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Dear friends,
The Legislature has entered the final week of its 2016 short session (35 days). It has been a whirlwind three weeks with fast deadlines and some "politics as usual," but the Legislature has passed important bills for Oregon. Included below is a listing of notable legislation that has passed so far this session.
We also received more good news on the economic front. Oregon's economy continues to grow in communities across the state. The latest forecast shows that revenues are more or less on track with our budget from the 2015 session. That means we can stay on course to deliver increased funding for schools and maintain our investments in critical services for Oregonians. Included below is more detailed information on the March Revenue Forecast.
Below you will find information on:
- Notable Legislation Passed So Far This Session
- March Revenue Forecast
- Feedback Opportunity: LTD Service Investments
- I-5 ramp at Elkhead Road Closed Until March 25
- IRS Free File
I hope this information is helpful and informative for you or someone you know. As always, feel free to share your comments, questions or concerns with me by phone, mail or e-mail.
Notable Legislation Passed So Far This Session
The following are summaries of a number of important bills that have passed the Senate or both chambers so far this session. (Bills are listed by by Senate/House bill and in numerical order. This session, Senate bills start with SB 1500 and House bills start with HB 4000.):
Senate Bills
SB 1511 - Reducing Impacts on Medical Cannabis Patients: This legislation ensures that medical cannabis patients have access to medical marijuana free of taxation. Under current law, there are two separate regulatory systems — the Oregon Medical Marijuana Program administered by Oregon Health Authority for medical cannabis and the Oregon Liquor Control Commission for adult recreational use — to oversee marijuana production, processing and sale. Preliminary data show that a significant number of medical cannabis growers, caregivers and dispensaries are moving over to the OLCC-run adult use system. This could potentially leave many of the 77,000 OMMP patients statewide without a medical grower, caregiver or dispensary. SB 1511 includes several provisions that allow greater access to both systems for OMMP registrants, OLCC license-holders and the general public. It allows OLCC licensees the ability to produce, process, transfer or sell marijuana to medical cardholders, processors and dispensaries tax-free.
OLCC licensees will be able to obtain a single license that will allow them to produce, process and sell both adult use and medical cannabis products within the OLCC-licensed system. SB 1511 also prohibits OLCC-licensed retailers from collecting taxes on products sold to OMMP cardholders or designated primary caregivers. OHA will be required to adopt rules establishing terahydrocannabinol (THC) single-serving limits for products sold to OMMP cardholders, as well as to those not registered for the program.
SB 1511 now awaits consideration in the House.
SB 1514 - Allowing Certain Entities to Repackage, Distribute Donated Prescription Drugs: This legislation provides an additional pathway for donated prescription drugs to be made available to many of the state's most vulnerable residents. It permits registered drug outlets participating in Oregon's Charitable Prescription Drug Program to repackage certain donated prescription drugs and transfer them to other programs for distribution. The charitable Prescription Drug Program operates by accepting certain surplus drugs, repackaging them according to stringent requirements, and donating them to charitable pharmacies serving Oregonians in need. Currently, most eligible pharmacies do not have the space, staffing or equipment necessary to store and repackage the medications, which has been a barrier to the program's positive impact.
Having also passed the house, SB 1514 now awaits the Governor's signature.
SB 1532 - Increasing Oregon's Minimum Wage: This three-region minimum wage measure phases in increases in the state minimum wage over six years. It phases in a minimum wage of $14.75 in the Portland metropolitan area, $12.50 in rural counties and $13.50 in the Willamette Valley Northwest Oregon, as well as Jackson, Josephine, Deschutes, Wasco and Hood River counties. In contrast, a proposed ballot measure would raise the minimum wage statewide to $13.50 by January 2018.
The three-region approach in SB 1532 provides for different wage levels based on cost of living in different areas of the state. It helps address the needs of those facing high cost of living in the more populous areas of the state while also adjusting to fit the economic realities of mid-sized and rural communities. Each region in the bill is formed based on county-level demographic analysis data that defines the amount of income necessary to meet the basic needs of Oregon families, differentiated by family size, composition and location. The analysis takes into account the costs — based on the region — of basic needs including housing, childcare, food, transportation, health care and miscellaneous items like clothing. It also gradually phases in the minimum wage over six years.
Having also passed the House, SB 1532 now awaits the Governor's signature.
SB 1558 - Making Health Records Property of College Students: This legislation protects the rights of university and college students regarding medical, mental health and counseling records. It prohibits disclosure of health, mental health and counseling records by colleges and universities under most circumstances. SB 1558 protects a student's right to confidentiality when seeking services from campus-based health and counseling centers by ensuring that those records are not disclosed to other offices of a college or university or any other entity, except in appropriate circumstances. The bill clarifies that medical records are not student records and belong to the students, not the institutions they attend. This privacy protection is critical for any student, and especially meaningful for students experiencing abuse, trauma or crisis who turn to their campus-based health centers for support.
Having also passed the House, SB 1558 now awaits the Governor's signature.
SB 1591 - Compelling Release of Records When Insurers Act Unlawfully: This legislation increases transparency in the insurance industry by compelling release of the details of complaints against insurance companies. The public doesn't currently have access to the details in insurance company complaints and there's no database available that tells how many insurers breach their duty to defend their clients against lawsuits. SB 1591 improves transparency for consumers shopping for insurance plans. The bill makes all complaints against insurers a public record. The manner in which the regulatory agency addressed the complaint will be available with each complaint.
SB 1591 now awaits consideration by the House.
House Bills
HB 4014 - Bipartisan Cannabis-related Legislation: This bill establishes a youth marijuana-use prevention pilot project in the state and alters regulations on the new industry. It requires the Oregon Health Authority (OHA) to establish a youth marijuana-use prevention pilot project in urban and rural areas in the state. HB 4014 removes the two-year residency requirement for registered grow sites, processors and retailers, which opens up investment opportunities for those new businesses. It streamlines the process for Oregon Medical Marijuana Program applicants by applying a 30-day deadline for OHA to approve or deny applications. The bill also requires OHA to develop recommendations on clinical guidelines for physicians who prescribe marijuana and report to specific legislative committees on rules adopted or steps taken on recalling contaminated or unfit cannabis and other products derived from cannabis. It allows medical growers, processors and retailers to transfer their inventory to their new line of business when they become Oregon Liquor Control Commission licensees. Finally, HB 4014 amends penalties relating to cannabis-related crimes, recognizing that it is now a legal substance, and it establishes a process for governing boards of cities or counties who wish to repeal ordinances prohibiting establishment of some licensed or registered cannabis establishments.
Having already passed the House, HB 4014 now awaits the Governor's signature.
HB 4053 - Expanding Retail Opportunities for Brewery License Holders: This legislation expands retail opportunities for brewery licensees to sell malt beverages, wine and cider directly to consumers; holding special events; selling growlers containing wine, malt beverages and cider; and holding a license to sell distilled spirits on the premises. Brewers would retain the ability to distribute their products through a wholesale vendor. Currently, a malt beverage manufacturer must choose whether to hold a brewery license or a brew-pub license. A brewery license allows manufacturing and distributing products, but limits retail sales. Brew-pub licenses allow for manufacture and retail, but distribution opportunities are limited. Right now, brewers can hold winery licenses simultaneously, which allow them to sell their products directly to the public. HB 4053 — brought forth by a work group composed of brewers, distributors and wineries — closes that loophole by allowing direct sale through brewery licensure. It also prohibits brewers from holding winery licenses unless they produce wine or cider on premises.
Having already passed the House, HB 4053 now awaits the Governor's signature.
March Revenue Forecast
On February 10, the Senate and House Committees on Finance & Revenue received the latest state revenue forecast. Oregon's economy continues to grow at a healthy pace. Unemployment rates – which represent the best single leading indicator of economic health – are at historic lows. Most other indicators, including housing starts, business openings, and employment rates, all clearly identify Oregon as an "expanding economy."
Manufacturing
Despite overall expansion, industrial production and manufacturing is experiencing a slight decline. This is attributed to the drop in global energy and commodity prices and the appreciation of the U.S. dollar. Fortunately, Oregon's economy is not largely energy-based and will therefore likely experience only an indirect effect of these dropping global prices.
Job and Wage Growth
Oregon's job gains are growing faster than most other states, with job growth outpacing the typical state by more than one percentage point. The most recent national job growth data places Oregon seventh in the nation for job growth in December; during 2015 Oregon added 48,100 jobs (a 2.7 percent increase). This job growth is not exclusive to Portland or to metro areas. In fact, all regions within Oregon are not only adding jobs, but at rates comparable to past economic expansions.
Revenue Outlook
Projected revenues for the 2015-17 biennium are up $60.8 million since the December 2015 Forecast, with Net General Fund resources up $36 million and Lottery resources up $24.8 million. Since the close of the 2015 legislative session, General Fund and Lottery resources are up $69.1 million. This represents a Corporate Tax revenue projected increase of $34.3 million and a Personal Income Tax projected decrease of $21.4 million. With projected reserves from the Rainy Day Fund ($386 million), Education Stability Fund ($371 million), and General Fund ($319 million), Oregon'’s budgetary reserves are stronger than ever at $1.07 billion.
Financial Market Volatility and Impacts
The financial market recently experienced higher than normal volatility, with a 10 percent drop in stock prices. Oregon's personal income tax collection is tied to capital gains taxes, and while this drop has not impacted our 2015-17 outlook, if the trend continues it will likely significantly impact Oregon's 2017-19 and 2019-21 biennia.
Risks and factors being monitored
Oregon is expected to maintain a growth advantage relative to other states. However, the Office of Economic Analysis has identified three growth avenues that will be important to monitor going forward: 1) the state's dynamic labor supply, 2) the state's industrial structure, and 3) the current number of new business start-ups. Oregon has historically benefited from in-migration of skilled labor from other states, however the availability of jobs or housing may affect this influx in the future. Oregon's industrial sector is weighted heavily toward semiconductors and wood products, which are expected to grow the slowest among manufactured products moving forward. Finally, despite Oregon experiencing an increase in new business license applications over the past couple of years, these applications remain relatively low as compared to historical standards.
Feedback Opportunity: LTD Service Investments
Lane Transit District (LTD) is entering the second year of a planned three-year, $3 million investment in transit service funded by the payroll tax increase that the Legislature authorized in 2009. For this round of investment, LTD is focusing on improving frequency, connectivity, and access. On March 16 at 5:30 p.m. in the Eugene Library Bascom-Tykeson Room, the public will have opportunity to weigh in on LTD's proposals to improve transit service. Click here for more info, to review the proposed changes and to offer feedback.
I-5 ramp at Elkhead Road Closed Until March 25
The northbound Interstate 5 on-ramp at Elkhead Road (Exit 154) is scheduled to be closed until March 25, 2016. While the ramp is closed, I-5 traffic will be reduced to a single lane in each direction between milepost 154 and 157.
The ramp and lane closures will allow the prime contractor, K&E Excavating, to repave a three-mile segment of the northbound lanes. This is the first stage of the $40.5 million I-5 Anlauf to Elkhead Paving project, which will resurface all I-5 travel lanes between milepost 154 and 162 and construct a southbound climbing lane at milepost 161. The project is scheduled for completion in fall 2017.
More project information is available at: http://www.oregon.gov/ODOT/HWY/REGION3/Pages/Anlauf-Elkhead.aspx.
IRS Free File
With the tax filing deadline just around the corner (April 18), please consider visiting www.IRS.gov/freefile to take advantage of free tax preparation and e-filing services available through the IRS Free File program. Powered by The Free File Alliance, a coalition of 13 industry-leading tax software companies partnered with the IRS, the Free File program provides free access to the industry's most innovative and secure tax software.
Every taxpayer with a 2015 Adjusted Gross Income of $62,000 or less may visit www.IRS.gov/freefile to prepare, complete and e-file their federal tax returns at no cost. Free state return options are also available. In addition, Free File provides basic online e-filing services, called Free File Fillable Forms, to all taxpayers regardless of income.
Free File also helps taxpayers with the new health care requirements. Using Free File, most taxpayers will simply have to check a box to report health care coverage for the entire year.
The Free File Alliance, a coalition of 13 industry-leading tax software companies, has partnered with the IRS since 2003 to help low and middle-income Americans prepare, complete and e-file their federal tax returns online. The Free File Alliance is committed to giving 70 percent of taxpayers free access to the industry's top online tax preparation software. More than 46 million returns have been filed through Free File since its inception. For more information, visit: www.freefilealliance.org.
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