The Oregon Legislature officially convenes Monday, Feb. 3^rd for a 35-day Session. This past week has been a whirlwind of final fundraisers (all fundraising shuts down for Session) and bill review of the 256 bills pre-session filed. Committees will begin meeting Monday afternoon and evening after ceremonial activities. As a reminder, the Oregon deadlines are fast and hard and will require Policy Chairs to post Work Sessions Friday, Feb. 7^th.

Our team will provide weekly updates and bill trackers. Don’t hesitate to reach out during the week but please know that our days will be running from 7AM – 8PM (evening Committees Tuesday and Thursdays) so our email response time will be delayed.

Bill Deadlines:

*As a reminder, the above deadlines do not apply to Rules, Revenue or Ways & Means Committees.

This week the Legislature convened for their final batch of Interim Committee Days before the 2020 Session. These days provided the final opportunity to hold informational hearings and presentations on Committee bills in advance of the 2020 Session which begins officially February 3^rd. Below are brief highlights from the hearings this week along with links to bill drafts released early. All bills are required to be filed by January 17, 2020 and expected to be released publicly the week of January 27^th. We will share your initial bill tracker as soon as those bills load so you can review and priorities accordingly!

Dates of Interest

Feb. 3^rd – Mar. 8^th – 2020 Legislative Session

2020 Session Deadlines*:

*As a reminder, the above deadlines do not apply to Rules, Revenue or Ways & Means Committees.

House & Senate Business Committees – Labor Bills

Cash Free Bill - The House Committee on Business and Labor heard from Rep. Bynum-D and UFCW on LC 175, drafted as a public accommodation bill, which prohibits discrimination based on natural hair or hairstyles and discrimination based on cash payment. Among other items, the bill would prohibit a place open to the public from refusing to accept cash, from making a restriction or discrimination (think incentive) for someone using cash. The bill exempts farmers markets and roadside stands, mobile food and beverage units, certain airport businesses, certain lodging and rental agreements (housing and car), gas stations and all retail transactions that occur entirely over the phone, mail or online. The bill provides a BOLI complaint and private right of action. The Committee also heard from AFL-CIO on LC 180 which revises current law and eligibility of unemployment benefits for workers in a labor dispute making workers eligible for benefits when striking. BOLI Commissioner Val Hoyle-D joined the Committee with Rep. Julie Fahey-D to present on LC 81, which shifts current fee funds from wage and hour violations in the Wage Security Fund to claimants of earned but unpaid wages and BOLI technical assistance.

The Senate Labor & Business Committee heard invited testimony on the 3 committee bills which include the work group product charged with reviewing and possibly applying a prevailing wage mandate to private projects in certain enterprise zones. The proposed bill does not include a prevailing wage mandate and rather focuses on data collection, notice and outreach efforts. View LC 73 here. The Committee also heard from AFL-CIO on LC 75 which proposes changes to Oregon’s non-compete law. Specifically, LC 75: (1) shifts the burden for non-compliance/enforcement to employer (agreement becomes void not voidable); (2) replaces current salary threshold (currently tied to the median family income for a family of four per the US Census Bureau = approximately $90,748) to $97,311 adjusted annually for inflation and (3) reduces the term of a valid agreement from 18-months to 6-months.

Senate Environment Committee – Cap & Trade

The Senate Environment Committee received the long-awaited public unveiling of the 2020 Cap and Trade proposal. The revised concept is a product of interim negotiations and discussions with stakeholders but has yet to win any support from Republicans. However, the revised bill appears to have garnered the likely support of a key Democrat, Sen. Arnie Roblan-D from Coos Bay. Roblan was one of the two potential “16^th” vote needed to pass the proposal off the Senate Floor. His support could clear the way for passage if the bill reaches the Senate Floor. Sen. Dembrow, Chair of the Committee and an author of the bill, said “The goal was to get a bill that can pass this session.” Proponents are not thrilled with the modifications, causing Climate Solutions to say the new proposal is “a major over correction to accommodate industry push back” going as far as to say they let industry “off the hook.”

The Committee heard a brief overview of the new 156-page LC 19. View a summary of the new proposal here. The Committee heard invited testimony from the transportation, trade and natural gas sector along with environmental advocates and labor proponents. NW Natural testified in support of the new bill. Timber Unity immediately took to social media saying “If this new proposal becomes law, Oregonians will see higher gas prices, higher utility bills and fewer jobs in key industries. It's a bad deal for working families in our state”.

Key modifications to the new proposal:

• Regional phase in for fuel providers:
  • 2022 – Portland Metro area (approx. 21% of diesel and 38% of gasoline)
  • 2025 – Cities with vehicle-fuel deliveries of 10 million or more gallons (approx. 84% of diesel and 87% of gasoline)
  • Remaining cities not regulated until at least 19 counties decide to voluntarily participate in the program*
    • *Moneys collected would flow to counties regulated. 20% of the funds would be eligible for transportation projects statewide.
• Exempts a manufacturers natural gas emissions – essentially credits for those emissions free of cost to supplier (this reduces the number of manufacturing facilities regulated under the new law from approximately 30 to 11)
• Other partial exemptions for food processing and pulp & paper manufacturers

• Dedicates portion of money from sales of emissions credits to wildfire prevention and suppression
• No longer creates new state agency – now managed under DEQ in new Office of Greenhouse Gas Regulation

In the news:

Oregon Democrats publicly unveil new climate change legislation; still face significant opposition
Revamped cap and trade wins support of key Oregon Democrat
Revised Climate Change Bill Creates New Battle Lines For 2020 Session
Oregon Senate Republican Leader: 'Nothing Is Off The Table' In Climate Fight
Oregon Senate Republican leader still opposes revamped climate policy; looking for a referral to voters

House & Senate Revenue Committee – “CAT Fix”

The Corporate Activity Fix bill was introduced in the House Revenue Committee as LC 249. Staff noted this is the “technical fix” bill for the corporate activity passed in 2019. The current draft only contains 5 provisions: (1) clarification around one-time registration for registrants (not annually); (2) assigning returns and allowances to specific tax year; (3) fix for how to apportion the 35% allowed subtraction; (4) addressing penalties for quarterly filings and (5) addressing small vehicle dealers outside the State and subject to use tax. Chair Nathanson commented that the Committee may expect “another technical fix or two.” Senate Chair Mark Hass reiterated the desire for this bill to contain technical fixes only and that the bill will contain fixes that are revenue neutral and non-controversial.

The Revenue Committee also heard LC 250 which disconnects Oregon from the Tax Cut and Jobs Act of 2017 effective Jan 1, 2020 and requires LRO to put together a study and consult with stakeholder groups about a potential partial reconnection in the future.

House Agriculture and Land Use

The House Agriculture and Land Use committee held an informational hearing on the Eastern Oregon Economic Opportunities Analysis (EOA) completed by Department of Land Conservation and Development. Findings from the 27 completed EOAs showed an increase of 3,755 jobs across all industries in the next 20 years. DLCDs next step is to begin targeted work to implement strategies with other agencies and local partners and pursue additional infrastructure and modernization projects.

House Water Committee

The House Committee on Water invited the Oregon Watershed Enhancement Board, ODFW, DEQ and Oregon Water Resources to present an overview on water data. Following the overview, the National Policy Consensus Center, Ford Family Foundation, Central Oregon Intergovernmental Council and the High Desert Partnership discussed their experiences in place-based water planning and processes for engaging reluctant stakeholders. To conclude the meeting, ODA presented an overview on Oregon’s unique agricultural water quality program with a focus on ODA’s on the ground compliance work with Oregon’s agriculture community. To end the committee, Chair Helm introduced three committee bills: On-site Septic System Financing (LC 34) – provides funding to DEQ to provide grants for developing and administering low-interest loans for the repair, replacement, upgrade or evaluation of on-site systems; Harmful Algal Blooms (LC 178) – Directs DEQ to collect water samples and analyze them for cyanotoxins; and Measurement and Reporting of Water Use (LC 205) – declares water use data fundamental to water management, distribution, and planning for future water needs.

Senate Wildfire Prevention and Recovery

Four committee bills were introduced in the Senate Wildfire Prevention and Recovery Committee this week. LC 266 – The Wildfire Workforce Foundation bill requires the Office of the State Treasurer to research the creation of the Wildfire Workforce Foundation and report back to the legislature in September 2020. Oregon’s Higher Education Coordinating Commission was invited to present at the public hearing to discuss existing workforce programs that assist with forest health and fire mitigation such as the AmeriCorps and Oregon Youth Core. NW Youth Corps also presented on their wildfire mitigation and forest lands work. The theme of public and private partnerships was consistent throughout both testimonies. Following the informational hearing, Senator Baertschiger introduced the Oregon Department of Forestry Modernization concept (LC 267). The concept creates a program for periodic review and modernization of the state forest department. It also contains an appropriation for additional FTEs, technology and equipment. Sen. Baertschiger noted that the current draft needs additional work. LC 225 – Integrated Demonstration Projects was the third committee bill introduced. The concept requires the use of science-based wildfire risk reduction on forests and rangelands. Risk reduction activities Include thinning, prescribed fire and creating larger defensible space. Chair Golden noted that this is the first step to the Governor’s much larger omnibus wildfire response proposal. Proposed amendments to the current draft are available here. The committee also discussed (LC 83) a broad omnibus wildfire response concept to be introduced by the Governor. The concept as drafted lays out series of state investments in wildfire mitigation, suppression and adaptation that were recommended by the wildfire council. View the presentation on the concept from the Governor’s office here.

House Natural Resources – Dam Safety Update and Natural Resource Bills

Oregon Water Resources Department (OWRD) presented a Dam Safety Update to the House Natural Resources Committee. According to the report, Oregon currently has 75 high hazard dams, 151 significant hazard dams and 728 low hazard dams. OWRD expressed the need for additional investments from the legislature and noted LC 96, Governor Brown’s resiliency bill, which as drafted includes $2 million in dam safety funding and creates a Dam Safety Task Force. The committee also introduced three committee bills: Residency requirements for wildlife licenses, tags & permits (LC 129) which defining “residency” as someone who has resided in Oregon for a minimum of six months; Dog licensure and rabies vaccination (LC 139); and LC 169 a placeholder bill intended to be used for wildfire legislation.

House Agriculture and Land Use

The House Agriculture Committee introduced three legislative concepts this week. LC 158 establishes the Oregon Hemp Commission; LC 72 is being reintroduced this session at the request of Marion County, the concept Establishes eligibility for renewable energy certificates for facilities that generate electricity from direct combustion of municipal solid waste; and LC 101 a placeholder bill “relating to the use of land”. The committee also held an informational hearing on the Eastern Oregon Economic Opportunities Analysis (EOEOA) completed by Department of Land Conservation and Development (DLCD) as a part of HB 5201 from 2018. Findings from the 27 completed EOAs showed an increase of 3,755 jobs across all industries in the next 20 years. DLCDs will now begin targeted work to implement strategies with other agencies and local partners and pursue additional infrastructure and modernization projects.

POLITICS

New Representative for House District 36 Appointment

Multnomah County Commissioners unanimously appointed Akasha Lawrence-Spence to serve the remainder of former Rep. Jennifer Williamson’s term in the House of Representatives. Akasha is the founder and principal designer of Fifth Element, a conscientious real estate development firm fortifying small businesses through commercial property ownership. The Commission agreed to select an individual who would not pursue the seat in the May 2020 Primary meaning Akasha will not run as an incumbent, leaving the seat “open”. Read more here.

Additional Retirements in the House

Yesterday, Representative Alissa Keny-Guyer (D-Portland) announced that she will not run for election in 2020. Since first elected in 2001, Rep. Keny-Guyer has been a long-time champion for affordable housing, supporting children and vulnerable populations. Read more here. Representative Margaret Doherty (D- Tigard) announced her retirement from the legislature earlier this month. As longtime Chair of the House Education Committee, Rep. Doherty has been a fierce leader in public education reform. So far, two candidates have filed to run for the seat in 2020. Read more here.

SOS rejects two proposed environmental ballot measures

Secretary of State Bev Clarno rejected two proposed ballot measures that would have forced Oregon to transition to carbon-free sources of electricity in the next 25 years. Her rejection of the proposals creates a second conflict with environmental groups. In the news.

As your final client report of the 2019 year, we have included updates from the November interim committee days, policy issue updates of interest and a brief summary of all the political news of note! Thank you for another great year and our team looks forward to working with you in new year! Please note our office will be closed 12/23 – 1/5 with staff periodically checking email in the coming week. We hope you and your families have a wonderful holiday season!

Amanda, Sabrina, Nicole & Shelley

ISSUE UPDATE

Corporate Activity Tax Rulemaking

The Oregon Department of Revenue has released draft rules implementing the Corporate Activity Tax. These rules are meant to be temporary in nature and will be replaced by permanent rules to be more fully discussed and debated over a 3-month period from January to March 2020. The permanent rules must be adopted by June 2020. The eight drafts posted on the agency’s website this week address:

• Estimated payments
• Estimated payments for unitary groups
• Underpayment of or delinquent estimated payments
• What establishes nexus between a business and Oregon
• What constitutes a unitary group for the CAT
• Property brought into Oregon
• The definition of agent
• Filing extensions

Please share any comments or concerns on the draft rules. As a reminder, the new tax is on businesses with taxable commercial activity in excess of $1 million in Oregon receipts. The tax is $250 plus 0.57% of gross receipts greater than $1 million after subtractions. FAQ document here.

ODA Chlorpyrifos Advisory Committee

The OR Dept. of Ag. has convened a stakeholder group to review and make recommendations on the future use of Chlorpyrifos. The first meeting is December 17^th. This process is expected to delay or pause legislative efforts to ban the process as the Department conducts their own product review. View agenda and draft workplan. View ODA Press Statement announcing advisory committee here.

Pesticide Stewardship Partnership Advisory Committee (PSP)

The Dept. of Ag’s PSP continues to meet with an updated charge of revising their strategic plan. Committee members include OFS, Farm Bureau, OFIC and Beyond Toxics, OR Enviornmental and Council. The next meeting is January 16^th.

Prevailing Wage Workgroup

Sen. Kathleen Taylor, Chair of the Senate Workforce Committee has convened an interim workgroup to discuss prevailing wage for private projects in enterprise zones. Workgroup participants include Sen. Bill Hansell-R, Rep. Julie Fahey-D and Rep. Shelly Boshart-Davis-R along with representatives from labor, industry, county and city government. The group has been meeting weekly. Efforts to pass legislation which would have required prevailing wage on private projects over $20M were defeated in 2019 with HB 2408. Early proposals would have dramatically impacted renewable and data center projects across Oregon and would have required prevailing wage on certain private construction projects receiving tax abatements. The most recent discussions do not include a prevailing wage mandate (which has been tabled till 2021 after labor opposed an offer to allow prevailing wage as a local opt-in option for local governments) and instead is focusing on reporting and data requirements for property tax abatement applicants, state agencies, and local sponsors. View the most recent framework here.We expect edits to Sections 1-3 as a result of the final meeting – with the most substantial changes occurring in Section 3. A final framework will be available mid-December.

Paid Family & Medical Leave Advisory Committee

The OR Employment Department has appointed the Paid Family & Medical Leave Advisory Committee. We are excited to announce we will have a seat at that table, representing our employer clients over the next two years as the Advisory Committee addresses the implementation, rulemaking and administration of the new family and medical leave insurance program. The Advisory Committee is comprised of four members representing workers, four members representing employers, with at least one of those representing an employer with fewer than 25 employees and is chaired by the Employment Department. View press release here. The first meeting of the Advisory Group will be December 19^th.

Important dates to keep in mind:

Paid Family & Medical Leave – Implementation Dates

Rulemaking required prior to September 1, 2021

Employers begin collecting premiums January 1, 2022

Employees may access paid leave beginning January 1, 2023

Private Right of Action delayed until January 1, 2025

Interim Committee Days

The Legislature convened November 18^th – 20^th. Below are a few hearings of interest:

Adoption of the Adequacy of Public Education Funding Report

The Joint Committee on Public Education met briefly to review and adopt the state report on Adequacy of Public Education Funding. According to the report, the recent $2 billion investment from the Student Success Act will significantly narrow the funding gap, but Oregon will still have insufficient funds to meet the recommended funding level of the QEC. Notably, the majority of the new funding ($643 million) went to ODE’s K-12 Grant-in-Aid and Early Learning Grant-in-Aid budgets. View the full list of programs and grants funded by the Student Success Act here.

Recommendations from the Governor’s Council on Wildfire Response

The Senate Committee on Wildfire Prevention and Recovery received recommendations for action from the Governor’s Council on Wildfire Response. The Council brought forward 36 recommendations separated into four main goals:

• Create fire-adapted communities
• Restore and maintain resilient landscapes
• Respond safely and effectively to wildfire
• Cross-functional support system

The Council also recommended adding 100 staffing positions at various agencies and an initial $20 million investment in non-staffing related costs. View details of the recommendations here.

Proposed Changes to the Endangered Species Act

The House Committee on Natural Resources heard invited testimony from landowners, environmentalist, and agency representatives on the proposed regulatory changes to the endangered species act – specifically sections 4 and 7. Landowners were well represented by Oregonians for Food and Shelter, Oregon Cattlemen’s Association, and Freeborn Family Farms who unanimously supported the proposed changes. While environmentalist expressed concern that the proposals would significantly weaken the endangered species act.

Measure 49 Update

The Department of Land Conservation and Development updated the House Committee on Agriculture and Resources on Measure 49 claims. The majority of authorized new parcel claims are in the Metro and Willamette Valley – 62% are located on farm land and 16% on forest land. Committee members were concerned over the apparent lack of landowner interest in Measure 49, Chair Clem mention the need to revisit this conversation at a future date to discuss possible incentives.

Cap and Trade 2.0

Climate legislation continues to be at the forefront of Democrat leadership’s agenda for 2020. We anticipate several versions of the 2019 Cap and Trade bill (HB 2020) to be brought forward in 2020, including proposals from the House and Senate, as well as one from the Governor’s office. If the legislature fails to pass Cap and Trade in 2020, proponents have threatened more aggressive ballot measures on the 2020 November ballot. Three ballot initiatives were filed earlier this month and assigned the below draft titles from the Secretary of State:

• IP 48 – All retail electricity sales must come from renewable/ “carbon-free” (undefined) energy sources by 2045.
• IP 49 – Mandates renewable energy sources for all retail electricity by 2045, investments to reduce greenhouse gasses.
• IP 50 – Oregon greenhouse gas emissions must be eliminated by 2050; creates regulatory authority to ensure reductions.

Joint Taskforce on Supporting Businesses in Reducing Diesel Emissions

The Taskforce (TF) met this month to discuss different types of fuel and fueling technology currently available to reduce diesel emissions. TF members heard from four panels on options for reducing diesel emissions, retrofit technology, technology replacement options, and alternative fuels. Notably, each panelist mentioned the importance of financial incentives and the need for approaches to be flexible and adaptable. Representatives from Renewable Energy Group and NW Natural discussed the benefits and costs of alternative fuels. Electric vehicles were included on the agenda as a discussion topic, but no discussion occurred. The next TF meeting is scheduled for December 19^th.

View presentations from:

• DEQ – Options for Reducing Diesel Emissions
• MECA – Diesel Retrofit Experience for Heavy-Duty Diesel Vehicles
• Diesel Technology Forum – Replacement Options
• Renewable Energy Group & NW Natural – Alternative Fuels

POLITICS

Recall Effort Against Democrat Tiffany Mitchell Fails

Timber Unity, a grassroots organization, failed to collect the required 4,883 valid signatures to force a recall election against North Coast Democrat, Tiffany Mitchell. The recall effort came as a result of Rep. Mitchells support of Cap and Trade and the Corporate Activity Tax during the 2019 session. Members of Timber Unity say they will now shift their focus to recruiting candidates to run against Mitchell in the 2020 election. In the news.

Knute Buehler Announces Bid for 2^nd Congressional District

Knute Buehler has announced he will run for the 2^nd Congressional district currently held by Congressman Greg Walden-R. This sets up a hotly contested Republican primary race between Buehler, Sen. Cliff Bentz and former State Senator Jason Atkinson. Candidates have until March to file so additional contenders could still announce. A viable Democrat has not filed to-date. In the news here and here.

Ballot Measure to Reform Oregon’s Redistricting Process Filed

A newly formed coalition, People Not Politicians, filed three possible ballot measures to reform Oregon’s redistricting process. One measure would reform congressional redistricting, the second would reform state legislative redistricting, and the third combines both congressional and legislative proposals. As drafted, the measures would amend the constitution to change how district boundaries are drawn – taking the power away from current elected officials and putting it into the hands of a 12-person commission. The measure also requires the commission to use transparent and objective criteria to draw boundary lines. View the full text here.

Forestry and Environmental Ballot Measures

The timber industry has filed three “pro-forestry” pro-active ballot measures this month. The measures would require additional members to serve on the state Board of Forestry who have a background in forestry, amend the constitution to require the state to compensate land owners for any value taken from their land as a result of new laws/regulations, and would require the forestry board use non-biased and peer reviewed science to craft with consensus policies. View text of each ballot initiative below:

• IP 53 – Fair and Just Compensation Act
• IP 54 – Oregon Forest Science Standards Act
• IP 55 – Forestry Oversight Improvement Act

Oregon Democratic Primary will be closed

The Democratic Party of Oregon elected to keep their primaries “closed” in the upcoming election cycle, rejecting calls from some grassroots party leaders to allow non-affiliated voters to participate in the party’s nomination process. The Oregon Republican Party has also rejected similar efforts to “open” the party’s primaries in recent years. Despite the position held by Oregon’s two largest political parties, a significant majority of the rest of U.S. states have embraced open primaries in varying forms.

Legislature to See at Least 16 Open Seats in 2020

At least 16 of the 90 legislative seats have already seen retirement announcements leading up to the 2020 election. Read more about the other retirements here,and below:

Two legislators from Coos Bay will not seek reelection in 2020

Senator Arnie Roblan (D-Coos Bay) and Representative Cady McKeown (D-Coos Bay) announced that they will not seek reelection in 2020 within hours of each other this month. Both legislators are known for being moderate and have each served in their current position since 2012. These legislative districts will now be open races in the 2020 election and likely two of the most expensive.

Senator Cliff Bentz Announces Resignation

Senator Cliff Bentz (R-Ontario) announced he will resign his Senate seat effective January 1, 2020 prior to the 2020 Legislative Session. He will focus his time and energy on his campaign for Congress. His resignation leaves a huge hole for the Senate Republicans as Sen. Bentz has been their lead on Cap and Trade negotiations since its inception. Lynn Findley, the current Representative for HD 60, has announced his intent to run for the appointment to replace Sen. Bentz, creating musical chairs in the capitol. An appointment process is expected to kick off in early January with hopes the appointments can be complete prior to the start of the 2020 Session.

Representative Carla Piluso-D to Retire in 2020

Representative Carla Piluso (D-Gresham) surprised many when she announced that she will not seek reelection. Read more here. Rep. Piluso served three terms representing House District 50 and ran unopposed in the 2018 election. She was the Co-Chair of the Public Safety SubCommittee. No candidate announcements have been made.

City of Salem Sends Payroll Tax to Voters

Salem City Council voted to send a payroll tax to the May 2020 ballot. The payroll tax would be separated into three tax rates: Minimum wage workers will be taxed at 0%, those making between minimum wage and $15 an hour will be taxed at .266%, and those earning over $15 will be taxes at .39%. If the measure passes, the city plans to tax anyone who works within city limits, regardless whether they live in Salem. Click here to view the city’s payroll tax calculator. According to the City the tax will raise $9.1M a year and pay for public safety services. More here.