Chess Game of Unexcused Absences Being Played in State Senate

With a June 25 adjournment deadline approaching, will a special session be needed?

May 19 was Day 123 of the 160-day 2023 Oregon Legislative Session, which means there are just five weeks left until the Legislature must adjourn sine die – no later than Sunday, June 25.

And if Republican and Independent senators continue to boycott floor sessions, adjournment won’t occur before June 25 either because it takes a quorum of 20 senators to bring the sine die resolution to the floor for a vote to end the session early!

Tomorrow, NFIB celebrates its 80th Anniversary! Check out this video from NFIB President Brad Close – and thank you for being actively engaged with NFIB! We wouldn’t have an 80-year history of small business advocacy without dedicated members like you!

Impasse Remains in Oregon Senate

As of today, 10 Oregon senators (9 Republicans and 1 Independent) have reached the limit of unexcused absences allowed under the constitutional changes approved by Oregon voters last year. Ballot Measure 113 prevents state legislators with 10 or more unexcused absences from holding office as a state senator or representative in the term immediately following the one in which the absences occurred.

The ballot measure passed with 68% support from voters – a notable win for proponents of the measure who were hopeful that its passage would effectively end the practice of walkouts. Obviously, that hasn’t happened. Since May 3, no more than 18 senators have ever been present on the senate floor, although many of the absent senators have still been participating in committee hearings in the Capitol.

Democrats currently hold 17 seats in the senate. The chamber needs 20 senators present to conduct its business. Sen. Chris Gorsek (D-Gresham) and Sen. Fred Girod (R-Stayton) have been marked “excused” each day for medical reasons. A rotation of two Republican senators have been attending daily floor sessions, but for the foreseeable future, it appears as though Sen. Dick Anderson (R-Lincoln City) and Sen. David Brock Smith (R-Port Orford) will continue to attend. Both of them (and Sen. Girod) are up for reelection in November 2024, so at least for now, these three Republicans would not be barred from serving another term. It’s unclear at this point how long Senate President Rob Wagner (D-Lake Oswego) will continue to allow Sen. Girod and Sen. Gorsek to miss floor sessions for medical reasons, so it’s possible that Sen. Gorsek, who is also up for reelection in 2024, could be subject to the consequences of the ballot measure.

Sen. Bill Hansell (R-Athena) is the only senator thus far who has formally announced his retirement plans, which means Sen. Art Robinson (R-Cave Junction), Sen. Brian Boquist (I-Dallas), Sen. Tim Knopp (R-Bend), Sen Dennis Linthicum (R-Klamath Falls), and Sen. Lynn Findley (R-Vale) will all be putting their political futures in the hands of the courts between now and 2024, as it’s widely expected that the Republicans will challenge the legality of Ballot Measure 113.

Please note that Sen. Cedric Hayden (R-Fall Creek), Sen. Kim Thatcher (R-Keizer), Sen. Suzanne Weber (R-Tillamook), and Sen. Daniel Bonham (R-The Dalles) have all received at least 10 unexcused absences as well, but are not up for reelection until 2026.

For more information, check out these articles from Oregon Capital Chronicle and Oregon Public Broadcasting.

If the Senate is unable to act on legislation for the remainder of the 2023 regular session, small businesses in Oregon will have far fewer anti-business bills to deal with than in a typical long session, but at the same time, our tax reform priorities will have stalled out. A special session sometime before the end of September would likely occur to pass budget bills, but it’s unclear whether policy bills would be considered at that time.

OSHA Penalty Bill to Become Law

On Monday, May 15, the Oregon House of Representatives passed SB 592 A, the OSHA penalty bill that NFIB has opposed since it was first introduced back in January. The bill now makes its way to the desk of Gov. Tina Kotek, where there is little doubt she will sign it into law, as it is one of the only anti-small-business bills likely to make it to the finish line this year due to the walkout.

Here’s the news coverage from The Oregonian/OregonLive.

NFIB would like to thank our members who took action by writing to their legislators to explain our opposition to SB 592 A, which we outlined in a “Key Vote” letter to lawmakers on May 11, 2023:

Dear Representative:

On behalf of the thousands of Oregon small business members of the National Federation of Independent Business, many being the smallest of small businesses, I would like to share NFIB’s concerns with SB 592 A, a measure that makes significant changes to how the Oregon Occupational Safety and Health Division (Oregon OSHA, housed within DCBS) enforces the state’s occupational health and safety laws.

While NFIB appreciates the good intentions of the bill to elevate safety in the workplace, NFIB opposes SB 592 A primarily because bill focuses on monetary punishment and ramped up inspections but does little else to enhance current health and safety best practices.

To be clear, NFIB members take safety seriously – and not simply to avoid paying civil penalties, but because they often work side-by-side with their employees to get the job done each day. Increasing civil penalties will not change this motivating factor, but it will certainly cause fear and anxiety within the small business community.

The penalty increases proposed by SB 592 A are staggeringly high. Under current law, the minimum penalty that may be imposed upon a business for a serious violation is $50 – and as we learned during the public hearings on the bill, Oregon OSHA’s administrative rules set a minimum of $100 per serious violation.

SB 592 A would increase the minimum to $1,116 – more than $1,000 more than the current minimum. It’s important to note how current statute describes a “serious violation.” ORS 654.086 states: “a serious violation exists in a place of employment if there is a substantial probability that death or serious physical harm could result from a condition which exists, or from one or more practices, means, methods, operations or processes which have been adopted or are in use, in such place of employment unless the employer did not, and could not with the exercise of reasonable diligence, know of the presence of the violation.”

This means that a serious violation may occur, and thus a civil penalty may be imposed against the business, even if an accident has not happened, and when no one working at the business has been injured, because a violation exists solely on a “substantial probability that death or serious physical harm could result” from the violation.

Currently, Oregon OSHA can take these circumstances into account and work with the business on improving health and safety measures in the workplace – and when appropriate, impose a $100 minimum penalty. However, the new minimum of $1,116 is substantial and punitive.

Furthermore, section 2 of the bill also creates very large penalty minimums of $20,000 (for a serious violation that causes or contributes to the death of an employee) and $50,000 (for willful or repeated violations that cause or contribute to the death of an employee). A $20,000 penalty may be considered a deterrent for a large corporation, but it could very well mean the end of a small business, which is an extremely unequitable outcome for the same violation.

Again, our members take safety very seriously – and to be sure, none of them want to pay a large OSHA penalty, but that’s not the main reason why the vast majority of businesses maintain a safe workplace. In a small business, everyone depends on each other to be on the same page when it comes to safety, so that everyone can go home to their families at the end of each day. The increased penalty minimums in SB 592 A will not change this, but they will certainly change the way small businesses interact with Oregon OSHA moving forward.

NFIB respectfully asks you to vote NO on SB 592 A.

Massive Increase in Anticipated State Tax Collections

Every three months, Oregon’s Office of Economic Analysis provides the State Legislature with an update on projected tax revenues. The numbers provided by state economists came with a story that is all too familiar for NFIB members is Oregon – and across the country according to NFIB most-recent Small Business Economic Trends report, which cited labor quality and inflation as the top-two problems for small business owners right now.

As noted in the state economists’ full report, “One major factor has been the current inflationary environment. The vast majority of Oregon’s taxes are not adjusted to inflation and rise along with prices. With demand outstripping supply, businesses and consumers are paying premiums for their needs. This has translated into a wide range of taxable business and labor income, which has moved many filers into higher tax brackets.”

When state revenues were up nearly $700 million back in February, NFIB urged the Legislature to take action on opportunities to provide tax relief to small businesses. Now, state economists have modified their forecast methodology to account for inflationary impacts, resulting in more than $1.8 billion in combined net resources – that’s $2.5 billion in new money that wasn’t available to lawmakers just six months ago.

Our response to the news:

“Now is the time act on estate tax and CAT relief – and the conversation shouldn’t be ‘if’ we help our small businesses retain and reinvest more of the money they earn, but ‘how much.’”

Here’s some news coverage from Oregon Capital Insider and The Center Square, which published our public statement.

NFIB supports raising the Corporate Activity Tax (CAT) filing and exemption threshold to reduce the economic impacts of the state’s gross receipts tax, which businesses with sales in Oregon of $1 million or more are required to pay whether they make a profit or not. Public hearings have already been held on HB 2433 and SB 127.

NFIB also supports reforming Oregon’s estate tax by increasing its lowest-in-the-nation exemption threshold of $1 million. As a comparison, the federal estate tax exemption threshold is $12.92 million for 2023. Public hearings have already been held on SB 68, SB 456, SB 498, SB 939, and HB 2624.

The futures of these bills hang in the balance along with every other policy bill that hasn’t made it through the Senate yet. But if there’s a deal to be made, these tax relief proposals will certainly need to be a major part of the conversation.