We believe the Senate Republican “walkout” will commence this week as the Ways & Means Committee will approve SB 1530
– Cap and Trade – on Monday morning and send it to the Senate floor. Senator Betsy Johnson (D-Scappoose) will need to be temporarily replaced in order to facilitate this, as she remains a strong opponent of Cap and Trade, and her vote would kill the bill in committee.
The question at this point is whether House Republicans may follow suit.
The effect of the walkout is that the Senate cannot conduct business with fewer than 20 members. By boycotting the session, Republicans will leave the Senate with only 19 senators (we expect Senator Tim Knopp (R-Bend) to stay in Salem). All committees will continue to pass bills, but the full Senate would not be able to pass them. Because the session is constitutionally mandated to end at 12 AM, Sunday, March 8th, all bills not passed by the Senate would be dead at that time.
It remains to be seen how the Governor and Democrat leadership will deal with the walkout, but it will likely get intense over the next two weeks in terms of the messaging, the threats, and the looming possibility that there may be some executive action to call special sessions or invoke “emergency powers” to conduct votes with less than a constitutional quorum.
Other than SB 1530
, we continue to believe our biggest threat is House Bill 4010
, which would effectively eliminate 50% of the state tax incentives for Opportunity Zones. The House Revenue Committee passed a version of HB 4010 on Thursday night which disconnects from the federal capital gains tax incentives to invest in OZ’s and effectively levies a 4.95% state tax on any investment gains made in an OZ. You can view the one-pager here.
Here’s a rundown of key OSCC Issues:
- Cap-and-Trade (SB 1530). Although the bill was delayed last week, we expect the full Ways & Means Committee to approve the bill on Monday morning. This will likely trigger a Senate Republican ‘walkout’ to deny a quorum in the Senate to prevent passage of the bill.
- CAT Tax “Technical” Fixes (HB 4009). This bill is supported by OSCC as it will lower penalties on underpayment of taxes, particularly in the first year, as businesses grapple with this new gross receipts tax. This bill was not an attempt to re-visit the policy, and OSCC cautioned members not to expect too much with this bill. OSCC’s objectives here were to lower penalty provisions, which the bill does. This bill will likely be impacted by the Senate Republican walkout.
- Statewide Lodging Tax legislation (HB 4047) will make permanent the 1.8% statewide lodging tax rate that was passed in 2016. OSCC assisted ORLA in passing this bill through a tough House vote, 37-18. You can see the joint ORLA/OSCC floor letter in support of the bill. This bill will likely be impacted by the Senate Republican walkout.
- Interfering with Non-Competes (SB 1527). This issue was negotiated as both business and labor landed on a 12-month enforceability for non-compete agreements. Under the new law, non-competes can now only apply to employees making more than $97,300 per year and are only effective for 12 months. OSCC considers this issue settled. We expect the bill to pass the House Committee this week and ultimately pass. This will not be impacted by the Senate walkout.
- New Requirements for projects in Economic Development Zones (SB 1525). Last week, we reported that this bill may have been a vehicle for mischief – to amend HB 4045 into it. OSCC opposed HB 4045, which imposed prevailing wage requirements on projects within enterprise zones, strategic investment zones, and renewable energy investment zones; specifically, the requirement to pay prevailing wages.
- We are pleased to report there was no mischief in the passage of SB 1525, which was a very minor consensus bill dealing with new reporting requirements for enterprise zone projects. One more small victory.
- Aviation fuel taxes / Public Airport Investments (HB 4036). We believe the Joint Transportation Committee will likely pass HB 4036 on Tuesday night. The bill would increase the aviation fuel tax by 2 cent-per-gallon to increase funding for public airports by $4 million per year. The tax increase will be a point of contention. Many Republicans, and some Democrats, prefer a scaled down version that would continue the current 2-cent tax but not increase taxes. Others support the additional 2-cent tax. We believe the House has the votes to pass this bill, but its future is in doubt in the Senate.