Effort to Align Oregon Family Leave Laws Progresses
SB 999B, which would make changes to both the Paid Family Medical Leave Insurance (PFMLI) program and the Oregon Family Leave Act (OFLA), passed the Senate Committee on Rules unanimously. OBI does not expect any further changes to the bill as it moves through the Senate floor and over to the House. We will begin some educational efforts to inform employers about the changes in the bill. Notably, the bill provides some concurrence and definitional alignment between OFLA and PFMLI. However, it doesn’t go far enough. An interim process will begin soon with an eye toward a 2024 bill to truly consolidate the programs.
SB 340 is the portion of the Organized Retail Crime Task Force’s legislative package that would change Oregon’s criminal code to make it easier for law enforcement to prosecute organized retail crime and bolster criminal penalties to better protect employees and customers at retail establishments. The House Judiciary Committee will hold a hearing on the bill this Wednesday, April 26.
$20 Billion Universal Health Plan
SB 1089 passed in the Senate Rules Committee April 20 by a 4-1 vote. This is the new vehicle to establish a Universal Health Care Governing Board (UHCGB) to continue the work of the Task Force on Universal Health Care by presenting a comprehensive plan for a single-payer universal health plan (UHP), including a funding plan, by Sept. 15, 2026. In passing the bill, the committee adopted the -1 amendment, which includes a directive to the UHCGB to identify strategies that would allow employers to offer benefits directly while also contributing in some fashion to universal care for Oregonians. As a reminder, the final report presented by the Task Force on Universal Health Care suggested a UHP would cost more than $20 billion per year, which the state would fund through new and increased taxes. About $10 billion would come from an exorbitant employer payroll tax, and about $10 billion would come from increased taxes on individuals. The bill now heads to the Joint Committee on Ways and Means due to the fiscal impact associated with administering the UHCGB’s work ($1.86 million in 2023-25). During the Rules Committee discussion, Sen. Elizabeth Steiner, D-Portland, co-chair of the Joint Committee on Ways and Means, expressed her unequivocal support of the bill. OBI has routinely opposed efforts towards a single-payer system. Katie Koenig’s latest comments in opposition are here.
The next revenue forecast is May 17, at which point serious attention will turn to finalizing the budget. The session started with some degree of cooperation and compromise on investments, including the semiconductor and homelessness funding packages. However, we now see increasing levels of disagreement as the real budget-setting draws near. For example, Gov. Kotek last week called on legislators to use more than $700 million from the state’s rainy day fund to meet her requests for additional spending on housing, early literacy and behavioral health programs. While these issues are priorities for many legislators, the state’s top budget writers do not seem (as of now) inclined to tap the rainy day fund at all. Additionally, Gov. Kotek disagrees with the use of $1 billion in state bonding capacity for the I-5 bridge project and would rather that capacity go to housing. The rhetoric around these disagreements will likely increase as the May 17 forecast approaches.
Twin bills that OBI supports received hearings in the Joint Committee on Tax Expenditures last week. HB 2066 and SB 144 would extend the sunset date (to 2032) for Oregon’s five-year property tax exemption for food processing machinery and equipment. While most people outside of food processing are unaware of this tax credit, it is an integral piece of Oregon’s competitive success in a rapidly growing sector of our manufacturing economy. These credits are more important than ever given the increased tax and regulatory burdens facing Oregon businesses. We expect one of these two bills to pass this session. You can read Scott Bruun’s testimony here.
Warehouses and Fulfillment Centers
HB 3568, which would broadly limit the use of quotas and performance metrics in many industries in Oregon, was heard by the House Committee on Rules on April 18. OBI and a coalition of industry partners testified in opposition. Though no subsequent hearing or committee vote is currently scheduled, OBI and the coalition will continue to oppose this bill. Because it is in the House Committee on Rules, it could be scheduled for a vote at any time.
As a reminder, of the 12 states that have some form of estate tax, Oregon’s is effectively the harshest. Its $1 million exemption level is the lowest of those 12 states. Even Washington’s is exempted at $2 million with an index for inflation. But the idea of some reform to the estate tax in Oregon is still alive. Last week the Senate Finance and Revenue Committee had another hearing on SB 498, which would exempt natural resource-based family businesses (i.e., farms, woodlots, commercial fishing boats) from Oregon’s estate tax. Amendments were introduced that would allow full exemption for these family operations if the business was held by the family for at least five years following the death of the principal. Scott Bruun testified in support of the bill and the amendments. Whether it is this or another bill, OBI continues to believe that estate tax modifications may be taken up following the May 17 revenue forecast.
R&D Credit Hearing
Thank you to several OBI members who provided live and written testimony in favor of a robust R&D tax credit during last week’s hearing on SB 5 in the Joint Semiconductor Committee. Especially on complicated matters, direct business testimony provides a perspective that is critical for legislators to hear. We remain confident that an R&D tax credit will pass this session, which is notable. However, our job between now and then is to make sure it is the most robust, inclusive and effective credit as possible. Only then will it truly improve Oregon’s competitive position.