treasurer.
Hearings Tackle Complex Timber Tax Structure
The House Ag and Natural Resources Committee held the first of four informational hearings on timber taxes and their distribution on Thursday in a prelude to a series of bills that will be coming before the committee this session.
Chair Rep. Brad Witt (D-Clatskanie) noted that reporting last year suggested Oregon had an unfair timber taxation policy and included strong questions about the integrity of the state system, resulting in a series of bills on how to collect taxes on the public’s behalf. The committee will spend these hearings looking at what is sustainable and what changes are warranted, Rep. Witt said.
The first hearing focused on expenditures and distribution. Jamie McGovern with the Legislative Research office and Matt Stayner with the Legislative Fiscal office started the hearing presenting data on the intersection of timber tax and property tax. McGovern said almost half of Oregon land (27 million acres) is forestland and about two-thirds of that managed by private landowners. Taxation is only applicable on private lands.
Oregon’s taxation system is complicated. The state forestland is divided into land that is assessed on the value of the property and land that is taxed on harvest. The taxes are applied in part to the Oregon Forestland Protection Fund (OFLPF). This fund is particularly important as it applies to fire season expenditures, and as the harvest trend has decreased since the 1990s, more is placed in the general fund for fire protection and recovery.
Rep. David Brock Smith (R-Port Orford) pointed out that 80% of forest fires are on public lands, so private landowners are paying an enormous amount to protect their 5% of forestland ownership. After the revenue presentation, Rep. Susan McLain (D-Hillsboro) said she felt that the conversation was very siloed, and though the numbers were helpful the issue deserved a wider conversation. She also directed the committee to an op-ed written by former State Senator Arnie Roblan and former Rep. Caddy McKeown that encouraged the legislature to allow a historic MOU between the timber companies and the environmental groups and SB 1602 from last session time to work.
“It is time to hold off on legislation that fuels a polarizing debate over Oregon forest policy, and instead support the arena for collaborative compromise,” wrote Roblan and McKeown.
The second part of the hearing on Thursday focused on the distribution of taxes. The panel included Peter Daugherty (State Forester, Oregon Department of Forestry), Tom Deluca (Oregon State University Department of Forestry) and Erin Isslemann (Executive Director, Oregon Forest Resource Institute). Each speaker outlined for the committee how they use the funding from the Oregon Forest Land Protection Fund. It is also worth noting that a bill is out this session (HB 2357) that seeks to eliminate OFRI and redirect its $4 million to ODF for logging management and practices. Gov. Kate Brown also directed a state audit on OFRI in August.
This week the committee will begin to hear bills that will look at the privilege tax and reinstatement of the severance tax. Proponents of the bills say this will bring millions of dollars back to hurting counties across the state.
February 16, 2021
Legislators Begin to Talk Possible Return to Capitol
As more Oregonians receive the COVID-19 vaccine and the post-holiday surge of new cases wanes, legislators and the governor’s office have begun private talks about a return to in-person meetings in the Capitol for the second part of the 2021 Legislative Session. While any timeline is going to be conditions-based, the most optimistic projections point to a return in late March or April.
This return would require coordination with the Oregon State Police for building security and rely on the guidance of the Oregon Health Authority. As of Sunday, 475,828 people had begun the vaccine process, with 189,061 of those being fully vaccinated. Each week the number of eligible Oregonians increases.
In the meantime, committees continue to overflow with work and a backlog of bills continues to grow. Nearly 4,000 bills have been introduced and the process of whittling down is underway. Many bills are already dead as some committee chairs have decided on the full scope of their session workplans based on the time remaining before the chamber of origin deadline.
This Friday is the deadline to submit new concepts for drafting, and Wednesday, Feb. 23 is the deadline to officially introduce measures. The work is further compacted as the Legislature cleared its committee docket for Monday and Tuesday of this week due to snowstorms.
Winter Weather Strikes
Gov. Kate Brown declared a state of emergency in nine counties due to a severe winter storm that cut into power, transportation, and communications services. At least 330,000 Oregonians remained without power as of Monday morning.
The emergency declaration is active in Benton, Clackamas, Hood River, Linn, Marion, Multnomah, Polk, Washington, and Yamhill counties. The order authorizes the Oregon Office of Emergency Management to activate the state’s emergency plan. The Oregon National Guard, Oregon State Police, Oregon Department of Transportation and Oregon Public Utility Commission are directed to assist as necessary.
The U.S. Census Bureau announced on Friday it won’t be able to provide detailed data until the end of September. This is a six month delay from the initial expectations, and further delays and complicates Oregon’s redistricting process.
Committees in the House and Senate have been discussing options to move forward with the understanding that census data wouldn’t be available until after the close of the 2021 Legislature. But this new date will also push beyond the August 15 deadline for a redistricting plan published by the Secretary of State’s office, the constitutional backstop for the legislature.
Ag Bills Still on the Table as Session Moves Forward
Bills are beginning to have hearings although none have yet passed out of committee for floor votes. Some key bills we are monitoring that are still in the queue for a hearing:
- HB 2031 Relating to regulation of the use of pesticides by the State Department of Agriculture. Creates and modifies definitions used in State Pesticide Control Act.
- HB 2192 Establishes Interagency Science Review Panel on Pesticides within Oregon Health Authority.
- HB 2229 Relating to state preemption. Exempts from state preemption Josephine County measure that banned production or cultivation of genetically modified crops.
- HB 2238 Relating to private property during emergency. Clarifies Governor’s authority to use property during emergency.
- HB 2358 Relating to overtime. Prohibits employers from permitting or requiring agricultural workers to work in excess of 40 hours in one workweek unless workers are compensated for overtime hours worked.
Coyote Contest Ban Bill Gets Two Days of Testimony
HB 2728 prohibits anyone from conducting or participating in a contest, competition, tournament or derby that has the objective of taking coyotes for cash or prizes. It provides that prohibition does not apply to a raffle conducted by a nonprofit organization if the organization does not award raffle prizes based on number, weight or size of coyotes taken. It includes a maximum fine of $2,000.
In the last week there have been two hearings in the House Ag and Natural Resource Committee on HB 2728. The bill has been controversial for the past two sessions as some have argued it is a tool for livestock protection in eastern Oregon. Some studies cited have shown that this type of population reduction creates the coyote population to grow.
February 9, 2021
Committee Schedule Loaded to Make Up for Lost Time
As the 2021 Legislative Session rolls into its fourth week of virtual meetings, the gears of government are beginning to turn in a more recognizable fashion. Committees are holding hearings with testimony from the public, and the remote hearings process is beginning to feel, dare I say … normal.
Bill tracking has been uniquely challenging, but not due to the remote nature of session. Presiding officers created new committees to address special issues that warrant focused attention, such as COVID-19, Wildfire, Redistricting, Equitable Policing. To put this into perspective, together with the normal standing committees, it is not uncommon to see as many as 20-23 committee meetings (40-50 hours) on any given day.
Despite all this activity, not a lot has happened yet in terms of committee action. A large portion of the work that has been done is in the category of unfinished business from the 2020 session. When the session adjourned so abruptly, there were over 100 bills that had been fully vetted and passed out of committees and were awaiting final floor votes before becoming law. Committees have been re-passing those bills to get them off the plate early in an effort to focus on the new issues of the day.
Of particular note last week, the House Committee on Conduct voted unanimously on Friday to expel Rep. Diego Hernandez (D-East Portland) for sexual harassment and creating a hostile workplace at the Capitol. The next step is a full House vote, which requires a two-thirds majority. The House has never taken up such a vote.
Pollinator Health Bill Adds Agency Cooperation
After many years of working on pollinator health issues and serving on the task force, Rep. Jeff Reardon (D-Happy Valley) has introduced HB 2531 that will add three additional agencies to the Oregon State University Bee Project in conjunction with the Oregon Department of Agriculture. The Bee Project is the umbrella for the state’s pollinator health program that would encompass the Department of Forestry, Oregon Fish and Wildlife, and the Department of Transportation. These agencies have been working unofficially on the program since streams, roadways, and forests all play a role in pollinator health and this bill seeks to officially add their participation.
Andony Melathopoulos, the assistant professor who oversees the program within the OSU Extension office, and Stephanie Page of ODA told the committee that this will put Oregon in line with other states. They said the program has added pollinator questions to exams of licensed pesticide applicators, provided education on risks assessment, and collaborated with multiple agencies on outreach and education. Jenny Dressler representing Oregon Farm Bureau testified in support of the bill and thanked Rep. Reardon for building on the spirit of collaboration for outreach and education for pollinator health.
Farming Structures May Get Code Exemptions
Rep. Breese Iverson (R-Prineville) introduced HB 2611 which would exempt structures used for agriculture from state structural codes. Dave Hunnicutt from Oregon Property Owners Association testified that the exemption had parameters such as no public use, fewer than 10 people in the facility at one time, etc. He also clarified that the bill would not change land use within the statutes. He noted that recently there have been some issues with the definitions of what a building is being “used for,” with some county building code inspectors interpreting it differently. He said by adding the word “primarily” it could strike a balance for the qualifications required for the exemption.
Several members raised questions on the exemption. Rep. Anna Williams (D-Hood River) said she had concerns with the current housing shortage and homeless situation that in acts of kindness someone may allow a family to use the structure for shelter and the building would not be safe.Co-sponsor Rep. David Brock Smith (R-Port Orford) said that defining primarily and predominate use within the bill should bring clarity.
February 1, 2021
Census Data Delays Redistricting Effort
Legislators learned last week that U.S. Census data will not be available until after July 1, the constitutional deadline for redrawing electoral districts in Oregon. This will diminish the legislature’s role in creating the district maps and likely pass the bulk of the responsibility to the Secretary of State.
Each of the 60 House and 30 Senate districts must have nearly identical populations and account for a variety of other factors, including race, political affiliation, and common areas of interest. The delay in census data and the requirement of 15 public hearings – 10 before the district lines are proposed and five after they are complete – will make that process challenging.
If the Legislature is unable to complete a map by the deadline, the responsibility falls to newly elected Secretary of State Shemia Fagan, who must submit a plan by August 15. Depending on the timeframe of census data returns, this could leave just a few weeks for her office to complete a map that must pass muster with the Oregon Supreme Court.
Apportionment census data will be available in April, giving some insight into Oregon’s population and determining whether the state will receive a sixth U.S. Representative.
The process is already politically-charged and vulnerable to legal challenge, and now must be completed on a short deadline lacking much of the necessary information. However, it is an important process that ensures a fair electoral process for the next 10 years.
A Brief History
The Oregon Legislature has failed to complete a district map by the July 1 deadline in nearly every decade for the past 70 years, handing the responsibility to the Secretary of State.
The only exceptions:
1981 – The legislature completed a map, but the federal lines were overturned and redrawn by the Oregon Supreme Court.
2011 – The current districts were developed and passed by an evenly split Oregon House.
The 2001 Legislature, then with Republican majority, passed a redistricting plan on a party-line vote. But Democrats walked out of the session to deny a quorum, passing the responsibility to the Secretary of State to complete the map.
Ag Housing Credit Bill Introduced
The House Committee on Housing heard HB 2096 relating to an agricultural housing tax credit. The bill would authorize the Housing and Community Services Department to enter into certain transactions with respect to agriculture workforce housing tax credits and increase the maximum credits issued to $24 million per biennium. Not in the bill but proposed for rulemaking was a monetization piece for a pilot program which would sell part of the credit to utilize the program. Margaret Salazar, the Executive Director of the Housing and Community Development Department, testified that the program was based on the number of applicants the department receives each year.
There were several questions regarding the pilot program and Chair Rep. Julie Fahey (D-Junction City) noted that there would be more discussion moving forward on the monetization and to ensure the credit was used for farmworkers in need following the virus and wildfires of 2020.
The House Veterans and Emergency Management committee heard HB 2140, which seeks to correct language from 2019 regarding farm and home loans for veterans and reinstate home improvements and refinancing into the program language when applicable.
In the coming weeks and worth noting is the Oregon Department of Agriculture’s budget hearing. Oregon State University Extension is seeking to expand organic farming positions and a bill to remove the exemption of overtime pay for Agricultural workers. Stay tuned.
January 25, 2021
Legislative Agenda Focused on Here-and-Now
If the first week of the 2021 Legislative Session is any indication, legislators and other elected officials will be spending much more focus and energy on immediate crises than long-term policy goals in the coming six months.
While sessions in 2019 and 2020 were both shaded by partisan debates about cap and trade regulations, legislators now have a host of immediate issues to address, including:
- After more than 10 months of COVID-19 response, the state is less than a month into a year-long vaccination effort and has many months of recovery ahead.
- The $1 billion budget hole left in its wake will play a significant role in every discussion, including the cost-saving proposals in Gov. Kate Brown’s $25.6 billion budget.
- Summer wildfires that destroyed more than 4,000 homes in the middle of a housing crisis is a simmering issue on the forest forest management, land use, and construction.
- Racial equity has remained at the forefront for many after months of protests and a special session dedicated to the topic.
- And, of course, the decennial redistricting process begins with the return of the federal census, in which a sixth Congressional seat for Oregon is on the table and both state House and Senate districts will get new boundaries.
How these current crises shape the conversation around bigger issues, from carbon emissions to campaign finance reform, is yet to be seen. But legislators only have so much bandwidth and much will be spent on the immediate tasks at hand.
Gov. Kate Brown’s State of the State Address last week highlighted areas where she hopes to aid Oregon’s recovery, including increased access to health care and broadband, investment in education and housing, creation of community wildfire plans, and prioritization of criminal justice reform.
Virtual committee meetings began last week and the majority will gather this week to begin hashing out the specifics of the nearly 2,000 bills that have been introduced. This includes 17 committee meetings today.
Ag Committees Will Convene This Week
With the delayed start of the session there were no Ag committee meetings in the House or Senate last week, but hearings will resume this week. The full hearing schedule can be found on the Oregon Legislative Information System website.
Committee Schedule for Ag Committees
- The House Committee on Ag and Natural Resources will meet virtually each Tuesday and Thursday at 3:15 pm. This committee is chaired by Rep. Brad Witt.
- The House Committee on Energy and the Environment will be held each Monday and Wednesday at 1:00 pm. This committee is chaired by Rep. Pam Marsh.
- The Senate Committee on Natural Resources and Wildfire Recovery will be held each Tuesday and Thursday at 3:15. This committee is chaired by Sen. Jeff Golden.
- The Senate Committee on Energy and the Environment will be held each Tuesday and Thursday at 1:00 pm. This committee is chaired by Sen. Lee Beyer
Due to COVID-19, the Oregon Capitol is closed and the 2021 session will be held virtually until further notice. The legislature has published instructions on testifying remotely to a committee and they can be found here. It is important now more than ever for you to have a voice in the process. If you have any questions regarding testifying, please let me know.
January 18, 2021
Preview of the 2021 Oregon Legislative Session
The 2021 Oregon Legislative Session will officially begin Tuesday, but due to concerns of escalating violent protests the Oregon Capitol will remain inactive until at least after the inauguration of President-elect Joe Biden in Washington D.C. on Wednesday, January 20.
Protests outside the Oregon Capitol disrupted but didn’t derail the December 22 Special Session in Salem, when lawmakers gathered to pass a handful of COVID-19 relief bills. Several protesters gained access to the building and damaged property.
In preparation for this week, Oregon State Police have barricaded much of the Oregon Capitol. The Oregon National Guard has also been authorized to assist if the need arises.
But, eventually, the 2021 legislative session will begin, and Oregon legislators have a full backlog of topics on the agenda. While the legislative process has been amended somewhat to contend with the ongoing COVID-19 pandemic, the fundamental procedures prescribed by the Oregon Constitution will set the ground rules.
- The session officially begins on Tuesday, January 19 and must end within 160 days, on or before Monday, June 28.
- As during the three special sessions in 2020, in-person attendance will be limited to legislators and other elected officials, staff and journalists. Providing information and context to legislators will more than ever require close attention and active outreach.
We’re preparing for a unique session with unique challenges. Please don’t hesitate to reach out with questions or concerns as we navigate this new landscape.
Bills on Pesticides, Water, and Land in the Works
During last week’s organizational days, agricultural stakeholders started weekly meetings to talk about bills of interest. The spectrum this session is broad with 2020 bringing not only COVID-19 and changes to regulatory requirements to deal with the virus but also an unprecedented fire season that left many rural communities devastated.
This important business may draw attention away from cap-and-trade legislation that has been a central focus of the past two sessions, but there may efforts to encourage more renewable fuel and cutting emissions.
We also anticipate additional bills on pesticides, water resources and land use. We are monitoring closely bills that will change overtime labor laws and corporate tax reporting.
Rep. Witt has introduced HB 2724 at the request of the Coalition of Responsible Oregon Growers (CROP PAC). HB 2724 would establish an ongoing advisory committee to serve as an information source on policy issues related to Oregon crops that come before the legislature and/or the Oregon Department of Agriculture. Recently Rep. Witt highlighted HB 2724 in his newsletter.
Budget Shortfall Will Keep Legislators Busy
One of the largest discussion drivers throughout the 2021 session is the expected budget deficit. Oregon is looking at a budget hole of just north of $1 billion to maintain current service levels. This hole is within the state’s General Fund/Lottery Fund, which makes up approximately one-third of the entire state budget.
What to expect
In December, Gov. Kate Brown delivered to the Legislature her 2021-23 recommended budget. Legislative budget leaders and staff have already begun to review the document while also engaging agencies to evaluate current service level resources and demands. In the coming months, budget writers will likely deliver a “guiding principles” document for Joint Ways and Means Subcommittees to work from as they begin the various phases of agency budget review and development.
Oregon’s constitution requires that the state pass and maintain a balanced budget. As legislators grapple with how to reduce agency budgets to achieve this constitutional mandate, there are large unknown factors that will be complicating the process.
- Financial toll of wildfires. Clean-up estimates run beyond half a billion dollars, and the state will be doing all it can to maximize federal FEMA reimbursement to lessen the financial burdens on state resources.
- Federal funding for COVID-19. In addition, as Congress continues to pass legislation to aid with the impacts of COVID-19, Oregon will continue to receive federal funds. The amount of these funds are still being calculated, and the requirements – or attached strings – associated with accepting the funds are still being determined and reviewed.
- Upcoming economic forecasts. The next two quarterly revenue forecasts will also reveal the financial condition Oregon’s budget is in and whether the pandemic’s economic impacts are slowing or continue to erode state revenues for services.
Friday, June 26, 2020
First special session knocks out slate of COVID-19, police reform legislation
The first special session of 2020 largely stayed on course despite unique and challenging circumstances brought on by COVID-19. Even as Republicans pushed back on the lack of public input and interaction during committee hearings and both the House and Senate limited the number of people on the floor, nearly two dozen bills were on the path to passage Friday afternoon.
This is a far cry from the three total bills passed by the Legislature during the February session. Several of the bills were carryovers from that session, including Corporate Activity Tax revisions (HB 4202), forestry mediation mandates (SB 1602), and a cell phone surcharge to pay for broadband investment (SB 1603).
Building on recent momentum from protests in Oregon and nationally, the Legislature passed a package of bills that aim to increase accountability for police while eliminating tactics that have come under fire.
The use of choke holds and other restraint methods that restrict breathing during arrests was outlawed, as well as the use of tear gas and long-range acoustic devices. The Department of Public Safety Standards and Training must also adopt rules requiring an officer to intervene if they witness another officer in an unethical or illegal act.
Cases where physical force by police results in death or serious injury will be given to the Oregon Attorney General for review, and a statewide database of police disciplinary action will be created.
Much of the COVID-19 response relating to public bodies was packaged in HB 4212, which waives siting and zoning regulations for emergency shelters for 90 days, allows local governments to conduct meetings remotely, and establishes a low-income utility payment fund, among other things.
A pair of House bills also temporarily limit a lender’s ability to enforce default obligations and prohibit evictions for both residential and commercial properties for the duration of the health crisis.
Legislators briefly discussed liability protection for businesses, governments, and others complying with the governor’s executive orders, but the issue was sent to a work group for consideration at a future session. This is of specific concern for construction contractors who have stayed on the job site through the health crisis.
At least one additional special session is in the works for the coming months, though dates have not been announced. The liability issues in COVID-19 legislation will likely come back up, as will adjusting the budget for the remainder of the biennium. The next revenue report will be released in September, which could affect the timing of that discussion.
Wednesday, June 24, 2020
Legislators move forward with Special Session despite disputes over rules
The first Special Session of 2020 kicked off in unusual fashion Wednesday morning as legislators met as an assembly for the first time since February. It grew contentious before noon over safety precautions and procedural rules that will limit public input as the Legislature aims to address police reform and COVID-19 response.
The agenda for the session was included in a previous Pac/West newsletter and is under revision. The session is expected to conclude this week.
Senators and Representatives were called to order in their respective chambers for a first reading of bills. But, due to social distancing requirements, Representatives were forced to move in and out of the House Chamber in small clusters, sometimes on the third-floor gallery, to signal their presence and establish a quorum. This confused the usually simple process considerably.
The 60-member House were required to wear face coverings, while the 30-member Senate only requested them. Only two senators – Brian Boquist and Dennis Linthicum – declined to comply, which drew the ire of Senate President Peter Courtney.
“Either we all do this or we’re never gonna get over this,” Courtney said during a press briefing, pointing out that Senate Republican Leader Fred Girod (R-Stayton) was wearing a mask. “It marred a perfect day.”
As the morning went on, conflict arose over process. Time and again, Republicans expressed frustration over the process. For example, in the debate over adopting rules, Rep. Sherrie Sprenger (R-Scio) lamented that “minority reports” would not be allowed in this special session, as they are not typically permitted on joint special committees. Minority reports are one tool of the minority party to frame the debate on key issues by forcing a vote on its preferred alternative to a given policy. Rep. Duane Stark (R-Grants Pass) said he hoped this process that largely excludes the public and the lobby except for virtual testimony would not set precedent for future sessions. Despite these concerns, the rules were adopted.
The situation deteriorated further during the 10 a.m. Joint Committee on the First Special Session of 2020 – the only committee scheduled to meet during this session. On the first order of business, Sen. Girod (R-Stayton) voted “no” on the adoption of committee rules because public participation would not be permitted. Sen. Tim Knopp (R-Bend) joined him, but the rules were adopted nonetheless.
With some committee members in the room and others joining virtually from their offices, abnormal procedures drew questions from Republican members, including when debate would be allowed and how legislators could ask questions of panelists. This seemed to frustrate Committee Chair Sen. Courtney, but after questions were answered by the nonpartisan committee staff he moved ahead with the planned committee agenda.
Despite a clunky and rancorous beginning, the committee continued to hear testimony Wednesday morning. It will reconvene in the afternoon to handle the remainder of its agenda. The House reconvenes Wednesday at 5 p.m., but the Senate won’t meet again until Thursday morning.
The Pac/West team will continue to interact with legislators virtually while keeping clients apprised of developments.
Thursday, June 18, 2020
Oregon resumes reopening plan with face mask mandate in seven counties
Gov. Kate Brown is cautiously putting Oregon’s reopening back on course after a one-week pause to assess an early June spike in COVID-19 cases.
At a Thursday press conference, Gov. Brown and her coronavirus team provided an update on the state’s reopening plan and new face covering requirements. The decisions were made following a review of statewide health data that showed new hospital admission rates have not risen dramatically, though an undercount of five hospitalizations in Multnomah County was reported by OHA Director Pat Allen at the beginning of the press conference.
- Multnomah, Hood River, Marion, and Polk counties will resume reopening plans on Friday, June 19. Multnomah County will be the last to enter Phase 1 of the reopening plan, which allows dine-in, personal care and fitness, and small gatherings. The other three counties will enter Phase 2.
- Face coverings will be required in indoor spaces in Multnomah, Hood River, Marion, Polk, Washington, Clackamas, and Lincoln counties beginning Wednesday, June 24. Other counties may opt-in to the face mask requirement. Exceptions will be made for people with medical conditions and children under 12. This rule will be left to businesses to enforce, not law enforcement, Gov. Brown said. She added that face masks must become a part of every Oregonian’s daily lives.
- Moving forward, several counties will be grouped by region for reopening purposes. Multnomah, Washington, and Clackamas counties will be one unit, and Marion and Polk counties will be treated as another. This is because of their interconnected urban areas. Multnomah, Washington, and Clackamas counties will remain in Phase 1 for at least 21 days beginning Friday.
Gov. Brown again stressed personal responsibility as the best tool to keeping economy open, asking people to abide health safety measures and local businesses to enforce adherence. She also indicated the state may revert to tighter restrictions if the hospitalization rate isn’t curbed.
While face masks aren’t the only form of self-protection, they have a tangible effect on the spread of the virus if widely used. The graphic below, shared by Lane County, presents the range of COVID-19 transmission likelihood with face coverings and physical distancing in effect.
Tuesday, June 16, 2020
Special Session called to address police accountability and COVID-19 response
A Special Session of the Oregon Legislature that has been hinted at since the end of February finally has an official date: Wednesday, June 24.
Our team at Pac/West has been in regular communication with Gov. Kate Brown’s staff, legislative leadership, and key committees during the development of this session and are working to guide our clients through this unprecedented process.
Gov. Brown called for the session to address two heavy topics – police accountability and the COVID-19 pandemic. The governor also indicated a follow-up session later in the summer to rebalance the state budget in light of the recent economic forecasts that detail lost revenue and decreased economic activity for at least the next 18 months.
A memo circulating among legislators highlights a list potential bills for the June 24 session. It includes picking up legislation left on the floor at the end of February’s short session as well as codifying executive orders signed by Gov. Brown to address COVID-19.
- Creating a statewide database for police discipline
- Giving the Attorney General authority to lead use of force investigations
- Requiring officers to report bad behavior by other officers
- Banning the use of tear gas and other military tactics
- Outlawing the use of chokeholds
- Revisiting SB 1567, which addresses arbitration in cases of disciplinary action
- Addressing moratoriums on commercial and residential evictions, as well as foreclosure protections
- Increasing broadband to meet the needs of virtual schools
- Adopting rules for public meetings and local governments
- Protecting CARES Act payments
- Delaying mandatory court dates
- Revisiting HB 4001, which requires local governments to site qualifying emergency shelters
- Giving authority for low-income weatherization programs
- Making provisions for remote notaries
- Giving motels and hotels limited immunity from isolation requirements
- Redrafting the rural schools formula from HB 4044
- Extending the enterprise zone termination date until December
- Broadening use of Individual Development Account funds for COVID-19 relief
- Updating state-run meat processing plant inspection program from HB 4152
- Making technical fixes to CAT as relating to dairies from HB 4009
- Enacting limitations on Eastern Oregon Border Board grant funds from HB 4165
- Determining placement procedures for children in foster care
- Following up on Department of Forestry MOU from short session
Gov. Brown also said she is finalizing $150 million in general fund savings for the remainder of the biennium, which will be released later this week.
Specific guidelines for the session, including safety measures for the 90 legislators and necessary staff, are still in development and may also be released at the end of this week. The Pac/West Communications team will be engaging with the process to make sure our clients’ interests are met.
Friday, June 05, 2020
Emergency Board allocates CARES Act funding for individuals and businesses
The Joint Emergency Board on Friday allocated and authorized the spending of nearly $280 million in CARES Act funding to state agencies to cover costs related to COVID-19.
The State of Oregon received $1.39 billion in the federal package, and in April began allocating the funds to state agencies. Below is an overview of the Emergency Board’s actions this afternoon.
Assistance for Individuals – $134 million
- $90 million to the Housing and Community Services Department to cover rental, mortgage, and energy assistance programs. The funding includes two positions that provide rental assistance for landlords who have been impacted by income loss by tenants.
- $25.6 million to the Oregon Health Authority for behavioral health services for people disproportionately impacted by COVID-19. This includes culturally and linguistically appropriate services and outreach as well as one-time investments in bed capacity and opioid harm reduction efforts.
- $10 million to the Department of Administrative Services to fund an Oregon Community Foundation grant for workers who are ineligible for unemployment payments.
- $4 million to the Department of Justice for victims of domestic and sexual violence.
- $3.5 million to the Oregon Public Utility Commission to temporarily expand access to broadband and telephone services for low-income households.
- $1 million to the Department of Human Services to maintain 211 Info Services, which help people connect to services like housing, utilities, food, health services, and child care.
Assistance for Businesses – $93 million
- $63 million to Business Oregon for rural hospitals, personal protective equipment for small businesses, and technical assistance for underrepresented businesses. The rural hospital grants cover Type A and Type B hospitals, and the PPE is intended to help small businesses reopen safely.
- $30 million to the Department of Education and specifically the Early Learning Division to offer child care assistance as providers begin to reopen. This is intended to allow parents of young children to return to work.
Agriculture – $30 million
- $16 million to the Oregon Watershed Enhancement Board to reimburse growers’ costs for providing protective measures for workers. This includes $10 million for housing alternatives, $5 million for sanitation and $1 million for transportation.
- $10 million to the Department of Administrative Services for a worker relief quarantine to assist recovering workers.
- $3 million to the Oregon Health Authority for community outreach and education.
- $1 million to distribute personal protective equipment directly to workers.
Broadband – $20 million
- $20 million to Business Oregon will build the Rural Broadband Capacity Program to help business, innovation and trade across the state.
If you have any questions about these funding sources feel free to contact us and we will provide additional detail.
Friday, May 29, 2020
Legislative Days and Phase 2 reopening
Legislative committees gathered remotely this week to address the challenges facing Oregon’s departments, industries, and populations as the state is in the early stages of its slow-rolling reopening.
These hearings came on the heels of a dismal economic forecast presented last week, and as state agencies prepare to cut their budgets by as much as 17% in the coming year. They will continue next week in preparation for a potential special session in June.
Meanwhile, many counties are entering the third week of their Phase 1 reopening stage and the state is preparing to release a draft plan next week on what Phase 2 will entail.
Gov. Kate Brown’s office reported to a group of city and county government officials on Friday that draft plans include guided openings for more recreational activities such as miniature golf and bowling, modifications to the Phase 1 guidelines for restaurants, a limited opening for pools and tennis courts and possible overnight camping at some parks. Due to sanitation requirements, playgrounds in city parks will continue to be closed in Phase 2.
Limits on mass gatherings may increase in Phase 2, but a specific number was not discussed. Churches may fall under this, or solely under social distancing guidelines of 6 feet.
Counties currently in Phase 1 are likely to be approved for Phase 2, according to the governor’s office spokesperson Leah Horner. In order to move into Phase 2, counties will need to write a letter of intent that updates any changes or additions to contract tracing, shows that PPE is secured and notes any additional responses from Phase 1. Counties are on different timelines depending on when they opened and when they meet the 21 day requirement of the phase. When to apply for Phase 2 is up to each county.
PPE shortage remains a struggle
The House Health Care interim committee kicked off with a meeting Friday, May 22. After Director Pat Allen gave an update on the state’s pandemic response, the committee heard presentations on workforce impacts, vulnerable populations, telehealth services, and hospital systems.
A major theme of the discussion was the severe lack of Personal Protective Equipment. OHA Chief Medical Officer Dana Hargunani spoke to the state’s response, followed by blistering critiques from representatives of the Oregon Nurses Association and the Oregon College of Emergency Physicians who described the dangerous working conditions of health care professionals. Another theme of the day was telehealth, with most legislators and panelists expressing a need for permanent changes to telehealth access and reimbursement after the pandemic is over.
The final panel included a health economist who testified on alternative health system models (such as Maryland’s capitated all-payer model). The inclusion of this discussion provides a glimpse into what legislators are thinking for the future. We can expect continued conversations about the pandemic’s effect on Oregon’s health care system and ways to reform it for the future.
The House Behavioral Health Committee also held a meeting this week to discuss COVID-19’s impacts on Oregon’s behavioral health care. The pandemic has presented a slew of new challenges while exposing existing cracks in the system. OHA Medicaid Director Lori Coyner explained that coordinated care organizations are actively working to ensure behavioral health providers are able to stay in business and serve Oregonians on the Oregon Health Plan.
Finally, the House Judiciary Committee met this week, chaired for the first time by Rep. Janelle Bynum (D-Portland). Of interest to the health care community, this meeting was the first square-off between the business community and the trial lawyers over proposed COVID-19-related liability protections. Fawn Barrie, representing the Oregon Liability Reform Coalition and Oregon Business and Industry, explained how complying with the Governor’s Executive Orders put businesses at risk for all kinds of new lawsuits, with nearly 1,000 filed across the country. Businesses, including health care providers, that complied in good faith with federal and state government orders should be held harmless, she argued. The trial lawyers testified in opposition, but failed to clarify their specific policy position. This was not lost on the Chair, who pushed back and insisted the trial lawyers come back with specific issues for the legislature’s consideration.
CARES funding directed to agriculture
As counties have reopened, some in the Willamette Valley have experienced COVID-19 hot spots among agricultural workforces. The Oregon Health Authority is keeping the ag sector as a main focus to prepare for the harvest season.
On Tuesday, May 26, the House Ag and Land Use Committee discussed a $30 million allocation from the CARES Act to cover COVID-19 expenses in the ag industry.
The proposal is broken down into housing, sanitation and mitigation, and has been drafted with the participation of Governor Brown’s Natural Resource Policy Advisor Amira Streeter, Deputy Legislative Director Linda Roman, and a variety of state agencies.
As presented, $10 million will go towards hotel/motel vouchers and alternative on-site housing. This will allow that upgrades made to on-site housing in order to comply to the new rules can be reimbursed as a COVID-19 expense. Another $6 million will be allocated for field sanitation, which will be for hand washing stations and additional portable toilets, which are currently experiencing a market shortage. Additionally, $1 million will be allocated towards social distancing in transportation.
There will be a total allocation of $14 million for the mitigation of COVID-19, including $10 million to a quarantine fund that will give workers who become sick access to funding for missed work. Outreach and education, along with a mask and sanitizer program, will make up the additional $4 million. The mask and sanitizer program has already launched in the Willamette Valley.
Representatives from the Governor’s office said they are being creative and working quickly to get this program launched to match the new OSHA temporary rules that go into effect on Monday, June 1. This will ensure farmers will be able to get reimbursed for things they need to do to comply to the new rules. They said the Oregon Watershed Enhancement Board was the best fit for the reimbursement program as it is already set up for the grant programs.
Friday, May 22, 2020
Legislators get look at hard economic reality
This week’s revenue forecast made official what we’ve all been anticipating for months – the harsh economic realities caused by COVID-19.
Now that the report is compiled and legislators have more hard data and forecast models to work with, the gears are turning at a faster pace to address funding shortfalls and gaps. A special session is being planned for June to make funding decisions. State departments and agencies have been asked to prepare a plan to cut their budgets by 17%.
Meanwhile, legislative committees are meeting this week and next to discuss the ongoing impact of COVID-19 on all aspects of state government.
Ultimately, the state’s reopening plan will play the largest role in economic recovery. Business and industry is critical to lightening the unemployment burden and increasing revenue. The majority of counties have been approved to enter Phase 1. Multnomah and Washington are two major exceptions and have yet to apply for reopening, while Clackamas has applied and is waiting for the state’s approval.
A few takeaways from the economic forecast:
Not every area will see the same impacts
- The hardest hit areas are the North Coast, Central, and Southwestern portions of the state, primarily because of the impact on tourism. As travel resumes in the future, these areas will make their comeback.
- Future headwinds show longer lingering struggles for the Northeast, Southeast, and Columbia Gorge portions of the state where natural resources and manufacturing play a significant role in the economy.
- The Central, Willamette Valley, and Metro areas are expected to have the least long-term impacts.
- Legislative leaders are indicating they want to help Oregon recover through targeted investments in areas hit the hardest.
Recovery will take time and affect sectors differently
- About 38% of the lost economic activity will see a quick rebound within the first year, and slower growth is expected after the initial first-year rebound.
- It will take about four years to get back to early 2020 economic conditions.
- Hardest hit sectors (both short and long term) are retail, manufacturing, natural resources (value-added ag), and construction.
- Permanent damage is expected to hit manufacturing, natural resource (value-added ag), and construction sectors.
- Nationwide economic vendors show quick rebounds for the stock market – less than half as long and deep as in the 2007 recession.
Revenue will be unstable for at least half a decade
- The impact on state revenue and budget will last through at least three bienniums, with the biggest toll beginning in July 2021.
- 2019-21 biennium shortfall estimated at $2.698 billion.
- 2021-23 biennium shortfall estimated at $4.384 billion.
- 2023-25 biennium shortfall estimated at $3.381 billion.
- CAT (Gross Receipts Tax) Anticipated Revenue Shortfall
- 2019-21 shortfall of $414.1 million.
- 2021-23 shortfall of $599 million.
- 2023-25 shortfall of $489.1 million.
- Effective Reserves
- As of today the Education Stability Fund (ESF) and Rainy Day Fund (RDF) are at $1.586 billion, or 8.15% of the general fund. That’s expected to increase to $1.750 billion, or 9% of the general fund, by the end of the biennium. This is largely because the 2020 Legislative Short Session ended without any additional funding commitments.
May 2020 Primary Election Results Edition
Oregon votes by mail in critical primary
As other states scramble to offer voters the ability to turn in ballots by mail as a way to stop the spread of coronavirus, Oregonians again tapped into its vote-by-mail system in the 2020 primary on Tuesday.
Voter turnout surpassed 42%, the highest in a year with an incumbent presidential nominee since 2004. (In both 2008 and 2016 the turnout was greater than 53%).
The primary election identified front-runners in key statewide and district races, and set up a few interesting battles for highly contested seats. Below are some of our takeaways from Tuesday’s primary election.
U.S President – Democratic Primary
Biden continues on path to nomination
With other prominent candidates out of the race, the Democratic vote is now Joe Biden’s to lose. While he is likely going to be the Democratic nominee, enthusiasm seems to be tepid among key voter groups, including young voters who are driven more by ideology than party loyalty. As a group they are also more ideologically progressive than Biden, and he will need to earn their support to win in November.
Some supporters of Sen. Bernie Sanders are still hoping for a contested convention. It takes more than 50 percent of total pledged delegates (1,991) to win the nomination, and with the win in Oregon, Biden has 1,507 declared delegates. It is possible that Biden comes to the end of the primary season with less than 50 percent of the delegates, in which case delegates accrued by candidates who have left the race may be “released” and are free to vote for one of the front runners, Biden or Sanders. However, especially considering public support from Sanders, it is much more likely that Vice President Biden will emerge from the primary election as the Democratic nominee.
Success in the general election is less certain. In a recent ABC News/Washington Post poll, only 24% of Biden’s supporters say they are enthusiastic about him, compared to 53% of Trump’s supporters. Biden needs the young, progressive vote if Democrats are going to take the White House in November, and he knows it.
On May 14, Biden tweeted, “A united party is key to winning the White House this November.” This was linked to an article detailing his partnership with Sanders to build new, policy-focused task forces to shape the Democratic party’s agenda in 2020. The task forces are made up of 48 lawmakers, labor leaders, economists, academics, and activists who will serve on six committees: climate change, criminal justice reform, education, the economy, health care, and immigration. Progressive voters who were dismayed to see Sanders drop out of the race will be encouraged by the participation of his allies in these task forces. Strong proponents of Medicare-for-All and a Green New Deal, such as Reps. Alexandria Ocasio-Cortez (NY) and Pramila Jayapal (WA) will be co-chairs on these committees.
2nd Congressional District – Republican Primary
Bentz emerges from crowded GOP field
Former State Sen. Cliff Bentz won the closely watched Republican primary for Oregon’s Second Congressional district, which saw 11 candidates seeking the seat vacated by Rep. Greg Walden’s retirement.
The highlights of the race focused on the top four candidates, Bentz (Ontario), former state representative and gubernatorial candidate Knute Buehler (Bend), former state senator Jason Atkinson (Jacksonville), and Right to Life backed candidate Jimmy Crumpacker (Bend). All candidates ran on a Pro-Trump and Pro-Gun platform. In the end, the heavy direct mail campaign of Bentz, a tactic still viewed as highly effective in rural Oregon, pulled through with 31.5% of the vote to runner-up Buehler’s 22%.
The Second Congressional district is seen as a stronghold for Republicans, and Bentz is almost guaranteed the victory in November. Since 1998, Republicans have carried every general election with between 65%-70% of the vote except in 2018 when Walden claimed 56.3% against challenger Jamie McLeod-Skinner. Since 1893, only 2 of the 16 congressmen have been Democrats. However, eyes will be focused on the boundaries of the Second District as strong a Democratic majority will likely control the state legislature during the decennial redistricting process in 2021. Areas like Medford, Bend, and the Columbia Gorge near Hood River have seen significant population changes.
Hass, Thatcher prepare for SOS showdown
The closest statewide race of the night was for the Democratic nominee for Secretary of State. Mark Hass, a former TV news reporter and state senator, is the presumptive winner by about 3,000 votes. The Oregonian called it for Hass on Wednesday morning.
Hass won a third of Oregon’s counties, including all three metro counties, to secure a narrow victory over Shemia Fagan and Jamie McLeod-Skinner. Fagan’s support came from Lane and Benton counties, home to two of the largest state universities, and McLeod-Skinner won nearly every county in the Second Congressional District where she campaigned for Congress in 2018.
Fagan finished second in about half the counties where McLeod-Skinner won, including the most populous Second Congressional District county of Deschutes County. If Fagan had picked up those votes, and especially the progressive female vote, the result may have swung in her favor.
A recount is triggered if the vote differential is less than 0.2%, and Hass sits at a 0.6% advantage after late night returns, meaning his nomination is secure.
On the Republican side, Kim Thatcher handily won the nomination with 85% of the vote. Secretary of State is the only statewide position held by a Republican. Bev Clarno, who was appointed to replace Dennis Richardson after his passing, vowed not to run for the seat.
Parties look to gain ground with open seats
Following two legislative sessions defined by ideological differences about carbon emission taxes, both parties enter the 2020 election cycle looking for any edge in the Capitol.
For Democrats, that means maintaining a supermajority and keeping the pressure on vulnerable GOP members to coax difficult votes. They did this in part by filing a candidate in every House and Senate race. But there was also an upswell of in-party challenges following a vote to reduce PERS contributions.
For Republicans, it means targeting any weak seats in hopes of chipping away at the majority party’s grip. The party also dealt with the departure of several prominent leaders, including minority leader Herman Baertschiger.
Below are some of Tuesday’s primary election winners who will play key roles in November’s general election.
Senate District 2 – Republican Primary
Conservative activist and biochemist Art Robinson claimed the Republican mantle in the Southern Oregon district by a 12-point margin over Jolee Wallace. He will face Democrat Jerry Allen in November, and assuming he wins in the heavily Republican district, it will mark his first general election victory after five attempts to take a seat in the U.S. Congress. Robinson had a fundraising edge, including a $25,000 loan of campaign funds from his Congressional PAC. The seat was formerly held by minority leader Herman Baertschiger who helped orchestrate the Republican walkouts of 2019 and 2020 and then announced his retirement.
Senate District 18 – Democratic Primary
Democratic Senate Majority Leader Ginny Burdick easily handled upstart challenger Ben Bowman in the Southwest Portland District, defusing an enthusiastic campaign by gaining 70% of the vote. Bowman earned the support of the Portland teacher’s union following Burdick’s support of retirement benefit cuts, but the incumbent’s popularity in the district and deep campaign pockets were too much to overcome, especially in the final Get Out The Vote portion of the campaign.
House District 3 – Republican Primary
In a race that saw Southern Oregon Republicans split their endorsements, Lily Morgan – backed by Sen. Dallas Heard, Rep. Gary Leif, and Rep. Tim Knopp – secured a sound victory over Zacharie Maynard, endorsed by Sen. Herman Baertschiger and Sen. Brian Boquist. Maynard had a slight fundraising edge with $53,000 to Morgan’s $47,000, but more than half came directly from Friends of Herman Baertschiger. Morgan was also able to tout her experience as a Josephine County Commissioner against Maynard, who has no previous political experience.
House District 9 – Democratic Primary
The Democratic heir apparent to retiring Rep. Caddy McKeown, Cal Mukumoto earned a bevy of endorsements (including McKeown, Sen. Arnie Roblan, Oregon Education Association, and Planned Parenthood) and even stashed away nearly $10,000 for a general election battle with Republican Boomer Wright. This is significant because House District 9 on the central coast is very much in play for both parties, with a 1.2% Democratic margin.
House District 17 – Republican Primary
Lebanon farmer Jami Cate rose to the top of the crowded Republican field aiming to replace Rep. Sherrie Sprenger, who stepped down to run for Linn County Commissioner. Cate outpaced the rest of the candidates by raising $70,000 and appealing to the moderate base in the district with a 13-point Republican advantage. (Sprenger also won the Republican nomination for county commissioner).
House District 32 – Republican Primary
In a district up for grabs with a narrow 6.5% Democratic voter advantage, Tillamook Mayor Suzanne Weber made a strong opening statement with a wide range of endorsements (Timber Unity, NRA, North Coast First PAC) and over $57,000 raised. She earned about 80% of the vote but about 1,000 fewer votes than her soon-to-be Democratic rival Debbie Boothe-Schmidt.
House District 32 – Democratic Primary
A North Coast business owner and community leader, Debbie Boothe-Schmidt raised nearly $75,000 in her bid to keep the district in Democratic control and has reserved more than $20,000 for the general election showdown with Suzanne Weber. She picked up the endorsements of OEA, Oregon League of Conservative Voters, and AFSCME.
House District 33 – Democratic Primary
In a race that boiled down to doctor vs. lawyer, pulmonary physician and critical care doc Maxine Dexter beat out civil rights attorney Christina Stephenson. Dexter earned an impressive list of newspaper and labor union endorsements and the nomination by 11 points in the reliably Democratic district. Serin Bussell and Andy Saultz each picked up about 16% of the vote in the four-way race. The seat was held for 17 years by Rep. Mitch Greenlick, who had previously announced his retirement and passed away on May 15.
House District 42 – Democratic Primary
Rob Nosse successfully fended off a challenger from the left in Paige Kreisman, who ran in response to the incumbent’s vote to reduce PERS benefits for state employees. Nosse’s list of supporters is long and his war chest is deep, giving him a better than 30-point edge in the primary. A general election is all but assured, as Republicans failed to run a candidate in the primary.
With the votes counted, it’s becoming clear who had good nights and who had bad nights.
- Incumbents had a good night, as no challenger in a House race or higher was successful in overtaking the sitting representative. Incumbency and name recognition are hard to beat.
- Progressive Democrats had a bad night. The party leaned toward the middle in key primary battlegrounds, and voters were not willing to upset the apple cart. Without the “Bernie” factor, emphasis shifted.
- Conservative Republicans had a good night. The GOP moved to the right in legislative primaries, picking candidates who positioned themselves as the furthest from the Democratic supermajority.
- Public employee unions had a bad night. A significant player in state politics, unions backed several winning candidates but also supported failed campaigns for Secretary of State (Shemia Fagan), Senate District 18 (Ben Bowman), and House District 36 (Laurie Wimmer).
Tuesday, May 19, 2020
An election day in unusual times
It’s been a strange campaign season to say the least. Door knocking, public events, even handshakes – some of the most trusted tools of a candidate – just weren’t an option in April or May.
But primary election day is here nonetheless, and many of Oregon’s districts have heated races to determine who will carry the party flag into November.
We’ll be watching the results closely this evening with our eyes on a few races and trends in particular:
- Voter Turnout. Oregon has already surpassed its 2018 primary election voter turnout with 35.1% as of this morning. It was 33.9% when the primary polls closed last time. The vote by mail system allows us to gauge electoral interest in near-real time, and it doesn’t appear we will see a major shift in the number of voters.
- Race for Congress. Congressman Greg Walden’s retirement has led to a highly contested race in Oregon’s 2nd Congressional District. Eleven Republicans are vying to become the successor to the 11-term representative, while five Democrats are looking to make it interesting. In Oregon’s only comfortably Republican Congressional district, four front-runners have emerged: former state legislators Jason Atkinson, Cliff Bentz, Knute Buehler, and political newcomer Jimmy Crumpacker. How they fare in the expansive and diverse district (more than 70% of Oregon’s land mass) without the ability to tap into a traditional campaign will be interesting to see.
- Presidential politics. Both parties have all but secured their candidates for November, though Democrats have four choices on their ballots – presumptive nominee Joe Biden along with Bernie Sanders, Elizabeth Warren, and Tulsi Gabbard. Biden’s biggest challenge now is building voter enthusiasm, and tonight’s result will reveal the work he needs to do in the coming months before and after the national convention to build a wider coalition of support.
- Oregon legislature. February may have felt like a lifetime ago, but ripples from the abruptly ended 2020 legislative session are playing out on ballots statewide. Key retirements have left 16 seats open, some for the first time in years, and Democrats have made the push to run a candidate in every race.
- Secretary of State. Three state senators – Democrats Shemia Fagan and Mark Hass and Republican Kim Thatcher – are all running for the open Secretary of State seat, which is currently the only state-wide position held by a Republican (Bev Clarno, who replaced Dennis Richardson after his passing). Jamie McLeod-Skinner is the third candidate on the Democratic ticket, and rose to prominence in 2018 in a campaign against Greg Walden in the 2nd Congressional District.
We’ll follow the results tonight and send a report Wednesday morning on how these candidates finished the first lap as they prepare for the long run to November.
Friday, April 24, 2020
Oregon Emergency Board approves COVID aid
The State of Oregon has received $871 million — its first allotment of federal money from the CARES Act — and the Emergency Board begin to direct the funding to programs around the state on Thursday.
Lawmakers on the board handed authority to Gov. Kate Brown and the Department of Administrative Services authority to spend $300 million of federal aid once it has set guidelines and processes. The board also approved an emergency aid package that touched on a range of issues relating to COVID-19.
The federal government provided guidance on how the $1.6 billion can be spent, which Legislative Fiscal Officer Ken Rocco explained to the board. Expenditures must have been incurred due to the COVID-19 public health emergency, not already have been funded in budgets as of March 20, 2020, and be incurred between March 20, 2020 and the end of the calendar year.
The city of Portland, Multnomah County, and Washington County are eligible for $200-$300 million of the total $1.6 billion, according to LFO estimates. The Oregon executive branch is developing a plan and process for identifying items that qualify for reimbursements and how to assist other local governments through the state’s portion of the funding.
Small business assistance
The board approved $10 million for small businesses (25 or fewer employees) that haven’t been able to access the federal Paycheck Protection Program or other CARES Act provisions. Up to $5 million can be used as a 1-to-1 match to leverage local business assistance funds.
The Oregon Business Development Department would contract with Community Development Financial Institutions to operate the program, and businesses would apply to the CDFIs for grants or loans to help meet costs incurred during the current emergency. These funds would extend small business assistance to certain businesses that have not received assistance under the federal CARES Act.
Rural legislators pointed out many of these CDFIs are located in the I-5 corridor and the money may not be distributed equally into their districts, and that a high benchmark of 25 employees will cause the funds to be used up quickly.
“What I am really concerned about is that we are going to create an expectation among small business owners that we are going to be able to provide a lifeline that perhaps isn’t there,” said Rep. Greg Smith. “$10 million, when you divide it among the many businesses who are going to need assistance because they are not able to access the SBA programs, this is going to get spread pretty thin.”
Rural hospital funding
A proposal to direct $50 million in federal funding to zero-interest loans for rural hospitals was tabled after lawmakers from both parties questioned making hospitals repay the money. Hospitals have suspended elective procedures and other functions for more than a month and the financial toll is mounting.
“We would look so incredibly foolish if we allowed hospitals to go bankrupt during a global pandemic,” said Sen. Betsy Johnson. “The way this is constructed right now, I’m not sure I can support it.”
Lawmakers voted to delay the proposal and potentially consider a revised version.
On a 15-5 vote, the board created a $10 million wage replacement fund for unemployed workers who can’t get routine unemployment insurance because of their immigration status. The fund would pay up to $595 a week through community agencies around the state.
Lawmakers questioned using as much as $1 million on administrative costs to distribute the funds before ultimately approving the program.
“These are tough times and we need to make sure we know exactly who is receiving this money and why and how they’re qualifying, whether it’s for businesses or individuals,” said Rep. Duane Stark. “I’m a little concerned with the price tag on administrative portion of this, that out of $10 million, $1 million can go to setting it up for such a short-term program.”
Other funding was dedicated to:
- $12 million for housing. $8.5 million will go directly to landlords on behalf of low-income renters, and the rest will pay for hotel rooms for farm workers or people without stable housing.
- $3.35 million to long-term care facilities. It will help pay for coronavirus testing and infectious disease prevention training.
- $2 million to domestic and sexual violence victim support. Grants will be given to organizations around the state focused on housing.
March 12, 2020
Special Session—What we Know
We believe there will likely be a special session sometime in May after the revenue forecast when the leadership can analyze what budget issues still need to be addressed. There are still important policy bills that need to be passed for foster children and the homeless, and several other bills with bipartisan support in both chambers. From earlier comments from leadership, the special session could last up to three days.
Cap and Trade by Executive Order
After a failed attempt by the Democrats to push through Cap and Trade policy (SB 1530) during the 2020 short session and a Republican walkout, Governor Kate Brown convened funding for at least part of the Cap and Trade package by allocating $5 million to the Department of Environmental Quality to take action to reduce greenhouse gas emissions across all sources. This will fund 10 permanent positions. In addition, the Governor’s Executive Order will update existing state carbon emissions goals and sets a standard of 45% reduction from 1990 levels by 2035 and an 80% reduction from 1990 levels by 2050.
The order also directs state agencies to:
- Double Oregon’s Clean Fuels Program
- Increase energy efficiency requirements for new buildings and appliances
- Create a plan to increase the usage of electric vehicles
- Require DEQ to set caps on transportation fuels, natural gas, and large industrial polluters
The order will not allow the creation of a marketplace to sell carbon credits that was included in SB 1530.
CAT Fixes Through Rulemaking
Following the walkout, it was unclear how the CAT technical fix bill (HB 4009A) would be affected. But it looks like several of the amendments can be brought in through the rules process.
We will be having a round table with members of the Ag coalition and the DOR at the end of the month to discuss policy fixes in HB 4009 which included an exemption for crop insurance payments, an alternative cost of goods sold (cogs) calculation for the 35% subtraction on expenses that will also allow the use of a prior year estimation on those who work with cash accounting and provides options for growers to receive a wholesale certificate when determining the amount of their commodities that are co-mingled and/or exported out of state.
ODA Rules Advisory on Chlorpyrifos
The end of the session was also the end of HB 4109, a bill to ban chlorpyrifos. Prior to the short session, ODA had convened a rules advisory committee (RAC) comprised of farmers, growers, environmental representatives and regulators. With the death of HB 4109, ODA plans to reconvene the RAC and move forward with possible draft rules to put stronger restrictions on the use of chlorpyrifos, while still having it as an option for crops that currently have no other alternatives. The EPA is set to rule on the restrictions of the pesticide by 2022 and the main manufacturer, Corteva, has announced they will no longer offer the pesticide in the United States. The goal of the RAC is to come up with a compromise agreement, but that is still not a guarantee that the legislature will not chose to reintroduce another bill to ban chlorpyrifos through a committee as a priority bill.
March 2, 2020
Deadline looms as legislation awaits vote
For the second consecutive legislative session, Republican lawmakers used a walkout to stop the Democratic super-majority’s efforts to pass cap and trade legislation through the Capitol. Republicans attempted to amend Senate Bill 1530 with three amendments, including one that would have sent the bill to voters. Democrats in the Joint Ways and Means Committee voted down all three, triggering walkouts by both Senate and House Republicans last week.
Meanwhile, other legislation has continued to move through committees and referred to the floors, where it has piled up without a quorum to hold a vote. This logjam will have to be dealt with one way or another as the session reaches its mandated end point on Sunday, March 8 at 11:59 p.m.
This may lead to frantic floor sessions this week if Republicans reach a deal and return to the Capitol, or it could mean the majority of bills are killed and swept away for a future session.
The last week will be a sprint to the finish line, though there may be a special session in the works if the end-of-session deadline passes with important legislation still outstanding.
Oregon response team to address coronavirus
The country’s attention turned to the coronavirus last week as the first cases were reported in the U.S., including a confirmed case in Oregon on Friday. Gov. Kate Brown convened a response team that will work to prepare and educate the public for a potential large-scale outbreak.
Ag amendments to CAT fix still have life
Following the walkout, it was unclear how the CAT technical fix bill (HB 4009A) would be affected. But it looks like several of the amendments can be brought in through the rules process if the bill dies in session. These definitions would be narrowed, however, since statutes cannot be changed through rules without the legislative process.
Last week the -25 ag amendments were adopted in committee and are mostly focused on clarity for growers and an amendment for a small group of dairies.
Meanwhile, HB 4109 – the bill to ban chlorpyrifos – had concluded testimony in the Senate Environment and Natural Resources committee on Tuesday. The bill was passed to the Senate floor for a vote following a work session. It had passed the House last week on a slim margin with four rural Democrats joining Republicans to try to adopt the Minority Report which would have kept the restrictions but eliminated an outright ban. It would have had ODA continue their rules advisory committee looking for alternatives. There is not a quorum to move it along in either chamber.
Both the CAT and the Chlorpyrifos ban were continued from the 2019 session.
February 24, 2020
With two weeks left, session hinges on next few days
The only thing certain about the Legislative Session last week was the amount of uncertainty. Tensions from the previous weeks and months remained strong as legislators worked at a lightning pace to move bills out of committee, while Republicans applied the brakes as the majority of the caucus skipped the House floor session Tuesday.
The specter of a Republican walkout still hangs over the Capitol, and with just two weeks remaining before Sine Die, it’s likely this will be the week we find out if it will happen or not. Select Democrats may even join in opposition to the controversial cap and trade legislation. The strategy could kill a host of other bills, whether through negotiation or the session’s time limit.
Whether a set of amendments are enough to keep legislators in the building is yet to be seen. As the cap and trade bill moves to the Ways and Means subcommittee Monday, negotiations continue behind the scenes.
Chlorphyrifos ban bill passes House
House Bill 4109, which bans the aerial application of pesticide chlorpyrifos, passed the House on Wednesday and was fast-tracked to a public hearing on Friday in Senate Environment & Natural Resources. Rep. Boshart Davis introduced a minority report in the House which sought to do everything in the bill without initiating an outright ban, giving the Oregon Department of Agriculture and their Rules Advisory Committee time to finish their work and report back to the legislature in 2021. It would have allowed restricted aerial spraying on crops that have currently have no alternatives and on a permitted basis. The report failed 32-24, with all Republicans and four rural Democrats voting for it.
If it passes the Senate, HB 4109 would ban the aerial application of chlorpyrifos; require 300 foot buffers around schools for the application of chlorpyrifos; increases the restricted entry interval for agricultural workers to 8 days after an application of chlorpyrifos and ban the sale or use of chlorpyrifos in Oregon in 2022.
The Senate hearing on Friday night brought growers and licensed pesticide applicators to the Capitol to testify against the bill. Because of the large number of people wanting to testify the hearing will be continued on Tuesday for those who were signed up and time did not permit their testimony. A possible work session could be as early as Tuesday as well which could move the bill to a Senate floor vote.
Testimony can be submitted at email@example.com.
CAT fix bill headed to a floor vote
This week the House Rules committee moved House Bill 4009, the Corporate Activities Tax technical fix, to the floor. The committee adopted the -16 and -25 amendments.
The base bill from last session (HB 3427) created a commercial activities tax on in-state sales over one million and $250 plus 0.57% of in-state sales would be taxable so any commodity being sold and shipped out of state is exempt for the CAT and any commodity being sold in-state that is under the gross receipts of $1 million also would be exempted.
The Department of Revenue has been writing rules on how this tax will work for various businesses.Temporary rules can be found at https://www.oregon.gov/DOR/about/Pages/rules.aspx.
For the agriculture sector, the adopted -25 amendment will exempt crop insurance payments and certain dairy sales of milk. It will provide for an alternative cost of goods sold calculation for the 35% subtraction on expenses for certain farm businesses.
Assuming a quorum remains, HB 4009 as amended will move off the House floor and on to the Senate.
February 17, 2020
Oregon’s birthday marks session’s midpoint
The first stage of the 2020 Oregon Legislative Session concluded this week. Bills that had not moved out of their originating committee by 5 p.m. on Friday – coincidentally, Oregon’s 161st birthday – were considered. The only exceptions are bills in the Joint Ways and Means, Rules, and Revenue committees, which are viable until the final day of the session.
Meaningful policy discussions have continued to be largely muted by the furor surrounding cap and trade legislation. Last week saw a series of meetings between timber executives and environmental groups that led to a promising announcement of a compromise on forest management. But the agreement relies on passage of House Bill 4109 (more details in the Natural Resources section of this legislative update), and Republicans are wary it is a tactic to force a vote on the cap and trade bill.
The Republican walkout strategy is still very much in play, as the Senate Republicans’ only method of blocking a bill’s passage is to deny a quorum by not showing up. March 8 is Sine Die, the last day of the short session. With less than three weeks to go, we’ll know very soon which path this legislation – and the 2020 session – will take.
Cap and trade moves out of committee
On Thursday, the controversial cap and trade bill SB 1530 moved from the Senate Environment and Natural Resources to the Ways and Means committee on a party line vote. A similar bill, which aims to reduce Oregon’s carbon emissions, was the subject of a Republican walkout last session. Republicans have stressed they are philosophically against the bill as it penalizes areas of the state that are not responsible for the emissions and have wanted the bill referred to voters, among other things.
After their early February rally, Tiber Unity presented a list of ideas to the Governor that became part of Thursday’s amendment. It includes a phase in on transportation fuels that starts the program in Portland and brings on Eastern Oregon counties in 2025 and the counties of Coos and Curry, along with the cities of Bend and Klamath Falls in 2028.
Also in the amendment was a co-mingling of other amendments such as a priority of fleet replacement to those profiting from the program to buy electric vehicles and clarity in the public records language aimed at shielding what Democrats have called “trade secrets,” which has received much criticism from Republicans.
It remains to be seen if the Republicans will stay in the building and give Democrats a needed quorum to pass out this legislation, but it appears doubtful. Giving a nod to the work of the Democratic Chair Rep. Power, three House Republicans in the committee on Energy and Environment walked out of committee as a symbolic gesture as the committee moved a carbon reduction placeholder bill, HB 4159 to the House Rules committee.
SB 1530 has its first Ways and Means subcommittee meeting Monday at 4:45 p.m. and a work session Tuesday at 11 a.m.
Chlorpyrifos ban passes Healthcare Committee
After a public hearing earlier in the week, the House Committee on Health Care passed House Bill 4109, a bill to ban Chlorpyrifos, on a party line vote on Thursday. Republicans tried to substitute the -3 amendment which was supported by many in the ag industry, but it was not adopted.
The amendment addressed concerns of health exposure risks to workers and bystanders by maintaining school buffers, enacting an eight day restricted entry interval and align language with the federal Worker Protection Standard by disallowing all aerial application of chlorpyrifos except for crops that need it to maintain access to international markets or in the event of a pest emergency.
Although not scheduled, we have learned that a House floor vote will occur on Tuesday. The bill will then move to the Senate Health care committee where it could meet a more tepid approval of an outright ban.
Many in the industry would like to see the results of a rule advisory committee being conducted by the Oregon Department of Agriculture on safe usage before enacting an outright ban. Because there is a decline in the usage of Chlorpyrifos, the lead manufacturer Corteva announced recently that they will stop manufacturing the product at the end of the year. There is research being conducted on alternatives, but for industries that currently don’t have another alternative they would like to continue restricted usage while this research continues.
CAT offers no exemptions
Multiple groups sought exemptions from the Corporate Activity Tax, but Chair Nathanson of the House Revenue Committee made it clear from Day 1 that no one was getting one, and despite some technical fixes, she has stuck to her word. The philosophy behind this is “broad base, low rate,” and erosions to that base necessitate an increase in the rate to keep up with promises made in order to pass the bill last year.
With that said, it was important to keep the conversation moving forward about what is reasonable, and both Democrats and Republicans have sympathized with these requests even though collections have just begun. Adding to the uphill climb, the actual revenue figures from the new tax were lower than initially projected, leaving budget-writers to find other pots of money to backfill the promises made.
Short session is a difficult time to make substantive revenue and budgetary changes, especially on the heels of enacting the new tax. However, there are multiple opportunities in 2021 to continue making this case, on top of finding other ways to boost provider recruitment efforts to the state.
Revenue forecast keeps increasing
The state’s revenue forecast was released Wednesday and shows Oregon on increasingly solid footing, with better-than-expected general fund revenue led by an increase in estate taxes.
The forecast predicted $183.4 million more in general fund and lottery funds than in the December forecast. Along with the sharp increase in estate taxes (twice as large as the previous record and $87 million more than the previous quarter), both personal income tax ($36 million) and corporate tax collections are also expected to come in above previous forecasts.
February 9, 2020
HB 4009—CAT Technical Fix Bill
The CAT technical fix bill (HB 4009) had a hearing this week in House Revenue. As I indicated to you at the Board meeting last week, Oregon Farm Bureau would be asking for two considerations for amendments. Many of the issues that had been brought to the Department of Revenue (DOR) have been taken care of in the rulemaking such as the wholesale certificates and the base for the prior year’s taxes for estimates.
The rules posted by DOR thus far can be found here>>> Please note that one more set of Rules will be coming out in March.
In the hearing this week Jenny Dressler with Oregon Farm Bureau (OFB) and on behalf of the AG Lobby and workgroup brought up two concerns.
The first concern was on the calculations of cost of goods (COGS) to qualify for the 35% subtraction rate. Jenny explained that many farmers will use a cash accounting method so the definition for COGS under the federal code does not apply for financial recording done on a cash basis. She recommended deferring cost input for those affected but noted not all farmers will file with cash accounting.
The second recommendation made was that there be clarification in the resell certificate due to comingled goods. OFB noted that the rules adopted by DOR had taken care of the concerns for a “general certificate” and recommended the committee consider a two-tiered approach for the technical fix bill. The two-tiered approach would allow a second option for those unable to get a general certificate for comingles goods that they could use an industry average. She suggested this could be a check box on the form but noted that this may take a statutory change.
In closing she told the committee that the definition of “wholesaler” also needs clarification in the CAT and asked that DOR investigate this for more clarification that is consistent through the tax codes and statutes.
SB 1530—Carbon Reduction Bill (Cap and Trade)
As many of you know the big news this week was the “Timber Unity” rally at the Capitol where members of AG, Trucking, Manufacturing and Forestry came together to protest SB 1530 with a large attendance and a convoy of hundreds of trucks that circled the Capitol. SB 1530 is an amended version of HB 2020 from last session that lead to the Senate Republicans walking out at the end of session. Many from the natural resources industries will agree that SB 1530 is improved from HB 2020, but it still could have unknown impacts on the industries.
Proponents of the bill will note that many amendments have been made to the bill and that it is not the same bill as HB 2020. The changes to the bill include a phase-in to the bill which will begin in Portland. Up to 60% of rural areas of the state are exempt in the amended version. 25% of the profits will benefit natural resource industries including help on enhanced irrigation methods, solar paneling and financial support for communities effected by wildfires. They also noted that many of the rural areas of the state will be exempt on transportation fuel with refunds given for off road farm and forestry fuel usage. Proponents note the committee has worked hard to address concerns of rural Oregonians.
Opponents of the bill including Republican Legislators and former State Rep. Julie Parrish who now represents Timber Unity voiced concerns with passing large policy changes in a short session. They noted concerns over sections of the bill having exemptions for public records request while citing “trade secrets” and asked for more transparency in the bill. Senator Hermann Baertschiger said he had reservations that legislative fiscal can’t give a firm answer on what the value of the credits will be which he said would be problematic to both the business receiving the credits and the state.
Parrish told the committee that Timber Unity had met with Governor Kate Brown earlier in the day and had brought forth options that would not cost Oregonians additional money. She said those included planting trees on the state highways for sequestration, reduce roads miles by public procurement or buy locally rather than taking lowest bidder for state operating products, bonding from the state to reopen Willamette Falls Locks, instate recycling including wood products and accelerate fleet upgrades while exempting small businesses. She also questioned in closing if SB 1530 and Cap and Trade in general is more about raising money for state coffers or reducing carbon.
Both proponents of SB 1530 and opponents agree that something needs to be done to reduce carbon emissions, but they have very different paths to reaching these goals. Both also will agree that any Cap and Trade legislation is highly complex. Due to this complexity the legislators say it is their elected duty to pass legislation while others would like the emergency clause removed and the bill sent to the voters.
The Senate Environment and Natural Resources Committee held three days of hearings (including Saturday) in order to hear all testimony while hundreds of written testimonies were also submitted for their review. You can view the written testimony here >>>
We anticipate SB 1530 will move from its first chamber and it is scheduled for a work session on February 11 which is its final committee vote before going to the Senate Floor. If it passes in the Senate, it will then go to the House which passed the original HB 2020 last year. If the Republicans will stay for floor votes on SB 1530 is yet to be seen.
You can stream SB 1530 hearings below:
Feb 4 Hearing here>>> http://oregon.granicus.com/MediaPlayer.php?clip_id=27824
Feb 6 Hearing here>>> http://oregon.granicus.com/MediaPlayer.php?clip_id=27871
Feb 8 Hearing here>>> http://oregon.granicus.com/MediaPlayer.php?clip_id=27884
Friday, November 22, 2019
February short session set in motion
The November Legislative Days began Monday with an appeal by environmentalists for revived cap and trade legislation and ended Thursday with a sit-in at the governor’s office in opposition to the Jordan Cove pipeline.
In between, legislators and committees set the table for the 2020 short session. Legislative concepts are due today and discussions around coordinated care organization contracts, cap and trade legislation and wildfire funding all pointed to potential trends heading into February.
Legislative committee days on Jan. 13-15 will precede the Jan. 17 deadline to file bills. The short session, which is constitutionally limited to five weeks, begins Feb. 3. Each representative is allowed to be the primary sponsor on two bills and each senator can be the primary sponsor of one.
Below is a summary of the week at the capitol. We’ll continue to track developments and keep you informed.
– Paul Phillips, Pac/West Communications President
Economy still expanding, but slowing down
The week also included the release of the quarterly economic forecast on Wednesday, which showed Oregon has maintained its momentum.
The U.S. economic expansion hasn’t stopped, according to Josh Lehner (Oregon State Economist), but growth has slowed. This doesn’t necessarily point to a recession, but Oregon’s slowdown is still driven by a tight labor market, though layoffs haven’t increased.
Personal and corporate income tax collections for the third quarter were above the September forecast by $22.3 million, with corporate tax revenue $135.1 million (11.3%) higher than the close of session estimate.
The Corporate Activities Tax will undergo technical fixes in the short session, and the Joint Committee on Finance and Revenue discussed six broad areas where changes are needed. This include: registration, penalty provisions, returns and allowances, calendar year vs. fiscal year disparities, out-of-state vehicle dealers and compliance, and compliance simplification. Other areas will also be addressed.
Cap and trade looms large over short session
The week started with public pressure to pass cap and trade legislation in the upcoming short session. Gov. Kate Brown said it is a priority for her, but it must be done cooperatively and through the legislative process. Environmental group Renew Oregon threatened taking ballot measures to voters if legislation isn’t enacted.
Wildfire has raged into Oregon’s consciousness in recent years, and according to a poll 71 percent of Oregonians rank it as a “top concern,” more than health care or the economy.
The Governor’s Council on Wildfire presented its recommendations to both House and Senate committees, outlining $200 million in annual work to treat 5.6 million acres of forests in Oregon over the next 20 years, for a total cost of $4 billion. Members of the council spoke about their work with counties and said many of the places that have the greatest need also have the lowest social license.
Mark Bennett (Baker County Commissioner and rancher) said rural counties for the most part are on board with programs that decrease the likelihood of wildfires, but they’re watching carefully.
Jason Miner (Natural Resources Policy Advisor to the Governor) said the 37 priorities listed in the report are too numerous and leading up to the session they will be working to highlight the most important items.
Stakeholders Meeting on Corporate Activities Tax
A small stakeholders meeting was hosted by Oregon Business & Industries (OBI) on Thursday, October 16 at their Salem office. Attending the meeting was: Mike Stober, OBI; Shawn Miller, NW Grocers; Danelle Romain, NW Food Processors; Jonathon Sandau, Oregon Farm Bureau; Tammy Dennee, Oregon Dairy Farmers; Katie Fast, Oregonians for Food and Shelter; JL Wilson for Jenny Dressler, Oregon Farm Bureau; and Anne Johnson, Oregon Seed Association.
Mike Stober began the meeting with an update of the recent Dept. of Revenue (ODOR) state meetings on the corporate tax. There were many questions that ODOR was unable to answer, especially around the wholesale certification process which would certify that products were intended to be sold out of state. There were questions regarding the commingling of products and products that are sold several times before being shipped out of state. In addition, there were concerns over liability if the wholesale certifications turned out to not be correct (i.e., if products identified as to be sold out of state later were kept in state).
ODOR has announced that they will be issuing temporary rules in three phases in 2020, beginning January 1, and subsequent drafts released on February 1 and March 1. Permanent rules are to be published at a later time.
Shawn Miller reported that at a meeting in Portland there had been discussion on a possible fix where the taxes would be estimated based on the prior year’s percentage of sales. He said the crafter of the tax receipts portion of the bill, Senator Hass, had been open to that discussion. The department seemed interested in looking closer at this concept.
Rep. Findley is drafting a bill for a complete AG exemption due to the complexity of applying the tax to the industry. Senator Hass has said in private meetings that they are not interested in industry exemptions, but the exemption bill will be introduced in hopes that it will be heard in committee.
Rep. Clem has warned that any bill or technical fix needs to have bipartisan support if it is to move in a short session where the bills only have a week to get out of their chamber of origin committee.
- AG Lobby meeting with ODOR on Oct. 21
- Technical fix language to be submitted with AG Lobby input
- Rep. Findley legislation for an AG exemption
- Stakeholder meeting prior to November legislative days
On Monday, October 21, Ag Lobby held a meeting with policy analyst from the Department of Revenue. The meeting had two intentions, one was to allow the agency to hear all the various business models in the Ag industry and also for the analyst to answer questions that they currently have the answers to regarding the drafting of rules. There remain many unanswered questions.
Various examples of sales transactions were given to the agency, from the commingling of products to questions regarding the levels that ag commodities will go through in the process before being sold and/or exported. The agency was very interested in hearing all the different business models and challenges presented and asked that we reach out to the industry at large and have them submit business models and questions to: firstname.lastname@example.org.
What We Know:
- Draft rules are being triaged in level of urgency. They will be released January 1, February 1 and March 1
- The first set of rules will come out as a draft in December
- Senator Hass will introduce a committee bill that will include technical fixes brought to him by the agency and the industry
- Any changes to the COG (Cost of Goods) will need a legislative fix
- COG definitions are coming from the IRS Tax Codes
- The terms “delivery” and “wholesale” will be defined in the Rules.
- The definitions of in-state and out of state for purposes of taxable income will be based on the place of delivery
As noted above, the agency is currently hosting conference calls for those who missed the statewide roadshow. It is unclear how many of these calls will be scheduled. To participate, email CATTAX.QUESTIONS@oregon.gov to receive the current schedule, phone number and access code for the conference call.
Legislative Report for July 1, 2019
Oregon lawmakers adjourned their session on Sunday with only hours to spare before the constitutional deadline for adjournment at midnight. After returning to the capitol from a nine-day walkout in protest of the controversial cap-and-trade legislation, Senate Republicans finally provided the quorum necessary for the chamber to return to its regular order of business. Saying the Senate came back in a sprint would be an understatement for the ages as the chamber spent the entire day and much of the evening voting on 105 bills, possibly a single-day record for the chamber. Strategically, the chamber advanced most of the noncontroversial legislation on Saturday to make way for a day of high negotiations on Sunday.
Without the cap-and-trade legislation looming over every other bill and with the Senate Republicans back in the building, the legislature took swift action on advancing other priorities. In addition to the rent control, health care funding, and business tax increases passed earlier in the session, the legislature gave final approval to a whole host of other bills. These include ending the practice of exclusive single-family residential zoning, a payroll tax to support a paid family medical leave policy mandate, campaign finance reform, extending and creating new tax credits, technical corrections to the new business tax on gross receipts, and paying for postage on ballots, among many others.
Perhaps one of the biggest surprises in the weekend rush to adjournment was an about-face by Republicans on a bill referring a $2 increase of the state’s tobacco tax to voters. Republicans and the tobacco lobby have long fought against tobacco taxes and were adamantly opposed to the proposal. While the Republican walkout was largely about the public perception of defeating the climate bill, their return to the capitol was an orchestrated effort around the tobacco tax. With only two days remaining of session, Democrats would need to rely on Republicans releasing the votes to suspend the rules and allow the tobacco tax referral to progress for a final vote. This gave Republicans an insurance policy for their legislative priorities and any pork destined for their districts. In the final minutes of the session, Republicans granted the rules suspension so the bill could pass on a party-line vote.
The return of the Senate Republicans on Saturday relieved some, but certainly not all, of the pent-up tension in the building. Sen. Brian Boquist (R-Dallas), who received substantial media attention during the walkout for threats made against the Oregon State Police if they attempted to arrest and return him to the capitol, had decided to return to the building. Leadership had asked him not to participate in floor activities after multiple members expressed concerns about his behavior and their safety in the building. These circumstances quickly became political after a small group of Senate Democrats began requesting a conduct committee consider available actions, including expulsion, that could be taken against him. Ultimately, it was decided that a special committee on conduct would meet after the session adjourned to review the case against the senator and recommend further action.
The legislature now closes the book on a contentious and prolific session. There is room to argue the legislature accomplished more this session than all those of the last decade combined, but those accomplishments come at a hefty price. The legislature became more partisan, and the responsibility for that falls on both parties. It is perhaps a reflection on the direction of our national and global politics, and the Magic 8-Ball suggests the paradigm will not shift as we approach the 2020 session and the presidential election cycle. For better or for worse, this is the world we live in now.
Legislative Report for June 21, 2019
Politics in the Oregon State Capitol reached a breaking point this week and, perhaps, broke. Senate Republicans fled the capitol for a second time in six weeks to deny the quorum needed to advance bills. The media have attributed the walkout to the cap-and-trade legislation, which is fair and true, but the decision to leave is emblematic of years of the deepening tensions between Oregon’s urban and rural communities.
Urban communities, almost exclusively represented by liberals in the legislature, have advanced an aggressive environmental agenda over the past several decades. These policies have stung many rural communities and their more conservative-minded legislators have fought back to force moderation. This has generally toned-down regulations emerging from Salem, but this year’s session has been different as the balance of power profoundly shifted into the hands of urbanites.
Senate Republicans, representing nearly the full range of Oregon’s rural communities, feel as if their constituents have been backed into a corner and have lost control of their own destiny. While the cap-and-trade legislation is largely targeted at industrial polluters, regardless of their urban or rural setting, the political debate has provided them a way to channel their frustrations in an extreme fashion—by leaving.
Oddly enough, the opposition to the cap-and-trade legislation is not a partisan issue. Word throughout the capitol this week had indicated at least three majority-party legislators, Sens. Betsy Johnson (D-Scappoose), Arnie Roblan (D-Coos Bay) and Laurie Monnes Anderson (D-Gresham), had informed leadership they would be voting against the bill on the floor. These commitments alone, if all true in the end, would have outright killed the legislation.
In the negotiations preceding the walkout, Democrats and Republicans debated the process for amending the bill to secure the support needed for its passage. Republicans demanded the bill be returned to a committee for an amendment removing a clause prohibiting their rural and industrial constituents from referring the bill to voters. Environmental advocates and their allies in the liberal faction of the legislature refused to allow the bill to be sent to a committee without first exposing those unfaithful votes on the floor.
This posturing is simply a fight over blame and credit. The liberal faction wanted to expose those standing in the way of landmark legislation. Meanwhile, Republicans wanted credit for killing a prized portion of the majority party’s ambitious agenda. It appeared those negotiations had collapsed late into Wednesday evening with the bill being scheduled for its final floor vote. Republicans, feeling boxed into a corner, fled overnight in defiance of their loss.
The state constitution requires lawmakers to adjourn their session in only nine days, and this game of political hide-and-seek is only increasing the contentious temperature in the building. Governor Brown has sent the Oregon State Police to search for absent legislators and has ordered officers to return them to the building. Republicans, anticipating this action, have dispersed outside the state and some are hiding in remote locations across multiple western states.
There remains substantial action awaiting final approval by the legislature, including proposals on paid family medical leave, referring a tobacco tax increase to voters, issuing drivers licenses to undocumented migrants and ending the exclusive practice of single-family residential zoning. This is not to mention the dozens of agency operating budgets and other appropriation bills needing to be adopted before the legislature closes its doors. The governor has announced she will call the legislature into an overtime special session on July 2 in the event the absent members do not return to Salem. These games seem to have no end in sight.
OTC Delays Decision of Intermodal Facilities
A long awaited decision on two intermodal facilities was expected Thursday, June 20 at the Oregon Transportation Commission (OTC) meeting in Salem but after a report from the consulting firm, The Tioga Group, the commissioners voted to delay the decision until the July 18 meeting. The sponsors of the projects were given until July 12 to respond with more information regarding rail and shipping costs.
On the line is a $26 million project in eastern Oregon and $25 million for either Millersburg or Brooks in the mid-valley.
Project sponsors were allowed to speak to the Commission and explained that rail and shipping data had been difficult to provide due to proprietary business information and the competitive business environment of the railroads.
To read more about the OTC decision delay go here>>https://democratherald.com/news/intermodal-funding-decision-delayed-until-july/article_324c587c-8a27-5509-a55f-c6927b6b6ee1.html
SB 885 Stalled by Walk-out
SB 885, which is the bill that would continue the 500-acre limit on canola production in the Willamette Valley, was scheduled for a floor vote on the Senate floor on Thursday. The same agenda had a controversial climate bill, HB 2020, scheduled. The Senate Republicans walked out of the Capitol on Thursday in protest of HB 2020. With this walk-out, a quorum was absent for the Senate to vote on Thursday’s agenda. If a quorum becomes present, SB 885 will be on the first agenda for the Senate floor. If the walk-out continues, then the Governor has said she will issue a special session in July to move the remaining budget bills along with important policy bills. The legislature has a constitutional requirement to end session by June 30. Stay tuned.
ODA Rulemaking Extension on Willamette Valley Production District/Canola Production
Note: ODA is extending the comment period from June 21, 2019 at 5:00 pm until June 28, 2019 at 5:00 pm for the permanent rules for Brassicaceae general production and restricted Willamette Valley Protected District.
ODA Proposed Rulemaking—
Proposed Rules attached and here> https://www.oregon.gov/ODA/agriculture/Documents/ProposedRulemakingBrassicaceaeProduction.pdf
Last day to offer public comment on the proposed rule changes: June 28, 2019 at 5:00 pm.
Email written testimony to: email@example.com
Legislative Report for June 14, 2019
The Oregon Legislature may be in the final days of its marathon session, but the road to adjournment remains out-of-sight. Our reports to you over the past several weeks and months have been dominated by the new political dynamics in the building as it relates to the dual supermajorities, which still remains the dominating force in the building, but the overarching dynamic this week was time.
The opening day of the session began two weeks earlier than previous sessions. In 2018, the legislature adopted a measure the change the start date of session from February 4 to January 22 to ensure session would end before Independence Day. All the major deadlines of session were adjusted based on this new legislative calendar except for one important milestone: the revenue forecast.
The spring revenue forecast is a turning point of the session. It serves as a reminder to the political establishment about the constitutional duty of the legislature—to craft the biennial budget—and signals the end of most policymaking. The release date of the forecast did not move to an earlier date in the rewriting of the legislative calendar and is a factor weighing on lawmakers as adjournment nears. Now, the budget writers have two fewer weeks to close out the session with a balanced budget as they scramble to the finish line.
There is additional pressure on the legislature to finalize major policy proposals before those budgets are completed. In this week alone, the legislature began advancing measures enacting a cap-and-trade program, creating a new statewide paid family medical leave policy, increasing tobacco taxes, and ending the practice of exclusive single-family residential zoning. These are the major issues remaining for the session, among a few others, and are bound to keep legislators occupied while budgets are finalized.
With all that said, the dual supermajority dynamic is continuing to shape the politics of the building. Political leadership essentially negotiated their usual “end-of-session” deal among the parties to end Republicans’ delay tactics on the House floor. Now, however, rank-and-file members are realizing they have enormous clout as their vote could be the deciding factor on major tax bills. Lawmakers are required to adjourn by June 30, but the end-game dynamic is fundamentally different from previous sessions, requiring leadership to negotiate the terms of the end-of-session with their own members rather than among the warring parties, and it does not seem to be anywhere close to ending.
Legislative Report for June 7, 2019
The Oregon Constitution requires the legislature to adjourn by June 30, but, after battling over many contentious policy proposals over the past several months, leadership is signaling they are almost ready to be done. In many ways, this week seemed to be a turning point of the session as leadership allowed two contentious bills to die on the floor without the votes needed to pass and gave no effort to revive them.
One of the most hotly fought issues in the capitol over the past several decades has been tort reform. Trial lawyers and their client advocacy groups have argued the state’s financial limits on awards in civil proceedings for noneconomic damages, for claims such as pain and suffering, were both unfair and unconstitutional. Meanwhile, healthcare providers and the insurance industry have argued the limits were an important tool in controlling the costs of care. This issue has been fiercely debated both in the halls of the capitol and on the campaign trail, without any resolution in the legislature. The debate was finally called for a vote on the Senate floor, with or without the votes needed to pass it, after more than three weeks of delays and consuming much of the remaining energy in the chamber. Another perennial bill in the House, a proposal to allow a new local government service district to provide after-school programs for children, faced a similar defeat after local governments raised concerns the proposal would tap into their scarce property tax revenues. The willingness to allow these bills to die in the daylight of the public is a rare event in our politics, especially given the variety of ways a bill can be kept on life support, and indicates the legislature is close to being finished with the games and is simply ready to go home.
The remaining focus of the legislature is shifting to the Ways & Means Committee to finalize agency budgets and appropriate funds for policy bills advanced by other committees. Among those bills is the controversial cap-and-trade legislation, which had been scheduled for a final committee vote this morning, was removed from the agenda after a series of controversies. Republicans in both chambers have been releasing legal opinions suggesting constitutional issues with the planned revenues. Sen. Betsy Johnson (D-Scappoose), co-chair of the committee, released a 19-page amendment on Thursday afternoon suggesting substantial changes to the program, drawing questions over the current vote count for the bill. The committee will also need to address the coming release of a proposed payroll tax supporting a state paid family medical leave program, among other issues still awaiting final consideration. The end of session may be nearing, but the gears of the legislature take time to unwind, and that time increases the potential for surprises.
Legislative Report for May 31, 2019
Republicans in the Oregon House have used the state constitution and parliamentary procedures to essentially bottleneck the chamber floor in an attempt to gain leverage over session negotiations. Unlike their counterparts in the Oregon Senate, House Republicans did not flee the capitol or deny quorum but instead required the clerk to read aloud every single word of every bill that has appeared on the floor. The delay tactic is one of the only tools the superminority can employ to slow down the legislative process, and Republicans banded together with astounding unity—until this week.
Leadership from both partisan caucuses have been meeting over the past several weeks to negotiate the terms of a truce allowing only the abbreviated summaries of bills to be read before final passage. These negotiations seemed to be going nowhere and the backlog of bills on the House floor had reached epic proportions, requiring days of floor time to be dedicated simply to reading the bills. Unable to find common ground, the House Speaker scheduled extended afternoon and evening floor sessions (and even weekend floor sessions) simply to catch up on bill readings. Initially, Republicans appeared to not balk at the threat.
To the surprise of many on Wednesday, however, Reps. Bill Post (R-Keizer) and Mike Nearman (R-Independence) broke with their own party and worked alongside Democratic leadership to allow the full reading of bills to come to an end. Rumors in the building suggest these members had revolted against their own caucus in protest of Republicans releasing the votes on earlier legislation ending a constitutional sentencing requirement for juvenile offenders to be treated as adults. Democrats seized the opportunity to read only the bill summaries and stayed late into the night working through the backlog.
Despite the internal caucus drama of the previous day, Democrats and Republicans continued negotiating the terms of a legislative ceasefire. Republicans agreed to suspend the full reading of bills in exchange for keeping the floor schedule to regular business days and shifting the focus toward adjournment. This allowed the chamber to work through more than 50 bills over the course of the day, the most it has completed all session, including a controversial bill to contain the costs of the state pension system.
Like most other states, Oregon’s unfunded pension system is a driving force in politics as the legacy benefit costs far outweigh returns in the investment account. Oregon is one of only two states that does not require current employees to contribute to their pension benefits, and the need to tackle the ballooning pension costs reached a breaking point this session in the debate over the new business tax to fund public schools—if the legislature neglected to enact cost containment, the new funding would likely be diverted out of classrooms and into the pension account. Containing these costs is not an easy vote for most Democrats as it pits them between two of their most valued constituencies: government employees and schools. This legislation was called for a vote on Thursday, but not without one last bout of drama. Republicans, still maddened over the betrayal of the previous day, refused to release any votes for the pension bill and required the Speaker to wrestle votes from her own caucus to ensure the bill’s passage.
The Oregon Senate calmed this week as the chamber spent the last two days in mourning, observing the passing of Sen. Jackie Winters (R-Salem). First elected in 1999, Sen. Winters was highly regarded by both sides of the political aisle. She was a political firebrand and a champion for racial equity, fiscal conservatism, and reforms to the public safety and human services areas of government. Even while battling lung cancer, Sen. Winters continued her pursuit of criminal justice reform this session. She successfully lobbied her Republican colleagues to support a historic reform of the juvenile sentencing system and spoke passionately during her floor speech on the bill. She will be remembered as a thoughtful stateswoman and friend who made a resounding impact on our state.
Legislative Report for May 24, 2019
The tides have turned in the battle to slow down the Oregon Legislature. Senate Republicans, as part of the terms for their return to the capitol, are regularly waiving the rule requiring bills be read in full to allow the chamber to swiftly move bills through the floor. House Republicans, on the other hand, have denied the same courtesy as a stall tactic in hopes of getting an upper edge in negotiations where they otherwise do not have any leverage. It appears these tactics have only stalled the progression of innocuous bills so far, and leadership has shown no hesitation in scheduling evening and weekend floor sessions to catch up. Meanwhile, committees are continuing to advance high-profile measures in the legislature’s sprint to the finish line.
On Tuesday, the Ways & Means Committee approved a bill designed to tackle the growing costs of the public pension system. State actuaries have suggested roughly 32 percent of the total payroll cost of public employers would need to be dedicated to pension benefits in the absence of legislative action. This measure, introduced by leadership, proposes benefit changes for current employees and dedicating resources to paying down the unfunded liability, reducing the overall percentage paid for by state and local governments. These changes do not come without intense scrutiny, however, as lawmakers on both sides of the aisle have criticized the proposal as being both too harsh and not going far enough. No matter the discontent from some factions of the legislature, the Senate mustered the votes on Thursday to make the measure’s passage a special order of business and send it to the House on a narrow 16-12 vote.
The carbon pricing proposal, known as cap-and-trade or cap-and-invest, cleared a critical first step in becoming law. During the afternoon of Friday, May 17, the Joint Committee on Carbon Reduction adopted a 182-page amendment and sent the bill to the Ways & Means Committee to address needed appropriations. The program would set ambitious standards requiring industrial polluters to purchase credits if their emissions exceed 25,000 metric tons of carbon dioxide. This requirement would also impact the transportation sector and a recent analysis by the Legislative Revenue Office suggests the program would reduce gas tax revenues by $18.55 billion over a 30-year period as market incentives shift drivers toward electric vehicles. This issue and others are sure to generate hot debates in committee and on the floors during the remaining weeks of session.
In addition to these divisive debates, the legislature still has considerable work remaining before lawmakers adjourn. The budgets for most larger agencies remain awaiting final action in the Ways & Means Committee while the committee focuses its attention on contentious policy matters. As well, leadership is preparing to release a new statewide payroll tax to fund a paid family medical leave program to get ahead of a contentious ballot measure from being referred to voters. It may feel as if the legislature is nearing its conclusion for the year, but their work is still cut out for them.
Oregon Department of Agriculture budget approved for the next biennium
The budget of the Oregon Department of Agriculture (ODA) was approved this morning in the full Joint Committee on Ways and Means.
As outlined, their budget will include:
- $126,823,393 all funds
- 505 positions or 381 FTE
- 6% funding increase
- 5 million in one-time funding for Japanese Beetle
During discussion, Rep. Paul Holvey (D-Eugene) put on record he was concerned that ODA had not made determinations on the use of the pesticide chlorpyrifos although acknowledged they may be doing a study on the pesticide as proposed in HB 3058 (which currently is in Ways and Means but not yet assigned to a subcommittee). He also noted that he has concerns on cross pollination and said he felt the department should be developing best practices for cross contamination issues and that those have not been adequately addressed since the discussion in 2012-13. Rep. Susan McLain (D-Hillsboro) echoed his comments and added she understood these are all difficult issues, but they need to be addressed.
ODA rules hearing set on canola district
ODA will hold a public hearing on their recently proposed rules that will develop an isolation area in the Willamette Valley as well as a canola production area.
Proposed ODA Rules attached and here: https://www.oregon.gov/ODA/agriculture/Documents/ProposedRulemakingBrassicaceaeProduction.pdf
May 29, 2019 at 4:00 p.m.
Oregon Department of Agriculture
Basement Hearing Room
635 Capitol St SE, Salem
Last day to offer public comment on the proposed rule changes: June 21, 2019 at 5:00 p.m.
Email written testimony to: firstname.lastname@example.org
Legislative Report for May 17, 2019
This legislative session has moved at a blistering pace and there is still much more to come. Over the past few months, the legislature has moved swiftly on a first-in-the-nation statewide rent control policy and the extension of assessments on hospitals and insurance companies to fund the state’s Medicaid program. We have also seen workplace harassment complaints and threats to remove leadership from their posts. Each of these alone would be the dominant issue in a normal session but, as we have said before, this is not a normal session and this week was no exception.
Over the weekend, the governor convened with Senate Republicans in an effort to negotiate the terms of their return to the capitol after fleeing the building in a denial of quorum over a business tax that whose passage had become all but inevitable. It had become clear that Republicans needed to return to the capitol with some sort of legislative victory, and leadership was unwilling to sacrifice their top priorities to reward bad behavior. The governor, however, did not face the same constraints and was willing to offer concessions in exchange for allowing the legislature to advance an education funding package she will leave behind as her political legacy. It became clear on Monday that a deal had been struck, the proposals to enact strict gun control and vaccine requirements would not progress this session and the tax would advance without further obstruction. The bill arrived on the governor’s desk within hours of the deal being reached.
Despite the denial of some lawmakers, it has become clear the legislature must act on the looming fiscal crisis for the state’s public pension system. Any investment in public schools would likely drown in the cascading costs, and votes on the tax were secured only if leadership committed to advancing meaningful pension reforms. Leadership wasted no time in moving forward on a pension reform plan. On Tuesday, the House Speaker and Senate President outlined a series of modest pension reform proposals that include a mix of structural changes and one-time funds designed to limit the percentage of payroll dedicated to pension costs. After their substantial victory over the new business tax, however, the public employee unions were unwilling to accept these concessions and threatened litigation against the state if the legislature adopted any reforms that reduced employee compensation or benefit.
On Wednesday, the state economists released a revenue forecast that was, in their own words, nothing short of historic. Oregon has experienced an unprecedented tax collection season, due in large part to the changes from the 2017 federal tax law, and will see $2 billion more in tax collections than anticipated. These collections will result in the largest personal income tax refund being issued to taxpayers in the state’s history. On Thursday, however, House Speaker Tina Kotek introduced legislation that would recoup half of those funds and redirect them to replacing the I-205 bridge, a program to assist freight carriers replace diesel engines and set up a new fund to aid the state transition to electric vehicles. In a rare public signal of dissatisfaction, the governor told reporters she would only accept a recoupment of the taxpayer funds if it were to be used to pay down pension debts. Recouping this money will be no easy task as the state constitution requires a two-thirds vote in both chambers to retain those funds and the relationship between the partisan caucuses has been strained, to say the least.
We may be entering the final weeks of session, but the laundry list of issues remaining to be debated is enough to fill an entire session on its own. In the days and weeks ahead, the legislature is poised to debate a controversial cap-and-trade proposal, tort and medical malpractice reforms, and a new employer and employee payroll tax to fund a paid family medical leave program, among the many other policies and budgets remaining in the process. It may feel like the end of session, but we still have a lot of session ahead of us.
Intermodal facilities update at OTC
On Thursday, the Oregon Transportation Commission (OTC) held its monthly meeting in Salem. As part of the agenda, Eric Havig with the Oregon Department of Transportation gave an update on the remaining intermodal facilities being considered by the commission. Mr. Havig reported that all sponsors had answered the April questionnaire that included rail questions to the Brooks site. The Tiago Group, which has acted as a third-party consultant on the process, will give revisions to the OTC by June. It was suggested that each sponsor be able to speak to the commission for their final bid. The remaining sites include Brooks, Millersburg, and Treasure Valley. Mr. Havig also reported that a step approach will be initiated once a site sponsor enters into an agreement. This approach will include check-ins with the commission for regular checks and balances. The OTC will be announcing the selected sites shortly after receiving the final revisions.
Legislative Report for May 10, 2019
In the weeks following the last election, a prominent Republican in the legislature was quoted as saying the new supermajority control would render his party less than a “legislative speedbump.” This statement has proven to be accurate. Democratic leadership has advanced major legislation with relative ease and generally without negotiating any terms with the minority party, creating a mounting frustration for minority leadership that seemed almost destined to burst. On the whole, there are only two tools the minority party can use make themselves relevant: requiring all the bills be read before their final chamber votes and denying their presence to provide the quorum necessary to conduct regular business. Republicans in the Oregon Senate decided to pull the trigger on the latter this week—they fled.
Since Monday, Republicans have been absent from their official legislative duties and are rumored to have left Salem altogether. Sen. Tim Knopp (R-Bend) has decided to remain in the capitol for the time being, not in defiance of his own partisan caucus but in support of their actions. Over the past several days, Sen. Knopp has been the unofficial spokesperson for his colleagues in the building. This legislative walkout has been organized in protest of the final vote on the Student Success Act, the gross receipts tax proposed to stabilize education funding, that was originally planned for Tuesday. With Republicans nowhere to be found that day or any other day this week, the chamber continues to wait to take on the debate for the Student Success Act.
So, where does the session go from here? Republicans have issued a series of demands to Senate President Peter Courtney and Democratic leadership as terms of their return. These terms include the demise of the cap-and-trade legislation and a controversial bill proposing to eliminate the limits on civil lawsuits seeking compensation for pain and suffering, in addition to sending the Student Success Act back to committee. Democratic leadership is unlikely to reward their behavior, especially as it relates to their highest priorities of the session, but the majority party’s willingness to entice their return with concessions remains unknown.
The gears of the legislature continued to move despite the lull in activity in the Senate. On Monday, the House approved a high-profile measure to prohibit parents of schoolchildren from opting out of vaccinations on philosophical grounds. On Wednesday, thousands of teachers across the state walked out of their classrooms to rally in support of the education funding bill—calling for Republicans to return to the capitol to “do their job.” Meanwhile, both chambers of the legislature continued to hold hearings and work sessions (votes) to advance measures in anticipation of the second chamber deadline.
Today marks the second major deadline of the session. If a bill has not been scheduled for a work session in its current policy committee by the end of today and if it is not approved by the committee or referred elsewhere by Friday, May 24, the bill will become effectively dead. This leaves committees with only two weeks to complete their work for this session before shutting down and is expected to result in a large volume of bills on the chamber floors. In the Senate, the long list of measures already accruing could result in extended afternoon and evening floor sessions following the return of the Republicans, which could eat away at the time available for policy committees to race to meet the deadline.
Chlorpyrifos ban receives hearing in House Rules; work session Monday
A bill that will prohibit the sale, purchase, or use of pesticide products containing chlorpyrifos in Oregon was heard in House Rules on May 8.
Rep. Ken Helm (D-Washington County) started the hearing explaining why he had signed on to the bill late as a sponsor after the bill was heard in two committees he serves on earlier in session. He told the committee he thought the current amendment (-3), which will allow a phaseout, was a compromise due to human health effects. He cited the EPA ruling of a previous ban currently in the Ninth Circuit Court of Appeals. Rep. Diego Hernandez (D-Portland) testified in support of the amendment but did acknowledge he understood that this will mean cost and change for farmers. Rep. Sherrie Sprenger (R-Scio) questioned this panel as to why the Oregon Department of Agriculture (ODA) had not acted on this, to which Rep. Helm said he believed ODA would follow the EPA and the federal requirements and be waiting on the court ruling.
Testifying against the bill was Rep. Shelly Boshart Davis (R-Albany), who testified that by banning chlorpyrifos it would take away a critical tool for agriculture and could set a precedence to regulate pesticides on a product-by-product basis. She supported HB 3058 in Ways and Means that directs ODA to do a study on chlorpyrifos and to use their current statutory authority to regulate where needed. She urged the committee to consider that a session is not long enough to make these changes for Oregon Agriculture.
Also in opposition was Katie Fast with Oregonians for Food and Shelter (OFS) and Jenny Dressler with Oregon Farm Bureau (OFB). Katie Fast explained to the committee that many crops have no other options at hand currently for controlling pests. She also explained the process with EPA and believes that the EPA results could be challenged and take years to conclude; Oregon could be jumping the gun with a ban. OFS also would support an ODA study, she said.
Jenny Dressler (OFB) also testified in opposition to HB 2619-A3. She stressed that chlorpyrifos is not used often and only when needed. She added that Oregon only has two options on crops, such as the seed industry, that need to manage a broad range of pests. She also spoke to the committee about the phytosanitary requirements to ship to foreign countries and this ban could affect Oregon trade.
Chair Paul Holvey (D-Eugene) closed the hearing without a work session, but the bill is scheduled on the May 13 agenda for a work session, meaning it will make the deadline today to be scheduled to move out of committee.
If passed, HB 2882 will task ODA to write rules protecting GMO contamination
HB 2882 began as the patent liability bill to patent holders for GMO contamination from pollen drift. The bill has amendments; one will move the liability to the grower and the other request that Oregon Department of Agriculture (ODA) write rules regulating GMO drift contamination.
Sen. Jeff Golden (D-Ashland) and Rep. Marty Wilde (D-Central Lane and Linn Counties), who are sponsors of the bill, opened a hearing testifying that when the state preempted counties from regulating GMO contamination, it left GMO crops unregulated with a risk to farmers of specialty seeds and organic farmers. Sen. Golden explained that currently he believes only section two, which tasks ODA with writing rules, should be passed and the section with the liabilities to growers be left off the bill as it confuses the bill at this time. Sen. Golden testified that GMO-free labeling is the newest trend and the lack of being able to qualify for GMO-free labeling can cost organic growers millions in lost revenue.
Dan Reynolds, a farmer from Malheur County, testified against the bill, saying that during the recent bent grass issue it was regulatory agencies, farmers, and the counties working together that solved the problem.
Amy Wong with Cultivate Oregon and Friends of Family Farmers also testified about Oregon’s lack of regulating GM contamination and suggested to the committee that if the state were to allow more canola in the valley, they will need ODA rules since she believes much of canola is genetically modified. Wong said that specialty seed growers need protection from genetically engineered contamination.
Because there was such a large group to testify, Chair Paul Holvey (D-Eugene) carried the hearing over to Monday, May 13.
Legislative Report for May 3, 2019
Democrats are wasting no time in advancing their landmark business tax and education investment package, called the Student Success Act, after receiving a signal of acceptance from the state’s largest business association. On Monday, in a surprise pivot, Oregon Business & Industry (OBI) nodded in neutrality as the Joint Committee on Student Success released its final amendment on a low-rate, broad-based gross receipts tax to fund a $2 billion investment in public schools.
For years, OBI had resisted efforts from the legislature to enact a gross receipts tax, arguing these taxes as regressive and an unfair tax policy instrument for businesses with low profit margins. They had persistently threatened to refer any tax to voters. Late last week, however, the business group turned to Rep. Brian Clem (D-Salem) for help. The group was dissatisfied with the policy option favored by the committee, a basic low-rate gross receipts tax, believing the burden of the tax would fall too much on low-margin businesses.
In a leap of faith, believing the group was being genuine in its efforts to find an equitable proposal, Rep. Clem withheld his vote to buy the group more time to negotiate with House Speaker Tina Kotek (D-Portland). The result of these negotiations was a higher rate tax with a more favorable subtraction (deduction) for either business-to-business purchases or labor expenses. The tax would be imposed at a rate of 0.57 percent (previously 0.49 percent) on business sales in Oregon exceeding $1 million and would allow a subtraction of 35 percent (previously 25 percent). In addition to these terms on the business tax proposal, the negotiators also reached an agreement on a paid family medical leave proposal that would be more favorable to employers; however, the final terms of the policy are still undefined. With the business group publicly acknowledging its neutrality and signaling it would not pursue or fund a referral of the tax to voters, the committee swiftly moved it out of committee.
These negotiations have deepened the fractures in the business and political communities. Other business groups, such as Oregon Manufacturers and Commerce and the Oregon State Chamber of Commerce, are perpetuating the threat of referring the tax to voters. Likewise, Republicans made their frustrations known after being removed entirely from the negotiations. After a floor debate spanning more than six hours on Wednesday, House Minority Leader Carl Wilson concluded saying, “The next time people get together and want to get some deals made, remember the Republican caucus. We would appreciate it.” The bill was approved by the House along party lines.
Looking ahead, the Student Success Act is expected to consume another full day of legislative activity in the coming days, possibly as early as Tuesday. Meanwhile, the legislature is slowly beginning to attend to the other high-profile issues of session, such as the cap-and-trade, vaccine exemption, and tort reform proposals. The next legislative deadline is also only a week away. The second chamber scheduling deadline, requiring all bills remaining in policy committees be scheduled for a work session (vote), will signal a thinning of the proposals remaining for the session as we near adjournment. Onward ho!
Legislative Report for April 26, 2019
With only two months remaining in their legislative session, Oregon lawmakers are beginning to narrow their focus to some of the most controversial issues of session: the gross receipts tax, cap-and-trade, gun control, and a handful of others. We expected the temperature in the building to be vastly different from previous sessions because of the supermajorities in both chambers. Despite this control, however, there will always be a limit to the number of votes some members will be willing to give on taxes.
The negotiations between legislative leadership, the business community, public employee unions, and members of both parties over the proposed gross receipts tax are ongoing and, for many lawmakers, remain the dominant bargaining chip. Leadership had set an ambitious timeline for moving forward on the new business tax legislation by the end of the week and potentially sending the bill to Governor Brown before the end of the month. Ultimately, leadership was unable to reach an accord by their deadline but are expected to continue throughout the weekend and into next week.
The high-stakes negotiation over the tax proposal is having a downstream impact on other priorities, such as the proposal to increase the tobacco tax by $2 per pack and set Oregon apart from other states by also taxing e-cigarette (vaping) products. This proposal has been billed as a critical component to addressing the state’s Medicaid funding shortfall as the state’s financial responsibility for the program increases. Given the implicit limit on supermajority votes and entwining of issues in the session negotiations, it appears the best the legislature may be able to do this session is refer the tobacco tax to voters at some point next year. This is only one example of some of the softening around ambitious policy proposals and is by no means a rare example.
On the topic of Cap and Invest, however, negotiations have not watered down or scaled back the bill. To the contrary, the bill has grown in both size and scope. Democratic leadership continues to add new elements in an effort to satisfy an array of concerns through greater specificity on where and how dollars raised will be reinvested.
The second major deadline of session is just two weeks away. If a bill has not been scheduled for a work session (vote) in its second chamber committee by May 10, the bill will become procedurally dead. Likewise, any bill that is scheduled for a vote by May 24 but is not ready to move will also become effectively dead. The deadline marks the true countdown to the end of session as most policy committees close for the year and the focus shifts to the biennial operating budget in the Ways & Means Committee. Needless to say, the work in Salem is far from being finished.
Legislative Report for April 19, 2019
Oregon lawmakers may have more than two months remaining for their scheduled adjournment, but the focus in Salem is already beginning to shift toward the end-game negotiations. The supermajority control in the building has so far had only a modest influence on policy outcomes. The debates earlier in the session over rent control and Medicaid funding were undeniably contested, but those issues were among the most likely to advance regardless of the balance of power. Now, however, the political momentum is beginning to circle around the one issue that only a supermajority can tackle—business taxes.
The perennial debate over tax increases in the legislature has been inexorably tied to the ballooning liabilities owed to the Public Employees Retirement System (PERS). With an unfunded pension liability now exceeding $27 billion and rate hikes expected to total 24 to 29 percent for public employers in the next budget cycle, the looming fear from many is the pension woes will eat away new investments made by the legislature. In recent weeks, the greater business community has released ballot initiatives proposing structural benefit reforms to guard new revenue from being dedicated toward these obligations. Likewise, the governor and legislative leadership are convening their own workgroups to propose solutions this session to address the coming fiscal calamity.
Despite these discussions around pension reform, or possibly because of them, the legislature is continuing its efforts to advance a substantial education investment plan, called the “Student Success Act.” This week, the special committee forming the plan outlined the mechanics of its proposed business receipts tax. The tax is imposed at a rate of 0.49 percent on business receipts exceeding $1 million and would raise more than $2 billion for public schools. The policy differs significantly from the gross receipts tax proposed in Measure 97 (2016) by applying the tax to a very broad base of businesses (any business making sales in the state) and currently allows a partial deduction for either purchases from other firms or labor. In testimony to the committee, funding advocates and the business community seemed to agree on merits of investing in public schools but the larger business groups drew a hard line on there being an equal need for structural pension reforms and called to question the cumulative impact of all the taxes proposed by the legislature.
With everything on the line, leadership is making a play to pass this new tax and investment plan at a rapid pace. The co-chairs of the committee have said they intend to move the bill out of the committee as early as next week, giving only a few short days to make changes to the underlying policy. Some in leadership have also signaled that if the committee is successful in advancing the plan and if they are successful in gathering the votes needed to enact it, the timeline to adjournment could approach much faster than previously expected. Leadership has summoned the Ways & Means Committee to begin moving agency budgets through the appropriations process and signaled that committee chairs need to begin moving policy bills to the floor in anticipation of such an expedited session timeline.
We would not be surprised if some of the more substantial policy debates of session, such as cap-and-trade or tort reform legislation, fall by the wayside or become watered-down as these negotiations continue. In fact, the special committee formed to consider the cap-and-trade legislation has cancelled all its hearings since April 5 and does not currently have another hearing scheduled. Equally important, however, is that we need to be watchful for any problematic bills remaining in the legislature as dead bills have a tendency to come back to life as deals are cut. These high stakes negotiations over taxes and spending are bound to ruffle feathers in the building, one way or another.
Legislative Report for April 12, 2019
Normally, the legislature all but comes to a stop in the days following the chamber of origin deadlines to give members a chance to return to their districts and regroup before the second half of session begins. However, this is not a normal session. Following the work session deadline on Tuesday, lawmakers returned to the capitol to begin rolling out proposals and hearings on some of the most contentious issues poised for the session.
In a couple of weeks, on May 8, teachers from around the state intend to walk out of classrooms in protest of the legislature not adequately funding public schools. Oregon has long ranked among the worst states in graduation rates and educational outcomes, and many attribute those rankings to lackluster funding of the primary and secondary education programs. We have seen ballot measures and legislative proposals over the past several years trying different approaches to address this issue, but none have come to fruition. We have long said the supermajority control of the legislature would drastically change the trajectory of session and we are seeing that today as Democrats begin to put their political weight behind the hallmark tax legislation of session.
The Joint Committee on Student Success, the special committee formed to tackle the decades-long issue of inadequately funding schools, released a long-awaited document containing the components of a new business tax last night. The document, in the form of an amendment, was derived from months of discussions of a subcommittee formed specifically to discuss the design of the tax. Its first iteration comes in the form of a modified gross receipts tax, a tax on business sales in excess of $1 million, at a rate of 0.49 percent for all businesses. Unlike gross receipts taxes we have seen previously in the legislature and on the ballot, this proposal also allows a business to deduct a portion of its expenses for either: materials, supplies and services; or the costs of labor. If enacted, the tax would raise $1 billion annually or $2 billion for each budget cycle.
The politics around this tax proposal are weighing on virtually every issue remaining in the legislature in some way, shape, or form as leadership appears willing to negotiate the demise of other bills, including some of their other top priorities, to secure the votes needed to pass this new business tax. With that said, the timelines for the tax to move forward in the legislature are not entirely clear. Some lawmakers wish to expedite the review and eventual vote on the tax proposal to circumvent the wrath of maddened parents; however, other lawmakers are demanding a judicious review of the policy before any additional movement.
Separate from these deliberations around a business consumption tax are other contentious debates over a substantial increase of Oregon’s tobacco tax and imposing a new tax on businesses relying on Medicaid to provide healthcare to their employees. These proposals come to the legislature based on the recommendation of a workgroup formed by the governor to find a longer term solution to the Medicaid funding debates in the legislature. It is not clear today if these proposals will be swept into the negotiations of the broader business tax discussion or if they will instead be referred to voters. Regardless, it is fair to say the legislature is in the midst of its own tax frenzy right now.
Update on Pesticide Bills
SB 853 dead in Senate Committee
SB 853, a bill that would prohibit the sale, purchase, or use of pesticide chlorpyrifos and require the Oregon Department of Agriculture (ODA) to place pesticide products containing neonicotinoid on the list of restricted-use pesticides, has died in committee.
SB 853 received a public hearing in March, but a work session was not held prior to the April 9 deadline, so the bill is dead. It is noteworthy that a bill mirrored after SB 853 has been amended to a pesticide study by ODA in the House and is now in Ways and Means.
The House Committee on Agriculture and Land Use seeks pesticide study ahead of court ruling
Chair Brian Clem (D-Salem) began the work session on HB 3058, the bill to ban chlorpyrifos, saying that he is against bans that have not been reviewed by a state agency and that the Oregon Department of Agriculture (ODA) had not been asked to review or take a position on chlorpyrifos. He said the -5 amendments would direct ODA to review the safety of chlorpyrifos products and report back to the legislature by January 1, 2020. He added that there is a case in the 9th Circuit Court that could rule on chlorpyrifos prior to that. He also noted that chlorpyrifos is still used in home products and by veterinarians and that the proponents of the ban had not met with him after the hearing.
Rep. Ken Helm (D-Washington County) noted that the bill is challenging and reminded the committee that earlier in session, the legislature had adopted the Governor’s bill directing OHA, ODA, and DEQ to support clean air and clean water and to look at federal regulations and specifically if any rollbacks would affect Oregonians. He said moving into the future, ODA needs to seriously look at products that the EPA has found to be harmful and that are widely used and depended upon in the ag industry. He noted this is not an argument over science but rather jurisdiction and that we are now waiting on the ruling of the chlorpyrifos ban. In the meantime, Rep. Helm said, there is abundant science saying chlorpyrifos is harmful to children and nursing mothers. He told Chair Clem though he supports his intent with a study, he will not support the bill.
Chair Clem said the original bill would be the strictest ban of chlorpyrifos in the nation and if the intent is to protect children, we should think of products that children use—flea collars would not be one of those. Rep. Anna Williams (D-Hood River) said she was thankful to see the study in the bill because it puts pressure on the manufacturers without putting people out of business in markets that we serve.
HB 3058 moved to Ways and Means with Rep. Helm voting no.
Controversial pesticide bill is amended and moved to Rules Committee on deadline
The House Committee on Energy and Environment held a last-minute public hearing and work session on HB 2619 on the bill deadline day, April 9. The bill was last on the agenda at the final hour. The original bill aimed to prohibit sale, offering for sale, purchase, or use of pesticide products containing neonicotinoid.
Chair Ken Helm (D-Washington County) commented that the bill had been on the docket since the beginning of session but was held as another bill, HB 3058, was being worked in the House Agriculture and Land Use committee. In an unprecedented move, Chair Helm introduced -1 amendments to the bill that removed neonicotinoids from the bill and added a ban on chlorpyrifos.
Rep. Lynn Findley (R-Vale) commented that he did not believe the House Energy and Environment Committee should be hearing the bill and it should remain in the House Agriculture and Land Use Committee where these issues are routinely dealt with. Chair Helm said he held the bill off for that reason but explained that the state is in a hard position as the EPA has found chlorpyrifos to be harmful but a ban was reversed at the federal level. It is now held up in the 9th Circuit Court, not on the science, but on matters of procedure and jurisdiction. He said those safety concerns are why he brought the amendment and planned to send HB 2619 to Rules. The amendment was adopted.
Rep. Anna Williams (D-Hood River) noted the vote was a hard vote for her, stating that she understands pesticides are toxic, but they need to be toxic in order to kill pests. She feels these bans pit one group against anther, adding she would give it a courtesy vote to move it to the Rules Committee. Rep. Janeen Sollman (D-Hillsboro) also gave a vote explanation, agreeing with Rep. Williams and saying she understands why the treatments are needed and she wishes pesticides could be regulated at a federal level rather than state by state because it puts our ag industry at a disadvantage. She added she agreed the bill should be in the House Agriculture and Land Use Committee.
In conclusion, Rep. Findley urged the committee not to take a vote on the bill and said he would remain a no vote. The bill moved to the Rules Committee with three members voting in opposition: Rep. Findley, Rep. E. Werner Reschke (R-Klamath Falls), and Rep. Jack Zika (R-Redmond).
The Rules Committee is open for the duration of session, giving the bill an added opportunity to move to the House floor. Stay tuned.
Legislative Report for April 5, 2019
Oregon lawmakers have reached the halfway point of their regular session and are currently in a sprint to move bills out of their original policy committees. We have seen some committee agendas with more than 30 bills scheduled for a hearing in a single day, resulting in long delays for bills to be heard and moved out of the committee. It makes for some long days in Salem and the natural lag and rush style of politicking that is common in the state capitol.
In the judiciary committees of both chambers of the legislature, lawmakers discussed a variety of gun control measures that drew hundreds of citizen advocates to the capitol. In the Senate, an omnibus bill includes an array of new provisions: “safe storage” and minor supervision requirements, including strict liability for gun owners who fail to secure their firearms or report loss or theft; allowing, but not requiring, retailers to set the minimum purchase age at 21; limitations on so-called “ghost guns” (i.e., untraceable or undetectable firearms); and other miscellaneous provisions. In the House, a bill aims to tighten existing limitations on those with court protective orders. For the first time in recent memory, capitol security separated proponents and opponents into different overflow hearing rooms in an attempt to cool down some of the vitriol between the two groups. Additional hearings have been scheduled for next week to move these bills forward in the legislative process.
The choreographing of the hallmark issues of this session—the cap-and-trade and business consumption tax proposals—appeared to hit a snag this week. Early in the session, leadership had moved swiftly to advance high-profile issues, such as the housing and health care financing bills, to make way for these proposals to move without being drawn into the traditional horse trading. Likewise, the plan was to advance the cap-and-trade legislation early into session so it would not become a bargaining chip in the tax debate. The drafting of both bills, however, have taken longer than previously expected and there is an increasing likelihood they will each compete for the attention of lawmakers and the lobby during the second half of session. With that said, there is no reason to suspect the legislature will advance one and not the other as both are high priorities for core constituency groups of the Democratic majority.
You should expect the legislative calendar to become even more busy in the week ahead. There are dozens of bills remaining on most committee agendas and many more are spilling over from this week. Committees will have until Tuesday, April 9 to act on measures before the end of the current deadline period, which could result in additional evening hearings for some committees. The committees not subject to these legislative deadlines, including the special committees for the cap-and-trade and tax proposals, are also expected to meet next week to release additional details. Needless to say, be ready for a lot of activity next week.
Update on AG Bills
Many bills died last week without getting scheduled for a work session. Bills that are moving through the process must be voted out of their committee by April 9 or they too will die. Bills referred to Rules and Ways and Means will not be on the same deadline as those committees do not close during session.
Canola bill has hearing
SB 885, the bill to remove the sunset and continue the 500-acre limit on the production of canola in the Willamette Valley Protective District, passed out of the Senate Environment and Natural Resources Committee on April 4 on a 3-2 vote. Sen. Cliff Bentz (R-Ontario) and Sen. Alan Olsen (R-Canby) both voted in opposition. Sen. Bentz said he believed that the regulations on canola should be done through the Oregon Department of Agriculture (ODA), adding that he wanted to send a signal that the legislature being used as the backstop was “understandable but unfortunate.”
A subsequent referral to Ways and Means was added, so the bill will be referred to a subcommittee on Ways and Means for requested budgeting by ODA. Sen. Floyd Prozanski (D-South Lane and Douglas Counties) raised a question after the vote on the need for the bill to go to Ways and Means simply to continue the status quo. The committee assistant explained that ODA thought they may need funding for continued rulemaking that has been ongoing for several months.
The bill will now be scheduled in a subcommittee of Ways and Means for budgeting. Ways and Means is open for the duration of session and bills coming out of Ways and Means will go directly to floor votes, so SB 885 will not move through a House committee.
GMO patent bill moves to Rules
HB 2882, the bill that will allow a cause of action against a patent holder or licensed manufacturer for GMO present on land without the permission of a land owner, will stay alive. It was voted out of the House Judiciary Committee unanimously with a referral to the House Rules Committee. The Committee on Rules will be open for the duration of session, so stay tuned.
Pesticide bills stay alive
HB 2619, HB 3058, and SB 853 all are bills relating to the restricted use or ban of pesticides. HB 3058 and SB 853 will ban chlorpyrifos and add neonics as restricted use pesticides (RUP), and HB 2619 will ban all products containing neonics. All three of these bills are scheduled to have work sessions on or before the April 9 deadline.
Next week will mark the start of the second half of the legislative session. Fewer bills will be in play, but there are still many bills left to pay careful attention to. We will keep you informed as we move through the last half of the session.
Legislative Report for March 29, 2019
Lawmakers in Oregon are now racing against the clock to schedule the bills remaining in policy committees for work sessions (committee votes) before the chamber of origin deadline for posting bills at midnight tonight. Once the posting deadline has passed, any bill not scheduled to receive a work session before April 9 will be considered dead. Any bill that does not receive an affirmative committee vote before April 9 will also be considered dead. After those two deadlines pass, we expect the number of active bills will be substantially reduced by somewhere between one-third to one half of the total number of bills introduced at the beginning of session. However, it is important to know that Revenue Committees, Rules Committees, and Joint Committees are not bound by the chamber of origin deadline. As a result, some bills that are in substantive policy committees will be granted a temporary reprieve by being referred to one of these committees, in order to buy some additional time to work out amendments, but such reprieves are short lived and not always successful in the end. Session is already at the halfway point, and all bills need time to navigate the second chamber. The reality is every day a bill stays in its originating chamber is another day it is not advancing through the second chamber, and no committee in either chamber can work beyond adjournment sine die.
On Monday, the House Business & Labor Committee held its first hearing on a proposal to enact a new payroll tax on both employers and employees to fund a new insurance pool providing workers with a state-sanctioned paid family medical leave benefit. The bill would allow an employee to take 12 weeks of leave during the year and an additional 14 weeks for maternity or paternity leave (and another six weeks if there are complications with the birth). This bill is becoming one of the hallmark labor bills of session and one (of many) areas of consternation between lawmakers and small businesses. The hearing featured labor advocates and chambers of commerce arguing the merits of the new requirement and the substantial burden of small businesses trying to comply with a new payroll tax. Despite the controversy circling this bill, the benefit program is among the top priorities of leadership this session and will surely receive more attention by lawmakers.
On Thursday, the House Health Care Committee unveiled amendments to a placeholder bill creating a new tax on employers providing no or insufficient health care benefits to their employees. The idea behind the new assessment is to collect funds from employers who are largely relying on public assistance programs, such as Medicaid, to provide benefits to employees. Proponents of the legislation argue the new tax creates an incentive for employers to provide these benefits to their low-wage workers or else assume a financial stake in the state programs those workers rely on. Opponents, including some of the largest business groups in the state, are condemning the proposal as millions of dollars in new taxes on Oregon’s small- and medium-size employers. There are substantial political ramifications for this bill. The revenue generated from the new tax is one of several ideas currently on the table for balancing the remaining portion of the Medicaid budget. However, there is an increasing likelihood a new tax on employers could be referred to voters or receive a substantial challenge in the courts. Needless to say, the future of the bill remains uncertain right now.
The Joint Committee on Carbon Reduction, the committee assigned to designing the new cap-and-trade program, has also released amendments rewriting the legislation previously introduced. Earlier this session, the committee had released an outline for the program that included special exemptions for specific businesses and sectors. The new amendments are generally more restrictive and replace many of these exemptions with a longer phase-in period for businesses to comply with the new law. This phase-in period would allow a business emitting more than 25,000 metric tons of carbon dioxide to claim free allowances for 95 percent of its emissions for the first three years of the program and continue to claim those allowances afterward if they are able to prove the business is using the best available technology to reduce emissions. Nonetheless, this legislation is among the most controversial bills (alongside the debate over a new business consumption tax) and will receive substantial attention in the weeks and months ahead.
Looking forward, next week is likely to see substantial activity in policy committees. We are already seeing some committees with a dozen or more bills scheduled for a vote on any given day, and some committee chairs are planning to schedule additional evening work sessions to be able to power through their overloaded schedule. As we indicated previously, it is worth watching not only the activity in committees but also the direction of bills moving out of them. If a bill is not ready for a floor vote or if leadership wants to keep an idea alive for the final horse trading at the end of session, the bill may be assigned to the Revenue, Rules, or joint budget committees for further consideration. With high-profile negotiations occurring over the business tax and other major issues of session, we are expecting to see a good number of bills fall into those committees and loom there for the remainder of session.
Pesticide Bills have a packed house this week
This week, public hearings were held on SB 853 and HB 3058 in their respective chambers. These “companion bills” (mirror images of each other) seek to ban chlorpyrifos and to regulate use of neonicotinoids through creation of a new license.
The hearings drew widespread opposition from seed producers and farmers, who testified that chlorpyrifos are effective in warding off pests, especially in the fields of eastern Oregon where pests can destroy entire crops in a matter of days. Seed farmers testified that neonicotinoids are used to protect vulnerable seedlings from pests and diseases. They also noted that ODA already has the statutory authority to restrict the use of dangerous pesticides.
Roger Batt, Executive Director for the Eastern Oregon/Idaho Seed Association and Pacific Seed Association, testified that losing access to chlorpyrifos could lead to significant loss to seed farmers and would put Oregon seed producers at a significant disadvantage in competing against producers in others states that do not have a ban on chlorpyrifos.
Chair Michael Dembrow (D-Portland) asked what would have happened if the EPA had banned chlorpyrifos as recommended by the previous federal administration? Batt explained that such a ban was estimated to cause a 30-60 percent loss in crop yield and that other options are currently in development.
The proponents of the bills included Dr. Meagan Horton, Professor of Environmental Medicine from Mount Sanai; many local organic farming groups; and wildlife protection groups. Proponents cited EPA studies on the effects of chlorpyrifos to pregnant woman and children, such ADHD, delayed educational development, and increased behavior problems. Oregon Wild testified that pesticide labels instruct people to wash their clothes worn while applying pesticides separately from other clothes, not taking into consideration that trace elements can contaminate waterways and poison fish and other wildlife. Proponents blamed the Trump administration for not imposing the ban, and claimed a lawsuit is currently underway in the Ninth Circuit Court in San Francisco. They urged the committee to make Oregon join other states in banning chlorpyrifos and restricting the use of products containing neonicotinoids to licensed users prior to the court’s ruling.
Chair Dembrow said he will be talking to his committee members about the best path forward, adding that the initial goal was to keep these chemicals in the hands of professionals who were educated and trained in their use and away from household public use. He said they may need to look at the bill to clarify this in regard to neonicotinoids.
Rep. Shelly Boshart Davis (R-Albany) testified that the regulation of pesticides should be left to state agencies and the EPA, and not to a citizen legislative body. Katie Fast with Oregonians for Food and Shelter testified that there are no alternative products for specialty seed growers and that neonicotinoids are an important part of integrated pest management used by many farmers and seed producers. The Oregon Seed Association submitted written testimony that a ban on chlorpyrifos could leave seed producers at an economic disadvantage.
Jonathan Manton representing the Oregon Organic Coalition said they are working on amendments with opponents such as nurseries and believe that they can come to a responsible use agreement.
Chair Dembrow noted that there was an equal number of opponents and proponents at the Capitol to testify and thanked both sides for their participation on an important bill. It is expected that if the bills advance from committee, it will be after adopting subsequent amendments.
At the time of this report HB 3058 has been scheduled for a work session in the House Ag and Land Use committee on April 9. Also, HB 2619 has been scheduled for it’s first public hearing and a possible work session on April 9. HB 2619 would ban the sale of products containing neonicotinoids. Bills must be scheduled in their chamber of origin by midnight tonight.
Watch the Senate hearing on SB 853 HERE.
Watch the House hearing on HB 3058 HERE.
Legislative Report for March 22
We never said that governing under dual supermajorities in the legislature would make politicking any easier for leadership. In previous sessions, legislative leadership has been required to negotiate the general trajectory of session with Republicans to navigate the major tax bills through each chamber. This session, however, leadership must negotiate the terms of the featured acts of session with members of their own party, each of whom believes he or she is the deciding vote and wants something in return.
There remains a good amount of dissonance in the majority party despite one-party rule. We are beginning to hear demands from the more progressive groups for leadership to use its power to raise substantial new revenue in amounts far exceeding the new revenue target of $2 billion established by the governor and leadership. There have always been threats of ballot measures made during session—it seems to be a normal course of business in politics these days—but rumors are quickly emerging that some progressive groups are ready to prepare another tax ballot measure during the next general election if the legislature does not harness its control of the process to raise business taxes. Given the politics of this session and the dynamics of the next presidential election, the stars may be aligning for these groups to get their wish if the legislature does not act on tax reform.
Elsewhere in the tax conversation, the co-chairs of the special committee formed to draft those business taxes sent a letter to the leadership of the business community asking if they are willing to support any of the options being considered by the committee. The Oregon Business Plan, a consortium of the largest business groups in the state, had suggested a modified gross receipts tax allowing a deduction for purchases between businesses as an alternative to a traditional gross receipts tax. In their letter, the co-chairs asked if the group was willing to publicly endorse its own proposal. In lieu of taking a position on the proposal, however, the group responded with demands for the legislature to move forward on a series of pension reforms before coming to the table on a business tax increase.
We now find ourselves in familiar territory. The business community, in partnership with former labor leader Tim Nesbitt, has launched a new group to advocate for pension reforms. Unfortunately, there does not seem to be momentum in the building amassing around this issue. The reforms from the 2003 and 2013 legislative sessions effectively stopped the fiscal bleeding, but the contractual obligations to pensioners who were promised substantial benefits continue to add to the ballooning deficit in the program. Most Democrats, including the governor, ran on a platform of protecting pension benefits for public employees and raising business taxes to pay for investments in public education, and now see their victories as a mandate by voters to protect the benefits promised to retirees.
Pay close attention to the destination of bills as the legislature races against the clock to meet the first chamber-of-origin deadline. This is the deadline by which bills must move out of the House or Senate committee in which the bill originated. We are beginning to see many of the high-profile bills move to the rules, budget and revenue committees, which are not subject to the deadline. These referrals are often an effort to keep controversial legislation in the exclusive reach of leadership, giving them the opportunity to trade those bills in order to secure the votes needed to move forward on the featured issues of session—including taxes, cap-and-trade, labor laws, healthcare, and criminal justice reform. All these issues circle around the tax conversation and are, in part, an effort to fend off another divisive ballot measure.
Ag Committees will have a full calendar of hearings next week
By March 29, all bills must have been scheduled for a hearing and work session in their originating chamber. This rush to move bills has landed a host of Ag-related bills on the calendar for next week.
HB 2020, the Cap-and-Trade bill, is scheduled for two work sessions in the Joint Carbon Reduction Committee on March 25 and March 29. A side note is listed on the work session schedule that these are informational hearings for the committee to look at newly proposed amendments and a vote will not be taking place. After traveling the state and getting feedback from the stakeholders and public, the committee chairs have been drafting new amendments to the controversial legislation. These amendments will be made public at these upcoming work sessions.
HB 3044 will have a public hearing at 8 a.m. on March 26 in the House Committee on Natural Resources. This is the bill regarding the reporting of the aerial application of pesticides. Submit written testimony to: email@example.com
On March 26 there will be two hearings on bills to ban chlorpyrifos and classify neonicotinoids as restricted use pesticides:
As a final note, HB 2264 will have a work session at 8:30 a.m. on March 28 in the House Revenue Committee. This is the property tax exemption bill on machinery, tools, and fixtures used in agriculture and horticulture. This bill is expected to pass out for committee for a vote on the House floor.
Legislative Report for March 15, 2019
There are now only two weeks remaining before the first major deadline of session. If a bill has not been scheduled for a work session or vote in its initial policy committee by March 29, the bill will become effectively dead in committee. This self-imposed deadline by the legislature is one of the tools to narrow the focus of lawmakers to legislation capable of garnering the support needed to move forward in the process. For lawmakers and lobbyists with bills still in committee, the deadline creates a scramble to convince committee chairs and leadership to schedule a bill for a hearing or to move it to a non-policy committee (i.e., rules, budget or revenue), which are not subject to the deadline. We saw that rush this week.
One of the driving issues in the healthcare space this session is an attempt to eliminate Oregon’s non-medical exemption for childhood vaccinations. Oregon is one of only a select few states allowing a parent to opt their child out of vaccination requirements on philosophical grounds. The proposal to change the exemption is by no means a new policy idea in the legislature as lawmakers have attempted to narrow its use in previous sessions. However, the recent outbreak of measles in the Portland-Vancouver region has drawn increased scrutiny over the practice as public health officials try to contain the spread of the preventable disease. On Thursday, the House Health Care Committee approved the bill and referred it to the Ways & Means Committee after a series of intense hearings drawing hundreds of families and medical professionals on both sides to Salem.
The legislature is also considering limits to the widely-used home mortgage interest deduction. Oregon allows homeowners to deduct the interest paid against their mortgage on their state income taxes in the same manner allowed for federal taxes. The bill would create a new means-tested approach to allowing the deduction, phasing out the availability of the deduction for homeowners with income exceeding $200,000, and would eliminate the deduction for vacation homes. During a hearing of the House Human Services and Housing Committee, proponents of the change argued the deduction is predominately a tax break for the wealthy who have the means to own a home and comes at the expense of lower-income renters. Opponents, including the Oregon Association of Realtors, argued the new approach to the deduction would undermine the housing market and result in many homeowners paying hundreds or thousands of dollars more in state income taxes.
On Thursday, Senate President Peter Courtney briefly returned from his medical leave of absence to vote on a resolution supporting survivors of sexual assault. Courtney had taken a 10-day leave from the capitol at the recommendation of his doctor after experiencing issues with his eyes but some in the building had suggested the leave may have also been tied to the growing animosity in his caucus over his past handling of workplace conduct complaints. During the floor session on Friday, Courtney publicly apologized for the legislature’s handling of complaints, saying the legislature and leadership must do better to protect everyone in the capitol. He also dispelled some of the rumors suggesting he would step down because of the animosity and intends to return to the capitol next week.
Finally, the budget writing subcommittees got to work this week after receiving their marching orders from the co-chairs last week. The budget framework released by the committee leadership outlined a five-percent reduction across most program areas to better control the growing costs of current service levels and to increase the amount of money held in reserves for the next recession. The five-percent reduction target in all other areas has been met with significant angst by lawmakers and interest groups, and many have already begun calling for higher taxes to be able to preserve cherished programs. With that said, there does not appear to be much of an appetite for broad changes in the tax system to preserve these programs as the committee considering a business consumption tax has committed new funds to the public education system. This means that budget writers and program advocates may need to look elsewhere to find the resources needed to save their programs.
Senate Workforce hears changes to Retirement Savings Plan
On Thursday, the Senate Workforce Committee heard the -3 amendment to SB 164, a bill that makes employers’ failure to comply with requirements of the Oregon Retirement Savings Plan an unlawful practice. The bill will allow an employee to file a complaint with the Commissioner of the Bureau of Labor and Industries (BOLI). The Oregon Retirement Savings Board will then request that BOLI investigate an employer’s compliance with the retirement savings program that was passed in 2015.
If adopted, the -3 amendments will represent the work of opponents of the bill with the Department of Treasury since the initiation of the program.
Ryan Mann with the Oregon Department of Treasury testified and presented the changes to the committee. He said the date of compliance will change to two years and that during rulemaking, they looked at four goals that would ensure that every worker would have access to retirement savings as set forth by the mandate. Mann also said the system could work for every business regardless of size.
Mann said the four areas of focus in rulemaking were: 1) a timeline grace period 2) A cap on fines 3) language to ensure communication before penalties and 4) aligning bill with current BOLI statutes. Mann said the Department of Treasury is comfortable with the changes and the work done through the last year with opponents of the initial bill.
Erin Seiler with BOLI testified on the technical changes and told the committee that BOLI would have no issues complying with the amendments. Jenny Dressler with the Oregon State Chamber of Commerce thanked the Department of Treasury and BOLI for their work on the bill.
Chair Kathleen Taylor (D-Milwaukie) told the panel she is pleased when people can come together and bring solutions to the process. She said she plans to hold a work session on the -3 amendments to SB 164 next Thursday.
Cap-and-Trade amendments due next week
All those involved in Oregon’s high-stakes cap-and-trade negotiations are waiting with bated breath for the latest amendments to HB 2020, the Clean Energy Jobs bill that is almost certain to pass this session.
Leadership has promised a final series of amendments to the bill sometime next week. No one knows exactly what will be in this latest version, let alone the final bill. Policymakers have said that the time for public testimony, including the statewide “road show,” is now concluded. Pac/West will provide a detailed analysis of the new proposal once it is released. Stay tuned.
Legislative Report for March 8, 2019
The issue of workplace conduct is continuing to be a dominating focus in Salem and, in some ways, is becoming a distraction from the policy work in the building. It needs to be said there remain issues needing to be addressed in the capitol, but we are beginning to see the true political toll of recent revelations on the inner workings of the legislature. In an agreement signed on Tuesday, the legislature settled many of the complaints featured in news stories and will pay more than $1.1 million to eight women who were sexually harassed in the Capitol by members and staff. The settlement does not seem to be the end of the story, however, with continued pressure being applied to Senate President Peter Courtney from forces inside and outside his own caucus.
On Monday, the chair of the Democratic Party of Oregon sent a letter to Oregon Senate Democrats, urging them to “take whatever steps are necessary” to clean house and eradicate harassment issues in the building. Publicly, the letter has been received as another rebuke of the Senate President and his handling of misconduct reports. On Tuesday, the Senate President sent an email to members of his chamber saying he had been instructed by his doctors to take a 10-day medical leave of absence due to a flu that has been going around the capitol. Many in the building and some reporters have tied the medical leave of absence to the heightened focus on the workplace conduct issues and some have even suggested it may signal a changeup in the leadership ranks in Salem.
There is little room to argue that a shakeup in leadership would fundamentally change the course of session. In recent years, the Senate President has aligned his actions with centrist forces to moderate some of the policies moving through the building. Conventional wisdom suggests that without Senator Courtney, the ambitious liberal agenda in Salem would be able to move without efforts to moderate the environmental, employment, and general business policies proposed this session. It is still unclear which direction this story will turn next, but it is becoming abundantly clear this overarching theme is bound to be one of the defining stories from the 2019 legislative session.
Despite the political drama, the legislature is beginning to move forward on the major issues of session. The budget co-chairs released their fiscal framework for the Ways & Means Committee to begin following as subcommittees craft agency budgets for the next biennium. The framework calls for $360 million in spending reductions from the previous budget cycle without cuts to public schools and the Medicaid system, both of which are priorities for most lawmakers. Nevertheless, the calls for higher taxes from advocates immediately followed the release of the spending plan and will certainly be a main area of focus for lawmakers in the weeks and months ahead.
With deadlines quickly approaching, Oregon lawmakers are racing to introduce their final bills of session and to move bills out of their original policy committees. The chambers released hundreds of bills this week on a wide range of issues. Many of those bills may be released too far into the process to move forward because bills will generally need to be scheduled for a vote in their policy committee before the end of the month if they are to continue moving through the process. Nonetheless, the race is certainly on in the legislature.
This week, the Co-Chairs released their 2019-21 Co-Chair Balanced Budget. It was noted that the budget was crafted with the existing resources within existing law and not upon assumptions of new revenue being discussed, although the majority party is expected to pass new revenue measures this session. The budget provided the framework and direction from the Co-Chairs to their respective subcommittees as they prepare to work and pass agency budgets.
Highlights from this Co-Chair budget include:
- Health Care—Full funding of the Oregon Health Plan without cuts to eligibility or benefits.
- Education—The State School Fund will be spared from cuts. In addition, $100 million will be added above the current service level (CSL). Supplemental funding may be forthcoming if the Joint Committee on Student Success passes new revenue measures.
- Reductions—5% approximate General Fund reduction across varying program areas.
- Tax Credits—Costs for tax credits will be capped within $40 million.
- Bonding—Reduction in General Obligations Bonds issued to lower the amount of debt service costs in future biennia.
In addition to the framework mentioned above, the budget outlines guiding principles and factors to the subcommittees of the Joint Ways and Means Committee as they evaluate agency budgets to reach the target 5% General Fund reduction.
More agencies’ budget hearings will begin to move forward into Phase II and finally Phase III.
Legislative Report for March 1, 2019
We are seeing the legislature move with impressive speed on major pieces of legislation this session. In less than six weeks, lawmakers have already sent a series of assessments designed to fund the Medicaid program and a first-in-the-nation statewide rent control measure to the governor’s desk for signing. Both issues are traditionally mid-to-late session votes because they become part of the horse trading over other priorities in the building. The statewide rent control bill, which has died in the past as a result of such trading, was able to move with relative ease because of the highly coordinated schedule of session. It is also an opportunity for leadership to put Oregon on the national stage as tenant activists are already pointing to Oregon as an example for other states to follow on limiting evictions and rent increases.
The trials and tribulations of the workplace conduct saga are continuing in the capitol. Earlier this week, Sen. Brian Boquist (R-Dallas) filed a resolution to censure and remove Senate President Peter Courtney from chamber leadership. The resolution followed a series of articles, first published by the Willamette Week, revealing criticisms by former students at Western Oregon University that Courtney did not properly address sexual harassment issues as the assistant president for the university. The criticisms are combined with several lawsuits filed by former legislative staffers against leadership for not addressing similar issues in the building. The resolution was met with mixed reactions. There is a contingent in the Senate Democratic Caucus that has been fighting the president’s continued tenure over these issues while others, including Sen. Elizabeth Steiner Hayward (D-NW Portland), have publicly praised him for his response to the issues. Needless to say, this narrative is not going to be leaving the building anytime soon.
It is with deep regret that we share with you the solemn news that Secretary of State Dennis Richardson passed away earlier this week after a long fight with brain cancer. Richardson was a combat helicopter pilot during the Vietnam War and spent much of his later life in public service. The legislature is preparing for a state funeral for Richardson on Wednesday. Norma Paulus, a former Secretary of State, passed away yesterday. Paulus was a pioneer in Oregon politics, a champion of state land-use laws and Oregon’s vote-by-mail system. A public memorial for Paulus has been scheduled for April 27 at Willamette University in Salem.
With the passing of Richardson, Gov. Kate Brown will appoint a successor. She is required to appoint a Republican, but technically, she could appoint anyone as long as he or she is registered as a Republican on the day of the appointment. The governor has already said she will appoint someone with no interest in running for re-election in 2020. If that’s the case, Democrats will a better chance of reclaiming all statewide elected offices in the next General Election.
The race for Secretary of State is often undervalued because the position is primarily the state’s election official and audit officer; however, the next Secretary of State will likely play a pivotal role in the redistricting of legislative districts if the legislature cannot strike an accord on new maps. Simultaneously, there is an effort underway to divert control over redistricting from the legislature to an independent redistricting commission similar to other West Coast states. The change in redistricting would need to be approved by voters as a constitutional amendment, making the 2020 election even more important. The next election might seem far away but in fact it is right around the corner.
Taxation on farm equipment has a hearing
HB 2264 received a hearing in the House Revenue Committee this week. This is the bill that aims to add clarity to how county assessors assess farm equipment for taxation. Jonathon Sandau with the Oregon Farm Bureau testified that some confusion has come from recent court cases and the bill will add some clarity to the statutes. Commissioners from both Marion and Linn Counties supported the bill, as did Roger Beyer from Oregon Seed Council. Beyer told the committee that currently, growers are taxed on a piece of equipment that the farm down the road is not being taxed on, which is a problem.
The issue occurs when you define that a crop has moved into the processing stage and has added value. He told the committee that until grass seed is cleaned, it has no real value, so cleaning equipment would be exempt. But when it goes on the line to be processed and bagged, then it becomes taxable because now it has added value.
The Legislative Revenue Office (LRO) testified that though the proponents of the bill had been working with LRO, the language of the bill was broad. Rep. Barbara Smith Warner (D-Portland) said she is not comfortable diluting the counties’ tax rolls. Because the bill could have unintended consequences, the proponents and attorneys will be meeting with LRO next week to continue working on the bill. Stay tuned.
Legislative Report for February 22, 2019
The gears of the legislature traditionally move at a painstakingly slow pace as bills are traded for other priorities and deals are struck. This is not a normal session for a variety of reasons. There are less than five weeks remaining before the first major deadline of session, and we are already seeing major pieces of legislation heading to the governor’s desk. The speed in the building is being driven by a combination of the dual supermajorities and the aggressive agenda set by leadership, and it is fair to expect it will not slow down until the legislature adjourns.
On Wednesday, the House Human Services & Housing Committee approved the landmark rent control bill. SB 608, a bill that prohibits no-cause evictions after 12 months and limits rent increases to seven percent plus inflation, has already been approved by the Oregon Senate and is scheduled for a final vote in the Oregon House early next week. The strategy for this bill, and several others, appears to be to send controversial measures to the governor early in session to prevent them being traded for politically polarizing issues later in session, such as the cap-and-trade legislation and a business entity tax.
Similarly, the Oregon House moved swiftly this week on passing portions of the governor’s plans for funding the Medicaid program. HB 2010, a bill that increases the existing Medicaid assessments and creates a new insurance assessment on stop-loss reinsurance plans, would shore up 40 percent of a funding strategy derived by the governor’s Medicaid funding task force. The bill was approved by the chamber with bipartisan support, with some Republicans objecting over frustrations that amendments were never seriously considered. The remaining 60 percent of the Medicaid funding proposal—a significant increase to the tobacco tax and a new surcharge on employers not providing enough health care benefits to their workers—will not be as easy. It remains unknown if moderates in the building are willing to support an increase of the tobacco tax out of concerns over its disproportionate impact on the working poor. The employer surcharge also faces an uncertain future because the terms of the assessment are still being worked out and may result in significant administrative hurdles for the agencies responsible for overseeing it. We expect these issues to come to the forefront later in session.
There may not be a bigger political issue this session than the effort underway to revamp the state’s business tax structure. After the failure of Measure 97, the legislature has been considering options for replacing the business income tax with a business consumption tax. The Joint Committee on Student Success Subcommittee on Revenue has been reviewing the tax systems deployed in other states and potential options for replacing ours. Over the past several weeks, Oregon Business & Industry and the Coalition for a Common Good have testified to the committee offering a variety of options for consideration. These options include several forms of a gross receipts tax and a modified gross receipts tax that allows for some deductions. Each has its advantages and disadvantages that will be weighed by the committee before a recommendation is made to the full committee in a couple of weeks.
One of the overarching issues in the building has been workplace conduct. After the accusations were made against Sen. Jeff Kruse (R-Roseburg) in 2018 that led to his resignation, there have been several investigations into sexual harassment, unlawful discrimination, and other problems revolving around the conduct of members, staff, and the lobby. The heightened focus on these issues is leading to action by leadership. On Tuesday, Rep. Mitch Greenlick (D-Portland), the longtime chair of the House Health Care Committee, ridiculed a lobbyist and his client during a committee hearing on pharmaceutical transparency. A colleague on the committee later raised criticisms about his behavior in the context of workplace conduct and bullying, referring to the whole host of issues the capitol is trying to address. Rep. Greenlick responded saying his colleague was “showboating” and tried to immediately end the hearing. The following day, Speaker Kotek announced she had removed his chairmanship and also removed Rep. Bill Post (R-Keizer) from the House Judiciary Committee over distasteful comments made on social media regarding a rally organized by gun control advocates.
The issues of workplace conduct will continue to be a major focus of the legislative session. Recently, two former legislative staffers have filed a lawsuit against leadership and legislative lawyers for not promptly addressing issues after they were reported. We expect these lawsuits to continue being a factor in the legislative session, and more may be coming. There are rumors going around the capitol that additional lawsuits are being considered and reporters are beginning to dig into those stories, some involving powerful lawmakers that could substantially reshape the balance of power in the building.
Intermodal projects have final review at OTC; Millersburg and Treasure Valley favored
The Oregon Transportation Commission (OTC) met Thursday, February 21 in Salem to hear the last presentations by the three intermodal site candidates and the review of consultants from the Tioga Group who were hired to take an independent look at each project.
Dan Smith and Frank Harder presented for the Tioga Group telling the commission that they would support both the Treasure Valley Reload Center in Nyssa and The Millersburg Reload facility in the Willamette Valley. Tony Hyde with the “Dedicated Projects Final Review Committee” said he would agree with the Tioga Group and had submitted his committee’s findings to the OTC. Hyde said that if Millersburg could not answer some strategic questions, then no funding should go to a reload facility in the Willamette Valley. He said the distance to Portland is too close for a reload facility in Brooks.
Union Pacific Railroad testified that they would be the Class I rail line for both the Nyssa project and the Millersburg project and that it would take approximately 12 months to get the rail lines operable. UP’s Cindy Robert said that the agricultural community had been unable to determine what volume they would ship, which made it impossible for UP to determine price. Phill Lindgren with the Oregon Seed Association testified in support of the Millersburg project, indicating that seed dealers would like the option of moving seed by rail. In the report of the Tioga Group, they cited that trucking prices could go down to remain competitive. It was estimated about 70 percent of the agricultural commodities would continue to truck.
Kevin Mannix with the Brooks site testified that the Tioga Group did not have all the information in reaching their conclusion and that they had been working with Portland & Western Railroad and could secure transportation into the Port of Coos Bay. Greg Smith, spokesman for the Linn Economic Development Group representing Millersburg, told the committee he had met with P&W this past week and was in communication with the Port of Coos Bay as well.
The OTC made no decision at the meeting and will take time to review the materials presented. Their next meeting is scheduled for March 21.
Legislative Report for February 15, 2019
Oregon lawmakers are wasting no time moving high-profile measures this session. On Tuesday, the Oregon Senate voted nearly along party lines (17-11; two Republicans were excused) to adopt a first-in-the-nation statewide rent control law. The measure bans no-cause evictions after a tenant has been living in the residence for more than 12 months and limits future rent increases to seven percent plus annual inflation. In previous sessions, rent control has been one of the most contentious political fights but is moving with relative ease in Salem this year. In fact, the bill has already been scheduled for a public hearing in the House on Monday, the minimum amount of time needed to move forward on a bill according to chamber rules. The swiftness of the process is emblematic of the seriousness of leadership to advance their aggressive agenda for session and to clear the way for more controversial issues later into the session.
Similarly, the Ways & Means Committee has already approved a series of health care assessments intended to balance the Medicaid budget. In previous sessions, these funding packages often become tied up in the legislative process for several weeks and months as deals are struck on other controversial issues to garner votes from Republican members. This session, however, the legislature is already advancing its funding plan—comprised of an increase to the hospital provider and insurance assessments and the creation of a new assessment on the stop-loss reinsurance policies paid by self-insurers—with bipartisan support. The governor and legislative leadership had committed at the beginning of the session to addressing the funding for the Medicaid program in the first eight weeks, and it appears they will meet their timeline early.
We are now six weeks out from the first major deadline of session. This means legislative committees will begin ramping up the speed at which they are holding hearings and votes on measures. Over the next several weeks, we are anticipating a rush of activity in committees trying to work bills or send them to the rules committees to put them on life support. Additionally, we are expecting to see activity around the cap-and-trade and tax reform proposals begin to take centerstage. The Joint Carbon Reduction Committee has announced it will be holding meetings around the state to hear from local communities on the impacts of proposed climate legislation. For tax reform, we are nearing the release of the initial modeling on several proposed options for a business entity consumption tax. Together, these two issues will become the most important and politically controversial issues of session. It’s no wonder leadership has made it a priority to get some of those other bills out of the way before these issues dominate the conversation.
Cap and Trade Policy—A Snapshot of Testimonies
This week the Joint Committee on Carbon Reduction heard invited testimonies from Transportation, Natural Resources and Industry Stakeholders on HB 2020, the bill aiming to enact a cap-and-trade policy that would decrease greenhouse gas emissions to a level 80 percent below 1990 emissions by 2050 in Oregon.
Testifying for the agricultural sector was Brenda Frketich with Oregon Farm Bureau who explained to the committee that the challenge with farming is that pricing of crops are not determined until they are sold leaving margins unknown throughout the year. She said farms must absorb the complete cost of fuel and natural gas. She noted that agriculture already sequesters carbon, yet the industry is not given credit in HB 2020. Ms. Frketich said despite spending months in 2018 working with the Governors Carbon Policy task force crafting language for the bill it does not exist in the bills current form. She added that an ag fuel exemption that was expected in HB 2020 was also notably absent.
Jana Jarvis, President, Oregon Trucking Association gave detailed testimony in opposition to HB 2020 for the trucking industry testifying that the trucking industry in Oregon pays the highest fees in the nation and that to add a cap and trade policy on top of the already implemented carbon reduction policy of 2016 will put the Oregon trucking industry at an unfair advantage. She also testified that currently the industry transports 80 percent of Oregon tonnage. Ms. Jarvis encouraged the committee to consider a diesel tax option instead that would be revenue neutral and protect the Highway Trust Fund.
There was additional testimony regarding the potential increase price of fuel and that bordering areas of the state will simply see consumers going to Idaho where gas will be up to $2 a gallon cheaper by 2030 if the cap and trade policy is enacted.
Testifying on the industry panel was Peter Saba, Senior Vice President of Schnitzer Steel. Mr Saba also testified in opposition to the carbon reduction bill, telling the committee that their Cascade steel plant in McMinnville produces steel from recycled scrap metal. He added that 90 of the mill’s electricity comes from non-carbon sources and they also use natural gas. He said that even though steel mills are included in the EITE’s (emissions-intensive trade-exposed) they would still begin incurring raising costs in the first year. He also questioned the ambiguity of the bills language and said he would like the bills specifics spelled out in statute and not left to rule making.
Schedule of Hearings
The Committee announced they will be taking the committee on the road with hearings around the state including:
- Springfield: Friday, Feb. 22 – Springfield City Hall, Council Chamber (12 pm – 3 pm)
- Medford: Saturday, Feb. 23 – City Council Chambers, Medford City Hall (9 am – 12 pm)
- Remote: Monday, Feb. 25 – Remote testimony (live video feed from Newport and Baker City), Oregon State Capitol (TBD)
- The Dalles: Friday, March 1 – The Dalles Civic Auditorium, Community Room (12 pm – 3 pm)
- Bend: Saturday, March 2 – Central Oregon Community College, Cascade Hall, Room 246-248 (9 am – 12 pm)
To watch the full hearing go here> http://oregon.granicus.com/MediaPlayer.php?clip_id=25756
Legislative Report for February 8, 2019
Like many other states, Oregon lawmakers have been grappling with workplace harassment concerns for more than a year now after revelations by Sen. Sara Gelser (D-Corvallis) about inappropriate conduct by male colleagues, which was followed by an outpouring of similar stories from other women lawmakers, staff, and lobbyists. The heavy microscope on these issues, combined with a scandalous report from the Bureau of Labor and Industries at the end of Commissioner Brad Avakian’s term, has increased scrutiny on the handling by legislative leadership and human resources of sexual harassment concerns. Leadership is working to correct some of the systemic issues in the Capitol and began this week by beefing up a training for members and staff on appropriate workplace conduct. Unfortunately, the training has appeared to heighten, rather than alleviate, tensions after a hired trainer failed to address critical issues and protocols for handling them. House Speaker Tina Kotek (D-Portland) responded swiftly to these concerns by firing the trainer, who was scheduled to give additional seminars next week. It appears the controversy regarding these issues will continue for the foreseeable future.
Many committee hearings were not scheduled this week because of the workplace training seminars, leaving the remaining committee activities focusing on niche issues. With that said, there were several major proposals that began moving forward in the legislature.
- On Monday, the Senate Housing Committee advanced, along party lines, a proposal to impose the first-in-the-nation statewide rent control policy. SB 608 would prohibit landlords from evicting tenants without cause after renting for a year and limit rent increases to seven percent plus inflation.
- On Thursday, the House Health Care Committee advanced a much-awaited package of health care assessments designed to balance the Medicaid budget. HB 2010 consists of an increase to the existing hospital and insurance premium assessments, as well as a new assessment on stop-loss reinsurance. The bill will now move to the Joint Ways & Means Subcommittee on Human Services for further review.
Separately, the legislature will consider an increase of $2.00 to the tobacco tax and a surcharge on employers that do not provide a sufficient level of health care benefits to their employees.
- Also on Thursday, the state’s largest business association provided a high-level overview of a proposal to raise taxes on Oregon businesses. The concept, a counter to the repeated attempts to enact a gross receipts tax, suggests taxing businesses based on their gross receipts minus their purchases from other firms. The plan is designed to address the concerns of pyramiding in a gross receipts tax, where the tax is compounded and ultimately paid for by the consumer at rates several times higher than the statutory rate. The association said multiple times it is unsure if its members would support the concept being suggested but want to be part of the ensuing tax reform debate. In addition to the concept, the association tied substantial spending reforms, such as public pensions, and tax relief as a precondition for their support to any broad business consumption tax. It is unclear, however, if the Democratic supermajorities will have the appetite to incorporate such reforms as part of their end-of-session package.
Looking ahead to next week, leadership is likely to cancel the workplace conduct trainings. Additionally, the weather may be a factor in deciding the tempo of the building next week. Forecasts predict snowfall in Northwest Oregon over the weekend and throughout the week, and if the past is prologue, the legislature could grind to a halt at the first signs of inclement weather.
Oregon Department of Agriculture holds budget hearings
Alexis Taylor, director of the Oregon Department of Agriculture, spent three days in front of the Ways and Means Subcommittee of Natural Resources presenting the department’s budget (HB 5002) fee structure (HB 5003).
Director Taylor presented four areas of the department’s budget: 1) Administrative and Support Services; 2) Food Safety and Consumer Protection Programs; 3) Natural Resource Programs; and 4) Market Access, Development, and Certification Programs.
There was public support given to the agency’s budget on Wednesday, including a letter of support from Katie Fast of Oregonians for Food and Shelter, who was joined by 12 other agriculture groups supporting the budget with amendments. You can view the support letter here.
Sen. Lew Frederick (D-Portland) voiced concerns regarding the use of M44 in the Predator Control Program and asked about their use in relationship to the budget. Rep. David Brock Smith (R-Port Orford) asked Director Taylor questions regarding the fee-for-services increase in the previous budget for the Kentucky 31 investigation. Director Taylor told the committee that the use of M44 was through county funding and supplied a list of the counties contributing to the APHIS Program. She also told Rep. Brock Smith that the K31 investigations had been dense and had required more paperwork than recently anticipated but that the investigation would be concluding soon.
For a complete look at the ODA 2019-2021 budget, click here.
Carbon Reduction Committee update
This week, the Carbon Reduction Committee began discussions through invited testimony on the newest bill language regarding the Oregon Cap and Trade bill, also known as Cap and Invest, the Clean Energy Jobs Bill, or Oregon Climate Action Program, depending on who you ask. Much of this week’s discussion focused on the gas tax proposals, which would be on top of the gas tax increases passed as part of the 2017 Transportation Package. Concerns for the legislation’s potential for disproportionate negative impact on rural Oregon is already increasing. Over the next two weeks, the committee will be hearing from invited testimony regarding the bill concepts. It was announced that the Joint Carbon Reduction Committee will be arranging public hearings throughout the state on the legislation. The locations and times are currently being finalized and will be announced soon.
The Joint Ways and Means (state budget) Subcommittees continued their Phase I budget reviews. Traditionally, the budget review process is taken in three stages. Phase I includes agency overview presentations and recaps on the current budget. Phase II contains discussions on budgetary issues, drivers, and related topics. Phase III is the finalization and passage of the new biennium budgets. Public hearings with invited testimony are usually included in each phase. This week, the various subcommittees held budget discussions related to the following agencies and boards: Board of Dentistry, Board of Licensed Social Workers, Board of Chiropractic Examiners, Health Related Licensing Boards, Mental Health Regulatory Agency, Long-Term Care Ombudsman, DHS – Intellectual and Developmental Disabilities, Overview of the Medicaid Provider Tax Programs, Department of Agriculture, Department of Consumer and Business Services, Department of Administrative Services, Employment Relations Boards, Criminal Justice Commission, and Board of Parole and Post-Prison Supervision.
Legislative Report for Friday, February 1, 2019
Lawmakers have settled into the Capitol and have the gears of the legislature running on all cylinders. The committees have mostly completed their agency and policy orientations, and are preparing to schedule hearings on hundreds of bills poised for consideration. Among those bills are billions of dollars’ worth of appropriation requests for the legislature to consider. In fact, Sen. Betsy Johnson (D-Scappoose) penned an opinion article in the Portland Tribune from her vantage point as one of the co-chairs of the Ways & Means Committee. She writes that in one day she received more than $750 million in funding requests from various interest groups and that commitments from the past, like pensions, always include a price tag. “There’s a lesson here for lawmakers,” she writes. “Be careful which laws you pass. Your constituents will be forced to live with—and pay for—the consequences.”
Finding the funds to pay for those appropriations will be one of the central debates of the legislative session. It has not taken long for the legislative work on taxes to get underway. The Joint Committee on Student Success was created in 2018 to design a plan to improve outcomes in the public schools systems and devise ways to adequately fund those investments. The Joint Committee has spent the past year traveling around the state fielding input from local communities on needed investments in their schools. The committee has returned to Salem with not only that input but a menu of investment options for lawmakers to consider. As part of the bicameral process to tackle these issues, leadership has created several subcommittees to tackle the major policy questions needing to be answered before an investment plan can be outlined. Among those subcommittees, and possibly the most important one, is a group that will exclusively consider a business entity consumption tax as the funding mechanism for those investments. The subcommittee began its work this week with a high-level briefing on the variety of business taxes considered.
The Joint Committee on Carbon Reduction has been working on designing a state cap-and-trade program. The committee held meetings throughout the interim to engage with economists and environmental scientists about design options and considerations for implementing a carbon pricing regime. After months of these discussions, the committee held a hearing this afternoon to release its initial draft of the enabling legislation. Well before the hearing, however, Republican lawmakers criticized Democratic leadership in the committee for cutting them out of the drafting of the bill. This is only the beginning of the rhetoric we will soon be hearing as the political fight deepens. There will be a presentation on the economic impacts of the proposal on Friday, February 8.
The legislature is preparing for a busy week ahead. In the House Health Care Committee on Thursday, lawmakers will be briefed on a proposal to fully fund the Oregon Health Plan. Currently, this funding package will propose increasing the current hospital and insurance assessments. In addition to those existing taxes, there will be a new tax on the reinsurance policies of self-insured plans and an assessment on employers not providing a certain level of health care benefits to their employees. Leadership has set an ambitious goal of moving the funding package through the legislature in the first eight weeks of session. Separately, there will be legislation introduced to increase the tobacco tax by at least $2 to fill the gap in Medicaid funding.
It will take some time for the legislature to figure out how to operate under the dual supermajorities. If every member voted as a rank-and-file member of their caucus, Democrats would have the votes needed to pass any and all taxes proposed for this session. In the past, Republican support was needed to move controversial tax measures and those votes would be use as leverage to control other measures in the legislature. This year, however, that negotiating power is largely in the hands of centrist Democrats who see themselves as the decisive votes on major legislation.
Legislative Report for January 25, 2019
Oregon lawmakers commenced their annual legislative session this week, two weeks earlier than the previous session. In 2018, the legislature passed a bill allowing lawmakers to begin the session immediately following their organizational days to prevent the final days of the five-month session from overlapping with the Independence Day holiday. Despite the earlier start date of the legislature, the chambers maintained their usual schedule for releasing legislation, cutting out the customary two-week review period of bills before activity in the Capitol begins.
The committee activity in the Capitol this week mostly revolved around orientations and agency introductions. Unlike sessions of the past, committees are giving their members a more detailed crash course on the policy topics they will be discussing. This change in the start of session is likely a reflection of the high amount of turnover in the legislature and wanting to make sure the new members have an opportunity to learn the people and the issues. Will this actually result in more informed policy? Time will only tell, but these briefings will provide at least a baseline understanding of the issues throughout session.
The calm in the building will not last long. Over the next several weeks, lawmakers are poised to begin discussing some of the most complex and controversial policies in recent memory. Several liberal advocacy groups have set their sights on a robust policy agenda for session to take the dual supermajorities for a test drive on a whole host of issues. Democratic leadership has been trying to temper some of those expectations, understanding the trading that will need to occur to maintain the peace among their rank and file members. Meanwhile, the Republican caucuses have largely lost their ability to meaningfully influence the legislative process by denying critical votes on tax issues. With that said, there some members who are warming to the idea of working alongside the supermajority in the hopes the goodwill will allow them to advance their priorities for their districts. Democrats may not need Republicans to move forward on their ambitious agenda, but there continues to be immense political value in courting bipartisanship to stave away potential ballot measure threats on issues such as a revenue package, a tobacco tax increase, and a Medicaid funding plan. As your lobbyist, our strategy for this session will largely revolve around working with moderates in both chambers and caucuses who are focused on passing substantive policies that move the state forward and encouraging them to fight for your interests in Salem.
Gov. Kate Brown’s first public testimony: campaign finance reform
On the first day of committee hearings in the new Senate “Campaign Finance Committee,” Gov. Kate Brown testified on her campaign promise to get big money out of politics by enacting campaign finance reforms. She testified to the committee that her goal is for incresed transparency in reporting and a contribution cap. The committee, chaired by Sen. Jeff Golden (D-Ashland) and Vice-Chair Tim Knopp (R-Bend), will spend the session looking for a path forward to reform campaign finances.
It is unusual for a governor to testify often in committee hearings, but as an integral part of her campaign goals, Gov. Brown told the committee that this reform is at the top of her priorities to ensure that every Oregonian has a voice. She said that can start with paid postage on ballots so that every mailbox is a ballot box.
Gov. Brown acknowledged that her last race for Oregon Governor was the most expensive candidate race in Oregon’s history and that she alone had raised six times more than any of her Democratic predecessors. She said Oregon needs to follow other states in initiating a cap on contributions.
She noted to the committee that “dark money” coming into Oregon needs to be reported with real-time technology and not with 30-day gaps so that Oregonians can “follow the money.” She said that “dark money”—referring to money by third-party donors or nonprofits who don’t have to report where money comes from or how it is spent—makes our current system comparable to the “Wild, Wild West.”
Gov. Brown said she is frustrated at the interpretation of Oregon’s Constitution that has not allowed previous attempts at reform and is optimistic to work with the committee and legal experts on the best path forward. She said that any reform to campaign finances will need to go to the voters in 2020 as a Constitutional Amendment.
Matt Garrett resigns as Director of ODOT
It was a resignation that came as a surprise to many when Matt Garrett, Director of the Oregon Department of Transportation (ODOT), turned in his resignation letter last week to the Governor. Garrett began his career at ODOT in 2005 after working for U.S. Senator Mark Hatfield. He has served under three governors during his tenure at ODOT. In 2017, he led the agency in their work with the legislature in passing a historic transportation package of which Gov. Brown said Oregonians will see the benefits for decades to come.
What does the departure of Garrett mean to the Oregon Department of Transportation? It’s hard to know. One would expect a nationwide search will ensue and expect there to be changes at the top of the agency staffing positions. ODOT could very well be the agency most important to Oregonians as not only does it ensure a vital and safe transportation infrastructure so important to the trucking and exporting of Oregon agricultural products, but it is also the agency that creates the most jobs for Oregon’s workforce. Garrett will stay on as Director through most of the 2019 session. Stay tuned for more as the Governor begins the search for his replacement.