Lawyers Handed Rare Senate Floor Defeat

Date: June 07, 2019

Will legislators allow the cap-and-trade bill to bankrupt highway trust fund?

State Director Anthony Smith reports from Salem on the small-business agenda for the legislative week ending June 7

It’s now Day 137 of the 160-day Oregon Legislative Session. The end is in sight, but we still have some tough battles ahead of us.

In brief:

  • Cap and Trade Bill Still Clinging to Life: The cap-and-trade bill (HB 2020) is still alive, but major questions about the bill’s impact on Oregon’s economy, the state’s highway trust fund, and school funding have caused an unexpected delay in the bill’s progress.
  • Trial Lawyers’ Unlimited Jury Award Bill Dies on Senate Floor: It’s a rare occurrence in the Oregon Legislature to see a bill die on the floor. That happened this week when HB 2014 – a bill that would lift the current $500,000 cap on noneconomic damages (pain and suffering) for most civil injury lawsuits – died on the Senate floor.
  • Last-Ditch Effort to Pass Paid Family and Medical Leave Lurking: HB 2005 proposes an employer/employee payroll tax to fund a new state-administered paid family and medical leave program. It’s one of the last remaining big-ticket pieces of legislation – and it’s rumored to be getting a public hearing/work session sometime very soon.

In full:

Cap and Trade Bill Still Clinging to Life
The cap-and-trade bill (HB 2020) had finally hit a serious speed bump two weeks ago when a Legislative Revenue Office memo requested by Rep. Caddy McKeown was released. It concluded that the legislation would eventually bankrupt the state’s highway trust fund. Later, the media reported that the bill could also divert money from the state’s Common School Fund to the cap-and-trade program, based on a Legislative Counsel opinion requested by Rep. Christine Drazan. Here’s an in-depth article on these legal questions from Nigel Jaquiss at Willamette Week.

You would think that this should have been enough to kill the bill, but then again, this is Oregon. The Ways and Means Subcommittee on Natural Resources passed the bill June 5 on a party-line vote. The full Joint Committee on Ways and Means was scheduled to pass the bill on June 7 and send it on to the House floor, however, the bill was pulled from the agenda the night before the hearing. You can read The Oregonian’s report on this here.

As noted in this article from OPB, an amendment has been submitted by Sen. Betsy Johnson that looks very similar to several amendments that have been proposed by Republicans earlier in the session. The key difference is that Sen. Johnson is a Democrat and one of the powerful co-chairs of the Joint Committee on Ways and Means, where the bill currently resides. The proposed amendment would maintain many of the structural features of the current version of the bill while ensuring that regulated industries have an opportunity to adapt before being punished by an arbitrary cap – and would protect Oregonians from dramatic price increases. At a minimum, these amendments should be adopted, but NFIB will remain opposed to the bill, based on our member ballot results from 2018 – 80% of NFIB members opposed the creation of a cap-and-trade program for Oregon.

Trial Lawyers’ Unlimited Jury Award Bill Dies on Senate Floor
Following a 14-15 vote on the Senate floor June 4, HB 2014 failed to pass and its supporters have little hope for its revival before the session ends later this month, as reported by The Oregonian. The bill would have lifted the current $500,000 cap on noneconomic damages (pain and suffering) for most civil injury lawsuits. Four Democrats (Sen. Lee Beyer, Sen. Betsy Johnson, Sen. Laurie Monnes Anderson, and Sen. Elizabeth Steiner Hayward) joined all 11 Republicans in defeating the bill.

NFIB opposed HB 2014 for several important reasons. Objective and predictable economic damages are already unlimited and fully recoverable under current law, which is a fair and reasonable approach to our liability system because it takes into account medical costs, lost wages and lifetime earning potential. Punitive damages are also unlimited. Noneconomic damages, however, are subjective and unpredictable – and so they are limited in Oregon (and many other states) in order to bring stability to our liability system and ensure that the cost of liability insurance remains affordable.

As noted by OPB, the medical and business communities prevailed over the trial lawyers on this one. It’s incredibly rare to see a bill die on the floor of either chamber, especially in the Oregon Senate, where bills typically are only voted on when the majority party knows the votes are there to pass it.

Last-Ditch Effort to Pass Paid Family and Medical Leave Lurking
One of the last remaining big-ticket pieces of legislation is rumored to be popping up on the agenda for the House Committee on Rules within the next two weeks. HB 2005 proposes an employer/employee payroll tax to fund a new state-administered paid family and medical leave program. As a reminder, 90% of NFIB members in Oregon opposed the creation of such a program on the 2019 Oregon Member Ballot survey.

Legislative language (in the form of a proposed amendment to the bill) has been circulating in the Capitol indicating that both businesses and workers would fund the program via a 1% payroll tax – 60% from employees and 40% from their employers. Employers with fewer than 25 employees would not have to pay the employer portion of the payroll tax, but they will still have to hold jobs open for employees choosing to use the benefit (probably 12-16 weeks.)

While NFIB is glad to see that the state’s smallest employers might not be required to pay into the system (if the amendment is adopted), it remains troubling that they will lose their ability to hire permanent replacement employees, which is a right they have today under current state and federal laws.

When one employee is out on family leave at a big-box chain, the employer is more likely to be able to cover the employee’s responsibilities by re-assigning other workers or offering part-time employees more hours. When a small business that employs five people has someone out on family leave, that’s 20 percent of the workforce. This exacts a toll on the business owner – and other employees.

The smaller the business, the more likely that each employee specializes in specific duties and the less likely that other employees on staff will have the same skill sets in order to cover for the employee on leave. Small businesses, by nature of being small, are more likely to need replacement workers. If HB 2005 were to pass, they will inevitably be forced into impossible situations where uniquely skilled employees could be on leave for several months, requiring them to find replacements in an economy where there is currently only 1.5 Oregonians looking for work for every job vacancy. This is only exacerbated by the fact that the employer wouldn’t be able to promise the replacement worker a permanent position because of the job protection requirement in the bill that applies to employers of all sizes.

Previous Reports and News Releases from the State Capitol

Oregon State Capitol at Sunset

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