Small business finished incredibly strong with some big victories
NFIB Oregon State Director Anthony Smith follows up on a previous wrap-up story and post-session comment news release with the following more comprehensive report on the small-business agenda following the Legislature’s adjournment for the year.
The Oregon Legislative Assembly adjourned the 2023 legislative session on Day 160 as lawmakers finished their work Sunday, June 25, with just hours to spare. As required by the Oregon Constitution, legislative sessions in odd-numbered years may last no more than 160 days. Unless a special session is called for some unforeseen reason, the Legislature will not meet again until February 2024.
Small business finished the 2023 session incredibly strong. We passed two important tax bills – HB 2083, which extends Oregon’s state and local tax (SALT) cap workaround program, and SB 498, which creates a $15 million estate tax exemption for business owners engaged in farming, fishing, and forestry. The final days of the session also saw the demise of two harmful insurance bills (HB 3242, HB 3243), which would have both resulted in more lawsuits and higher insurance premiums for small-business owners.
A few bad-for-business bills made it across the finish line this year, and the Legislature could have done far more to help small business. At times, it felt like lawmakers were content to accept the missed opportunities. But most of the truly objectionable ideas failed to pass – and on the whole, the 2023 session was arguably the best for small business in more than a decade!
Good Bills: Passed
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SB 498 – Estate Tax Relief for Natural Resources Sector Businesses
NFIB Position: Supported
SB 498 sets a new $15 million estate tax exemption threshold for small businesses in the farm, forestry, and fishing industries, which is especially important for estates comprised mainly of illiquid assets, like farmland, ranchland, forestland, or a fishing vessel.NFIB has hundreds of Oregon members engaged in agriculture and the natural resources sector – and this bill is a great first step in addressing an inevitable problem for multigenerational family businesses. We hope this is the beginning of a continuing dialogue about reforming or eliminating Oregon’s estate tax.
SB 498 was an NFIB Key Vote for the 2023 Oregon Legislative Session. For more information, click here.
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HB 2083 – SALT Workaround Extension
NFIB Position: Supported
HB 2083 extends a voluntary Oregon income tax program that allows qualifying business owners to reduce their federal income tax liability.In 2017, the United States Congress passed into law the Tax Cuts and Jobs Act (TCJA). Among many other provisions, the TCJA limited a taxpayer’s ability to deduct state and local taxes (SALT) to $10,000. For business owners in Oregon, this change had a significant impact on federal tax liability and reduced the overall benefit of the 2017 tax reforms for these taxpayers.
Along with most states that have an income tax, Oregon responded in 2021 with the creation of a SALT cap workaround. At the time, Oregon opted for a two-year sunset of the program. It should be noted that HB 2083 does not create a new tax, nor does it create a new credit – it simply extends an existing tax program that helps Oregon businesses reduce their federal tax liability through 2025, when the federal cap on the SALT deduction is set to automatically expire.
HB 2083 was an NFIB Key Vote for the 2023 Oregon Legislative Session. The bill passed by a vote of 52-1 in the House, with seven members excused. For more information, click here.
Bad Bills: Passed
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SB 592 – Increased Penalties for Workplace Safety Violations
NFIB Position: Opposed
SB 592 makes significant changes to how the Oregon Occupational Safety and Health Division (Oregon OSHA) enforces the state’s occupational health and safety laws. The legislation focuses on monetary punishment, increases penalties, and ramps up inspections but does little else to enhance current health and safety best practices.SB 592 was an NFIB Key Vote for the 2023 Oregon Legislative Session.
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SB 1089 – Universal Health Care Governance Board
NFIB Position: Opposed
SB 1089 establishes a Universal Health Plan Governance Board and directs the board to create a comprehensive plan for implementing a government-run, single-payer Universal Health Plan to be presented to the Legislature no later than September 15, 2026.For the last four years, a legislative task force has been laying the groundwork for this next step in the process, with the ultimate goal of eliminating private health insurance in Oregon. The task force considered two new taxes to pay for this massive expansion of state government: an employer payroll tax designed to generate $12.85 billion per year and a personal income tax (in addition to the existing state personal income tax Oregonians already pay) designed to generate $8.5 billion per year, for a total of $21.35 billion in new taxes per year.
A 2023 survey of NFIB’s membership in Oregon found that 90% of our small business members oppose replacing private insurance plans with a government-run single-payer health care system.
SB 1089 was an NFIB Key Vote for the 2023 Oregon Legislative Session. For more information, click here.
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HB 3409 – Climate Omnibus Package
NFIB Position: Opposed
An amalgamation of several other legislative measures introduced during the 2023 session, HB 3409 is an omnibus bill relating to climate that passed in the final days of the session.Among its many provisions the bill directs multiple state agencies to facilitate greenhouse gas reductions, specifies energy performance standards for certain commercial buildings, modifies building code policies, and makes significant changes to the Oregon Global Warming Commission, which will be now known as the Oregon Climate Action Commission. Many practical questions remain, and agency rulemaking will be extensive in the coming years as this bill is fully implemented. For more information, click here.
Bills That Failed to Pass in 2023
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SB 127 – $5 Million CAT Exemption
NFIB Position: Supported
SB 127 would have raised the current $1 million exemption for the Corporate Activity Tax (CAT) to $5 million.The $1 million threshold was originally sold as a small business exemption, but due to the pyramiding effects of a gross receipts tax, even the smallest of small businesses have seen substantial increases in costs. This has only been made worse by labor shortages, supply chain issues, inflation, and an increase in the overall tax burden on Oregon businesses in recent years.
Raising the CAT exemption threshold to $5 million would have exempted 72% of current CAT-paying businesses completely – and would have reduced CAT liability for businesses with higher gross sales as well.
SB 127 was referred to the Senate Committee on Finance and Revenue and received a public hearing on February 15. NFIB testified in strong support, but the bill did not move forward. For more information, click here.
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SB 456 – Estate Tax Repeal
NFIB Position: Supported
SB 456 would have completely repealed Oregon’s estate tax, but an amendment to the bill would have simply raised the exemption threshold from $1 million to $1.5 million – a very modest change that would have barely accounted for inflation since Oregon first implemented its current estate tax policy more than a decade ago.The bill was referred to the Senate Committee on Finance and Revenue and received a public hearing on May 15. NFIB testified in support, but the bill failed to move forward in light of SB 498 being the estate tax bill legislators were most interested in passing this year. For more information, click here.
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SB 803 – Petroleum Diesel Fuel Ban
NFIB Position: Opposed
SB 803 would have phased-out and eventually banned the sale of petroleum diesel fuel in Oregon.NFIB testified in opposition. The bill was then moved to the Joint Committee on Ways and Means, where it did not receive any further consideration.
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SB 925 – Wage & Benefits Disclosure Mandate
NFIB Position: Opposed
SB 925 would have required all Oregon businesses to publicize ranges of compensation and descriptions of employment benefits for job postings, promotion opportunities, and transfer advertisements. The bill would have also authorized new penalties, fines, and allowed for a private right of action in addition to BOLI enforcement.NFIB testified in opposition and the bill failed to move forward.
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HB 2057 – Wage Claim Liability
NFIB Position: Opposed
HB 2057 would have made general construction contractors liable for the unpaid wages of their subcontractors. Making one independent business liable for the unpaid wages of another would have been a dangerous precedent to set, regardless of the specific industry being targeted.HB 2057 was an NFIB Key Vote for the 2023 Oregon Legislative Session. The bill was the first house vote of the 2023 session to pass with 31 votes – the minimum required for a house bill to pass, which sent a strong signal to the Senate that the bill was highly controversial. The bill was then referred to the Senate Committee on Labor and Business where it received two more public hearings, but ultimately failed to receive a floor vote in the Senate. For more information, click here.
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HB 2800 – Age Discrimination
NFIB Position: Opposed
HB 2800 would have prohibited employers from asking about the age of job applicants prior to completing an initial interview or making a conditional offer of employment. It would have also prohibited employers from using certain words or phrases in the job application process that could suggest age preferences. The bill would have created a new private right of action in addition to BOLI enforcement.NFIB testified in opposition along with a large coalition of business groups. The bill failed to move forward. For more information, click here.
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HB 3242 – Private Right of Action Against Insurance
NFIB Position: Opposed
HB 3242 would have established a new private right of action against insurers for unfair practices, including practices that are not described in current law. Plaintiffs would be entitled to up to three times actual damages as well as attorney fees.This bill would have increased insurance rates for nearly all lines of insurance at a time when Oregonians and their businesses cannot afford any more cost burdens. Small businesses rely on affordable insurance rates to protect their businesses, their employees, and the customers they serve. HB 3242 would have moved Oregon’s insurance market away from a proven model that is working for most Oregonians to one that incentivizes expensive litigation.
HB 3242 was an NFIB Key Vote for the 2023 Oregon Legislative Session. The bill went to a conference committee the day before the session ended, but the final version of the bill that came out of the conference committee did not have the votes to pass again on the Senate floor. It failed by one vote. For more information, click here.
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HB 3243 – Insurance Lawsuits Under Oregon’s UTPA
NFIB Position: Opposed
HB 3243 would have made insurance subject to Oregon’s Unlawful Trade Practices Act (UTPA), allowing private lawsuits against insurers and awards of both actual and punitive damages, in addition to attorney fees.The bill would have led to higher litigation costs to resolve claims, which creates market pressure to increase premiums. For many Oregon consumers and businesses, this would mean policyholders paying more for the same coverage – and if they could not afford to pay more, they would risk leaving themselves under-insured.
The bill passed on the House floor, with one Republican voting with Democrats in support. When the bill finally reached the Senate floor, it was voted back to committee unanimously, killing the bill. For more information, click here.
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HB 3498 – $21 Minimum Wage & 32-hour Work Week
NFIB Position: Opposed
HB 3498 would have reestablished a statewide minimum wage in Oregon, doing away with the current three-region approach that was adopted in 2016, by setting the new minimum wage at $15 per hour starting on July 1, 2024 and raising the minimum by $1 per year until 2030. Similar to current law, the rate would then increase annually based on increases to the Consumer Price Index (CPI).The bill would also redefine full-time work, requiring overtime pay for hours worked in excess 32 hours per week.
The bill was referred to the House Committee on Business and Labor. It did not receive a public hearing and failed to advance.
On a Final Note …
The fact that so many harmful bills were stopped in their tracks, or amended to be more palatable, is something we can be proud of. That doesn’t take the sting out of the bad bills that passed this year, or the good bills we supported that failed to advance, but as was noted at the beginning of this report, the 2023 Oregon Legislative Session was one of the least harmful long sessions we’ve seen in recent memory – and even had a few bright spots here and there.
To view and/or print a more comprehensive version of this report, click here.
Please reach out to NFIB if you have any questions about any of the bills you’ve read about in this report, even if you’re just looking for more detail. And if there’s a bill you tracked that isn’t on this list, we’ll be happy to investigate it for you. As a reminder, during session NFIB works on bills that affect a significant majority of our members, not every bill that could affect a single member. For those, we can help connect you with your industry-specific group, your state legislators, or both.
Thank you for your support during the 2023 legislative session. We couldn’t do this important work without you.
