This edition of Capitol Central includes the latest policy news from Salem. |
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2022 Legislative Session in Review |
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When Oregon voters agreed to create annual sessions 12 years ago, they were told that the even-year short session, limited to 35 days, would focus on emergency matters and budget rebalances. Complex policy bills and less pressing issues could wait for the long session, where they would be handled at a more leisurely pace over a 160-day period.
With every even-year session, Oregonians learn anew how far we are from that design. Not only are significant and complex bills introduced even when they are not urgent, but the volume of proposals combined with the compressed legislative schedule make advocacy a mad scramble.
More than 250 bills were introduced during the 2022 short session, which ran from Feb. 1 to March 4. Some of them involved narrow technical fixes, including one that would allow pharmacy employees conducting pseudoephedrine sales to collect required information by swiping customers’ driver licenses. Another narrowly tailored bill, which responds to the ongoing workforce crisis, allows employers to offer hiring and retention bonuses without undergoing complex equity analyses required by Oregon’s Equal Pay Act. Unfortunately, though, the extension ends in October.
Other bills called for new policies better suited to next year’s long session due to complexity, costs and breadth of impact, and they were successfully tabled this session. For example, one bill would have created a 3% sales tax to fund monthly payments to low-income people. Others would have undermined franchise agreements or banned petroleum diesel by 2029.
Several significant policy bills passed, short session notwithstanding. Most notably, a bill passed that eliminates the agricultural overtime exemption and could cripple small farmers while cutting hours and income for agricultural workers. It’s a lose-lose that was adopted without significant negotiation or compromise. On the more positive side, a significant investment in workforce training was passed, which we hope will result in collaborative approaches that benefit employers and employees.
Often, the success of OBI’s advocacy team can’t be measured in the passage of good bills and the failure of bad ones. It’s evident, rather, in the improvement of bills that could have done significant harm. One example is a bill involving settlements and nondisclosure agreements. Among other things, it would have eliminated the confidentiality requirements of mediation. By no means is the end result a good bill. But it’s significantly less terrible than it could have been, which in an unbalanced Legislature is sometimes the best that can be hoped for.
The bills mentioned here, and many more worked on by OBI staff, appear below. These are the most significant bills tracked by OBI’s policy team this session, and we have shared their progress (or lack thereof) and the policy team’s engagement in our weekly legislative updates, which can be found on our 2022 Legislative Session page.
The policy committees that support OBI’s policy team deserve to be recognized for their contributions as well. The committees, composed of OBI members, provided invaluable subject-matter expertise during a frenzied month, spotting technical flaws in bills as well as policy landmines.
Know that our work doesn’t end here. Although the Legislature adjourned this session, our team continues to work on numerous other regulatory efforts affecting businesses, and we are already working on a positive business agenda for the next session. The team is also turning some attention to the 2022 election cycle, which is fast upon us. Visit our website to learn more about our policy committees, political action committees, and other advocacy work.
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Education and Workforce
SB 1539 (Support): Did not pass. A pilot program created by this bill would have used state education funds to provide support and wraparound services for homeless students in seven districts. The bill appeared to have broad bipartisan support.
HB 4124 (Watch): Passed. This bill requires the Department of Education to review how districts administer student assessments, then recommend best practices. The bill also requires the department and state Board of Education to review standards related to the disclosure and transfer of information in education records
SB 1521 (Watch). Passed. This bill allows school district boards to terminate superintendents without cause only if certain conditions are met. It prohibits boards from taking specified actions against superintendents in response to actions involving schools that comply with local, state or federal law.
SB 1545 (Support): Passed. This bill, Gov. Brown’s “Future Ready Oregon” proposal, directs $200 million to workforce development programs. It will expand apprenticeship opportunities and create grant programs to support workforce development activities in health care, manufacturing and other industries. Following discussions with OBI, an amendment was adopted in late February allowing workforce providers and community-based organizations to partner with industry associations to develop and administer workforce-ready grants in targeted industries. This change partially addresses a limitation of the bill pointed out by OBI and others: It provides long-term training as a response to an immediate workforce shortage.
SB 1583 (Watch): Passed. This bill directs the Department of Education to ensure that standardized summative assessments are administered to minimum extent practicable. It directs the department to apply for waivers of assessment requirements. The bill anticipates the use of the NAEP assessment to track the progress of K-12 students.
SB 1590 (Support): Did not pass. It would have directed the Department of Education to work with the STEM Investment Council to develop a statewide, long-term strategic plan to provide computer science education. It would have integrated computer science education in schools, established curriculum standards and given all students the opportunity to participate.
For questions about education and workforce bills, contact Morgan Beltz.
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Health Care
SB 1529 (Support): Passed. This bill requires individual and group health insurance policies to provide reimbursement with limited copayments for at least three primary care visits annually in addition to one annual preventive primary care visit. This bill exempts the Public Employees Benefit Board and Oregon Educators Benefit Board plans primarily because of costs. The bill reflects heavy negotiation by our payer and provider partners with the goal of lowering costs in the long run by investing in preventative care. It returned this session after failing to pass 2021.
SB 1530 (Oppose): Did not pass. This bill would have required health insurance coverage for specified fertility services and treatments. It would have required small and large employers and individual health benefit plans to cover a wide range of fertility services without cost sharing or coverage caps. If passed, as OBI testified, this bill would have compromised employers’ ability to offer other benefits that would better address the needs of their employees. We expect a similar bill to appear in 2023.
HB 4006 (Oppose): Did not pass. This bill would have required health insurance plans to reimburse naturopathic services at the same rate as those provided by licensed physicians. This bill has been introduced – and has died – in other sessions. Opponents point out that differences in licensing requirements make pay parity inappropriate. We expect that it will return.
HB 4101 (Watch): Did not pass. This bill would have increased non-smoking buffers next to businesses and public places from 10 feet to 25 feet. The bill did not exempt establishments that hold licenses issued by the Oregon Liquor and Cannabis Commission. Washington, California and six other states have increased buffers in this fashion, and we expect similar legislation to return in Oregon.
HB 4134 (Support) Passed. This bill requires insurers and health care service contractors to cover labor and delivery services provided at out-of-network health care facilities if patients were diverted there as a result of a public health emergency. This bill addresses a hospital-capacity problem encountered by women during the COVID pandemic.
HB 4035 (Watch): Passed. This bill requires the Oregon Health Authority, in collaboration with the Department of Human Services and Department of Consumer and Business Services, to develop and implement a process for conducting medical assistance program redeterminations when the federal public health emergency ends. The bill also establishes a task force to create an essential health benefit plan and make recommendations to the interim legislative assembly by July 31.
For questions about health care bills, contact Morgan Beltz.
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Employment and Labor
HB 5202 (Watch): Passed. In addition to numerous other provisions, this 114-page budget-rebalance bill gives the Bureau of Labor and Industries $684,500 to pay for an intake position and for technical assistance for employers. It is focused on communication with and education of employers on age-discrimination matters, not enforcement. This enhanced focus has been a longstanding goal of AARP.
HB 4152 (Oppose): Did not pass. This bill would have unraveled franchise agreements and prevented the enforcement of consistent standards among franchises. In essence, this bill would have allowed businesses to use the franchise logo but not adhere to any other brand standards. We do expect this issue to come back again in future sessions.
HB 4157 (Watch): Passed This bill directs the Department of Revenue to provide one-time payments to low-income families to address the economic impacts of the COVID pandemic. Legislators expect that payments will reach recipients no later than July.
HB 4002 (Oppose): Passed. This bill will remove the long-standing agricultural exemption from overtime, ensuring problems for farmers and ranchers, who do not have the ability to increase prices to adjust to cost increases. Meanwhile, agricultural labor needs are dictated by nature. This bill will reduce hours for workers, increase administrative burdens for farmers and harm one of Oregon’s largest industries. As amended during the legislative process, the bill will phase in overtime payments after an employee has worked a certain number of hours each week. In 2023 and 2024, employers will pay overtime for hours in excess of 55 per week. In 2025 and 2026, they will pay overtime for hours in excess of 48 per week. And starting in 2027, employers will pay overtime for hours in excess of 40 per week. The bill also will establish refundable tax credits for agricultural employers required to pay overtime. The tax credits generally favor smaller employers and dairies and decrease over time. The House approved this bill on a party-line vote, with Republicans in opposition. The Senate did the same, though Sen. Lee Beyer, D-Springfield, joined Republicans in voting “no.”
SB 1512 (Oppose): Did not pass. This bill would have prohibited employers from taking job applicants’ juvenile records into consideration. The bill was overly broad and ignored the needs of employers who handle sensitive personal information or work with vulnerable populations. Senate Republicans had offered a minority report proposing a task force to study the issue. OBI supports the creation of a task force that includes employers, who were not included in the group that developed the bill. We expect to see this or a similar concept in a future session and hope we can be at the table to craft a workable solution.
SB 1513 (Watch): Passed. As introduced, this bill would have required bakeries and tortilla makers to give employees a two-week notice of required overtime shifts. This requirement does not recognize the workforce realities of such businesses, which must react quickly to staffing shortages. Following input from OBI, an amendment to the bill reduced the mandatory two-week notice with a five-day notice. The provisions of the bill are enforceable only through a complaint to the Bureau of Labor and Industries.
SB 1514 (Support): Passed. Originally a placeholder, the bill became a vehicle to further delay a particularly counterproductive provision of the Oregon Equal Pay Act that requires employers to adhere strictly to equity requirements when giving hiring and retention bonuses. If required to do a complex equity analyses before giving bonuses, businesses would end them, harming both employers and employees. When the legislative session began, such analyses would have been required as of March 1. They will now be delayed until October. The governor is expected to sign the bill, thereby extending the exemption, on March 7.
SB 1586 (Watch): Passed. As introduced, this bill would have been very damaging. It would have created an unlawful employment practice if an employer even asked an employee to enter into a settlement agreement that required the nondisclosure of certain elements. It would have eliminated the confidentiality requirements of mediation, and it would have encouraged litigation by guaranteeing $5,000 in damages even when the individual failed to prove any damages. Through extensive negotiations, OBI helped eliminate some of the bill’s most damaging components. Employers and employees may now negotiate the inclusion of settlement amounts in nondisclosure agreements, for example. As is sometimes the case, our neutral position on the bill is a pragmatic gesture, not an assessment of its merits.
For questions about employment and labor bills, contact Paloma Sparks.
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Retail
HB 4034 (Support): Passed. This is the omnibus health-care bill and includes notable provisions related to pseudoephedrine sales. It will allow pharmacy technicians and interns to perform tasks related to sale of the drug just as they may now perform tasks related to other drugs they are allowed to handle. It also allows employees conducting pseudoephedrine sales to collect required information by swiping customers’ driver licenses.
SB 1565 (Oppose): Passed. This bill requires most businesses to accept cash. This mandate ignores changing technology and attitudes toward cashless businesses. It disregards the aversion of many employees to handling cash and the desire of employers not to make them do it. It also creates barriers for entrepreneurs. It contains exemptions for certain businesses, such as those with unattended fuel pumps and those that require memberships.
HB 4020 (Oppose): Did not pass. This bill would have prohibited certain contractors from requiring payment in advance for large residential repair projects. And in doing so, it would have “solved” a non-problem while creating real problems for consumers. Typically, such legislation is intended to guard consumers from small, unlicensed contractors who require payment up front, complete a small portion of the work, then disappear. HB 4020 would have exempted them. Instead, it would have applied only to “major residential contractors,” which are publicly traded companies. Such companies managed tens of thousands of projects in Oregon in 2021 with only two complaints. It effectively would have ended the practice of providing interest-free loans to conduct kitchen remodels and other services provided by large home-improvement stores.
HB 4158 (Oppose) Did not pass. This bill was introduced late in session and was aimed at the electronics recycling program run by DEQ. From what we have been able to gather, DEQ underestimated the volume of items that would be recycled in the last two years, which resulted in some facilities being underfunded. As a result, several facilities have decided to close rather than to continue operating in high-volume areas. This bill would have allowed a mid-year change and given DEQ broad authority to impose costs on manufacturers despite the fact that this problem was caused by DEQ’s error. We convinced legislators to use state funds to restore the facilities that closed and allow more work to happen in the interim rather than adopting a hastily written bill. The manufacturer-run program will pick up some of the smaller facilities that closed, and DEQ will use $200,000 in existing funds to reopen one of the larger facilities. We expect to have to revisit problems with the electronic recycling program in the coming months.
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Campaign Finance
SB 1526 and SB 1561 (Watch): Did not pass. These campaign-finance bills would have limited contributions for candidates and political committees but were far too complex to take up responsibly during a short legislative session.
For questions about campaign finance bills, contact Paloma Sparks.
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Environment, Energy and Natural Resources
HB 4077 (Watch): Passed. This bill changes the name of the Environmental Justice Task Force to the Environmental Justice Council and provides recommendations to the Department of Environmental Quality, Oregon Health Authority and multiple other agencies. The bill requires the development of a mapping tool to identify environmental justice communities and authorizes state agencies to consider the mapping tool results in policymaking. OBI remains concerned that the bill could affect state permitting decisions for facilities, and we will watch carefully as the bill is implemented.
SB 1518 (Oppose): Passed. As introduced, this bill would have allowed local jurisdictions to adopt the state’s “Reach” code, an optional energy construction standard designed to reduce greenhouse gas emissions. By allowing municipalities to mandate a currently optional standard, the bill would have created a patchwork of codes across the state. However, after encountering opposition from a number of groups, including OBI, it was amended and now establishes a task force that will identify and evaluate building code policies for decarbonizing new and existing buildings, then make policy recommendations.
SB 1567 (Watch): Passed. This bill will require bulk fuel terminals to conduct seismic vulnerability assessments from which the Department of Environmental Quality (DEQ) will develop risk reduction plans and mitigation requirements. It is not necessary, as fuel suppliers already implement state and federal standards to reduce risk from major earthquakes. Its requirements will add cost and complexity. Fortunately, amendments provide a reasonableness provision for mitigation measures required by DEQ.
For questions about environment, energy and natural resources bills, contact Sharla Moffett.
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Transportation
HB 4090 (Oppose): Did not pass. This bill would have required state agencies procuring diesel vehicles to obtain certifications from manufacturers and dealers that their trucks could operate with a 20%-biofuel mix. Warrantying specific fuel types would add cost and complexity to an already challenging regulatory environment. We would not be surprised to see this concept again in 2023.
HB 4139 (Watch): Passed. For Oregon Department of Transportation projects, this bill establishes an environmental product declaration (EPD) program to reduce the carbon intensity of construction materials. Bidders are required to submit evaluations that assess greenhouse gas emissions associated with materials, consider life cycle assessments of materials, the quality of material and emissions associated with the manufacture and transport of materials. The bill creates a technical advisory committee to evaluate EPDs and a grant program to provide money to bidders for carrying out the EPD requirements. The bill also establishes the Medium and Heavy-Duty Charging and Electrification Fund to support charging infrastructure for medium and heavy-duty electric vehicles.
HB 4141 (Oppose): Did not pass. This bill would have banned petroleum diesel and mandated renewable diesel statewide by 2029. Renewable diesel is an important tool for lowering greenhouse gas emissions and achieving Oregon’s climate goals. However, a mandatory transition to renewable diesel of limited supply almost certainly would lead to market volatility, uncertainty and fuel shortages. Current regulatory programs and those in progress will drive market demand for renewable diesel without the arbitrary targets contemplated in the bill. Although this bill did not pass, a generic budget note was added to HB 5202, a budget-rebalance bill, directing the Department of Environmental Quality and the Department of Transportation to provide recommendations on the expansion or creation of incentives to support businesses making the transition to zero-emissions trucks and evaluate other fuels. Similar legislation may appear on 2023.
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Tax and Fiscal Policies
HB 4092 (Support): Passed. This bill modernizes the Oregon Broadband Advisory Council, which will soon help direct the use of more than $100 million in federal funds for broadband.
HB 4015 (Support): Passed. This bill expands eligibility for state entrepreneurial loans and raises the per-loan limit from $500,000 to $1 million.
HB 4079 (Oppose): Did not pass. This bill would have created a 3% sales tax on a range of consumer goods, including clothing, electronics, automobiles and recreational equipment. The revenue would have funded a monthly stipend for low-income people even as employers were trying to bring more people into the workforce. A similar measure has been proposed for the November 2022 ballot and is undergoing the signature-gathering/validation process. OBI opposes this effort.
SB 1524 (Support): Passed. This bill is an omnibus technical tax modification measure that contains several elements OBI supports. These include a modest extension of the gain share program and a fix to the pass-through entity state and local tax (SALT) deduction workaround that was passed in SB 727 last year. The one-year gain-share extension is far shorter than the six-year extension OBI supported, but it is better than no extension at all. We also worked to create a draft amendment to this bill that would align state and local income tax definitions, sourcing and withholding rules in order to ease taxpayer compliance burdens. This amendment will serve as a guidepost toward stand-alone legislation in the 2023 session.
SB 1525 (Support): Passed. This bill reconnects Oregon’s tax code to the federal tax code, which is essential for reducing compliance costs and complexity for Oregon taxpayers.
SB 5702 (Watch): Passed. This is the annual capital construction budget bill. It added $382 million to the previously approved 2021-2023 capital construction budget, bringing the total to $1.89 billion. Bigger components of the increase include $243 million for state Capitol upgrades, $30 million for public universities, and $83 million for the Oregon Liquor and Cannabis Commission’s new warehouse/distribution facility.
HB 5202 (Watch): Passed. This is the 2022 session’s omnibus budget reconciliation bill, otherwise known as the “Christmas tree" bill. This massive bill, which has nearly 500 separate spending components, added another $1.4 billion of general fund spending, $82 million of lottery spending, $2.0 billion of “other funds” spending and $2.2 billion in federal funds spending for the 2021-23 biennium. Larger spending items include approximately $400 million for housing and homeless services; $200 million for the governor’s Future Ready Oregon workforce program; $100 million for rural economic development projects; $121 million to remove linkage between the Elliott State Forest and state Common School Fund; $120 million to move the Harriet Tubman Middle School in Portland; $100 million-plus in fire prevention/management services; $250 million for developmental disability services; $110 million for behavioral health housing and services; and $115 million for nursing home care and providers.
For questions about tax and fiscal policy bills, contact Scott Bruun.
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If you’d like to examine the legislative histories of these bills, including amendments and submitted testimony, you can do so using the Oregon Legislature’s OLIS site.
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How Businesses Can Respond to the Crisis in Ukraine |
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OBI is deeply concerned about the Russian invasion of Ukraine and its horrific humanitarian costs. Many of our member companies have taken swift and significant action regarding operations in Russia and support for the people of Ukraine. Others maybe be looking for ways to help. Toward that end, we participated in a webinar last week with our partners at the U.S. Chamber of Commerce Foundation, where opportunities for businesses to help were discussed at length.
In the short term, the need for cash (versus in-kind) contributions was advocated. OBI recommends looking at the U.S. Chamber's Ukraine Humanitarian Crisis page, which provides links and information for several vetted organizations that provide direct assistance for the Ukraine crisis.
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Register for OBI's CompSAFE Driving Safety Webinar |
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Through our CompSAFE program, OBI will present a driving-safety webinar on Tuesday, March 15 from 2-2:30 p.m. Garrett Hanna, vice president of strategy and procurement at Timber Country Coca-Cola Beverages, will share best practices and expert advice. Before assuming his current role, Hanna served for years as safety manager and fleet manager with Coca Cola Roseburg.
The CompSAFE program allows OBI members to save money on workers’ compensation coverage. The program is a partnership with SAIF, Oregon’s not-for-profit, state-chartered workers’ compensation insurance company. Learn more about CompSAFE here.
You do not need to be a CompSAFE member to participate.
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Share Your Views with Oregon Education, Workforce Officials |
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The Oregon Workforce and Talent Development Board and Higher Education Coordinating Commission would like employers to provide input on key workforce development issues. If you are interested in sharing your views, please take the online Talent Assessment Survey here. The anonymous survey takes about 10 minutes and involves questions tailored to your company.
Your responses will help provide an employer perspective on the workforce landscape and opportunities for improvement. They are particularly important given that the Workforce Investment Board will soon begin to chart how it will invest the $95 million received through the governor’s Future Ready Oregon proposal.
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Take Advantage of Your OBI Fuel Benefit |
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Even without the additional tax contemplated briefly by Washington legislators, fuel prices in Oregon are very high. Fortunately, OBI members can cut fuel costs through OBI's member benefit fuel program.
The program, a partnership with MCP Petroleum, is available to members who use at least 900 gallons of fuel annually through their companies. In addition to cost savings, the program offers high-speed fueling sites, 24-7 accessibility, necessary product controls, management reporting, web access and suspect usage alerts.
If you have questions about the program, please contact Nancy Marquay.
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Oregon Business & Industry
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Salem, OR 97301
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