By: Mike Salsgiver
Executive Director, AGC Oregon-Columbia Chapter
This article was published by the DJC on March 20 in Buildings Bridges and Roads and can be viewed here (subscription required).
The 2018 Oregon legislative session recently wrapped, nearly a week early, on March 3. This session, just like previous short sessions, once again illustrated the importance of time. It also serves as a “preseason” to Oregon’s next long legislative session. We survived the 2018 short session, and now we know what we’re up against in 2019.
Many of the legislative concepts proposed needed time and further examination. This short session served as a clear reminder of the frenzy that comes with sweeping policy proposals paired with a limited amount of discussion.
There were many bills of concern to our industry. Fortunately, many of these bills failed to pass out of both chambers. But most of these proposals will be back in 2019, which is shaping up to be a consequential year as we work to protect the construction industry from even more harmful laws and regulations.
Here’s a quick look back at 2018.
Of the 260 bills introduced in the 2018 session, a wide range of issues arose: from cap and trade to wage theft to the idling of diesel engines to increases in small business tax rates.
On top of these policy proposals were some bills relating to the implementation of the $5.2 billion transportation package passed by the Oregon Legislature in 2017. The Oregon Department of Transportation (ODOT) needs additional project managers and engineers to implement the new funding package. The Legislature provided funding for 111 new employees so that ODOT can deliver the projects to come in the next decade. This is a big win and will provide ODOT the resources to get the work done.
There were some surprises this year as a proposal to address a construction industry “wage theft issue” became one of the more prominent ones. House Bill 4154, as introduced, would have done little to solve the perceived issue. Instead, the bill would have held general contractors liable for unpaid wages to subcontractors’ employees and added multiple new private rights of action. Even with amendments, the bill would have been ineffective and created unintended consequences placing unsustainable pressure on general contractors. We expect this issue to be back in front of us in 2019.
As part of an industry that stands solidly in favor of paying employees what they are owed, AGC will use the period between now and the 2019 session to better determine what additional remedies, if any, may be needed to protect employee wage rights.
Also of interest to the construction industry was House Bill 4144. This bill was introduced with the goal of increasing the number of residential contractors available to build affordable housing in rural Oregon. The bill creates a pilot program allowing those workers with eight years of experience to take the Construction Contractors Board (CCB) licensure exam without having to take the class or pay the fee.
What wasn’t surprising this session? The number of bills relating to the environment. Primary among these bills was one modeled after a cap-and-trade program in California, along with the attempt to regulate off-road diesel equipment and limit the idling of diesel engines around a prescribed set of institutions.
The cap-and-trade proposal received several public hearings and work sessions over 27 days and is expected to move forward in the 2019 legislative session.
The cap-and-trade bill failed to pass out of committee, while the idling bill passed the Senate. Once the idling bill was amended, it ultimately failed to maintain bipartisan support. With current statutes restricting the amount of time idling can occur, it appeared the bill would have done little to impact harmful pollution or offer relief to the areas that claim to be hit most by emissions.
No legislative session would be complete without lots of energy being spent talking about taxes.
Lawmakers evaluated Oregon’s connection to the federal “Tax Cuts and Jobs Act,” which President Trump signed into law just before Christmas in 2017. The Oregon bill, Senate Bill 1528, narrowly passed both chambers and if signed by the governor, would disconnect Oregon from the 20 percent income deduction for pass-through business entities and pick up more than $200 million a year in revenue that otherwise would have served as tax relief for small businesses. As this column is being written, the governor has not yet decided whether to sign the bill.
What lies ahead for 2019?
Now that the 2018 session is over, some of the attention will move from policy toward politics as campaigns play out between now and November. Oregon continues to experience significant increases in state revenue, while at the same time being faced with a structural operating deficit driven by PERS unfunded liability (which drains public agency budgets), as well as significant cost increases caused by the expansion of Oregon’s Medicaid program. It’s sure to be an active and jam-packed interim as the possibility of supermajorities open the door to tax increases.
We’re looking at a tough 2019 as many of the issues that ended up on the back burner or those bills that died in committee in 2018 will be resurrected and fought again next session. From cap and trade to the continued attempt to aggressively regulate off-road diesel equipment and employment-related directives, our industry will once again be heavily affected by the issues being debated in Salem.
Mike Salsgiver is the executive director of Associated General Contractors’ Oregon-Columbia chapter. Contact him at 503-685-8305 or mikes@agc-oregon.org.