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Negotiations Stall as Walkout Passes One-Month Mark

With the walkout by Senate Republicans passing the one-month mark this weekend, the 2023 legislative session appears increasingly likely to remain stalled until its constitutionally mandated June 25 conclusion.

Gov. Kotek spent several days in late May negotiating a truce between Democratic and Republican leaders. On May 31, however, she announced that the effort had hit a wall, as Republicans refused to return unless House Bill 2002 was significantly changed or killed. The bill guarantees access to abortion and gender-related medical care. It’s a top priority for Democrats and the governor.

The governor now is focused primarily on the state budget. If a budget doesn’t pass before the end of the session, the Capitol Chronicle reports, she’ll summon legislators for a special session to approve one. In the meantime, she has said she does not intend to call in the Oregon state police to find missing senators, which she has the authority to do. Senate Democrats have begun fining Republicans $325 for every day they’re absent.

Senate Republicans have not been completely idle, however. Along with House Republicans, they have created an unofficial committee to investigate corruption. The Joint Committee on Oversight and Accountability duly met June 1. When the time came for public comment, roughly a dozen people told Republicans to end their walkout and get back to work.

 

Legislative and Rulemaking Updates

Contractor Liability: HB 2057 would hold general contractors liable when subcontractors failed to pay wages owed to their employees. The bill narrowly passed the House, and just prior to a key deadline the Senate Committee on Labor and Business voted to move it to the Senate Committee on Rules to keep it alive. If it had gone to the floor, it would have died. The bill has since languished at the Senate president’s desk, failing even to complete its trip to Rules. OBI and other stakeholders have consistently argued that its provisions would raise construction costs, increase litigation and limit new and smaller subcontractors’ ability to break into the construction industry.

Warehouse Bill: The so-called “Warehouse Worker Protection Act” is stalled in the House Committee on Rules. HB 3568, which would limit warehousing employers’ ability to use performance standards, has seen no movement since its public hearing in mid-April. OBI opposes the bill because its overly broad requirements would harm employers and replicate existing wage, hour and workplace laws. The bill’s failure to advance is a good sign.

Retail Theft: Two funding bills that are part of the organized retail theft package are moving through the process. SB 900, which would set up a grant program available to local governments to bolster retail crime sting operations, moved through the Joint Committee on Ways and Means June 2. Its companion bill, SB 318, would fund an analyst and two investigator positions within Oregon Department of Justice to help coordinate prosecution of organized retail theft. It has been assigned the public safety subcommittee of the Joint Committee on Ways and Means, a sign that it’s moving forward. A vote for that bill should happen in the next week or two, though both bills ultimately would have to pass the paralyzed Senate.

Estate Tax: OBI is pleased that SB 498A passed out of the Senate Committee on Finance and Revenue last week. The bill would exempt the first $15 million of assets from estate taxation for agricultural and natural resource family businesses if those businesses remain in family hands for at least five years after an owner’s death. This would be a huge step forward in OBI’s effort toward broader estate tax reform. SB 498A would protect family farms, family fishing businesses and family forestlands, all of which are integral to Oregon’s culture and economy.

Universal Health Plan: The Joint Committee on Ways and Means has moved SB 1089, an unfortunate piece of legislation that now heads to the Senate. It is the vehicle to establish a Universal Health Care Governing Board to continue the work of the Task Force on Universal Health Care. The bill would require the governing board to present a comprehensive plan for single-payer health care, including a funding scheme, by Sept. 15, 2026. The final report presented by the Task Force on Universal Health Care suggested such a plan would require new and increased taxes in excess of $20 billion per year. About $10 billion would come from an employer payroll tax, and the balance would come from increased taxes on individuals. OBI expects to see this bill in a future session if does not progress because of the walkout.

Debt Collection: HB 2008 would shield a substantial number of Oregonians from debt recovery and harm small businesses, medical providers and retailers. Fortunately, the bill has not budged since a second public hearing in late April.

Property Taxes: OBI testified in support of the -1 amendments to HB 2080 last week in the Joint Tax Committee. The amendments would do several positive things. These include extending sunset dates for multiple abatement programs, expanding the food processing equipment abatement program and expanding low-income rental housing tax abatement. OBI expects the amendments to be adopted during a work session this week. Following committee passage, the bill would go to the House.

Economic Development: Discussions about Oregon’s economic development tools continue, mostly in the Joint Tax Committee. Hearings were held recently on HB 2009 and SB 1084, which represent two different approaches to key economic development and job creation matters. Both include components relating to research and development tax credits, enterprise zones, opportunity zones and Oregon’s Strategic Investment Program.

HB 2009 is a new bill introduced by House Speaker Dan Rayfield and Joint Tax Committee Co-Chair Nancy Nathanson that would do several things. It would create a limited research and development tax credit that would be available only to the semiconductor industry. It would disconnect Oregon from the federal opportunity zone program. And it would place new limitations on enterprise zones and the Strategic Investment Program. In its current form, HB 2009 is a bad bill that would perpetuate competitive mediocrity. The testimony at the hearing was overwhelmingly against HB 2009.

In contrast, testimony in support of SB 1084 was overwhelmingly positive. The root component of SB 1084 is a robust research and development tax credit written by OBI. The bill also would extend the sunset date for the enterprise zone program and the Gain Share program, integral to the continued strength of Oregon’s Strategic Investment Program.

The committee’s co-chairs, both Democrats, have different ideas about the path forward. OBI understands that amendments for HB 2009 are being drafted in an attempt at compromise. OBI will review all proposals carefully, but it’s hard to see anything other than SB 1084 as the best path forward for Oregon’s economic vitality.

 

Notable News

Debt Ceiling: President Biden on June 3 signed a debt-ceiling and budget-cut package in advance of the June 5 default deadline, Reuters reports. The bill restricts spending for the next two years and suspends the $31.4 trillion debt ceiling into January 2025.

Oregon Budgets: The Oregonian takes a look at what will happen with state spending if the Legislature fails to pass a budget by the June 25 conclusion of this year’s session. State government would operate under a continuing resolution through Sept. 15, albeit with some significant modifications. If the Legislature fails to pass budget bills before the session ends, the governor has the authority to call lawmakers back for a special session to finish the job.

Kicker Bills: Legislative Democrats have introduced a handful of bills that take aim at the personal income tax kicker, the Statesman Journal reports. Among these are SJR 26 and SB 774, a pair of linked bills about which OBI’s Scott Bruun testified May 31. SJR 26 asks voters to amend the Constitution and eliminate the kicker. SB 774, which would go into effect only if SJR 26 passed, repeals the kicker beginning with the 2023-25 biennium. Another bill, SB 502, would require the Oregon Department of Revenue to distribute $1,000 payments to all Oregon taxpayers rather than basing refunds on the amount of taxes paid. Oregonians are expected to see a $5.5 billion kicker in 2024.

Battery Project: OBI member Portland General Electric announced May 31 that it has closed a deal with Mortenson to build a 75-megawatt battery energy storage system in Hillsboro, the Portland Business Journal reports. This follows an announcement in late April that PGE will invest in a pair of 200-megawatt battery storage systems, one in north Portland and the other in Troutdale.

Daimler Partnership: OBI member Daimler Truck and Toyota announced May 30 that they will partner to work on new technology, including using hydrogen fuel, to reduce emissions, the Associated Press reports.

 

OBI Member Profile: Hillsboro Hops

Like the team’s namesake vine, the Hillsboro Hops are growing quickly. Two years ago, following a promotion to Minor League Baseball’s High-A level, the team’s season doubled in length. And within the next two years, the Hops hope to complete a stadium that will feature 33% more seating than Ron Tonkin Field, the team’s home since 2013.

If mascot Barley T. Hop isn’t the hardest-working flower in Oregon already, he soon will be.

Go here to learn more about the Hops’ new facility, the team’s economic impact and its connection to Salem, where it helped launch the career of a National Baseball Hall of Fame catcher.

 

Webinar Video: Regional, Community Banking in Oregon

If you follow the news, you know that three banks have failed this year – First Republic Bank, Silicon Valley Bank and Signature Bank. You also know that regional banks like PacWest Bancorp have struggled in what some have called the biggest crisis to hit the U.S. banking sector since 2008.

This might sound a bit alarming. But what does it mean for community and regional banks in Oregon and the businesses that work with them?

On June 1, the CEOs of three Oregon-based banks joined Oregon Bankers Association President and CEO Linda Navarro for a panel discussion, “Banking in the News: What Does this Mean for Community Banking in Your Area?”

The panel included:

If you missed the webinar, you can check out a video recording on OBI’s website here.

 

OBI Members Can Save on Furniture, Supplies and More with New Benefit

Whether your business wants to save on office furniture, cleaning supplies or remote working technology, OBI’s partnership with ODP Business Solutions can help.

After setting up an online account, OBI members can shop for a wide range of goods and services and even receive free next-business-day delivery on qualifying orders of $50 or more. To make the process as simple as possible, ODP provides experienced account managers and a range of payment options, including single account billing and consolidated billing for multiple locations.

Go here to learn more about this benefit and register for an account.