ORLA UPDATE: 2020 SPECIAL SESSIONS
Legislature Focused on Budget, Employment Issues During Second Special Session
The Oregon Legislature convened for its second special session of 2020 on Monday, August 10. In a bipartisan vote, lawmakers voted to:
A handful of policy bills also passed, including two relating to unemployment benefits, one about capitol culture, and one further restricting police use of force. ORLA President and CEO Jason Brandt was one of only a few people allowed to testify before the Joint Committee on The Second Special Session of 2020 on SB 1701 dealing with unemployment benefits. The bill, which passed overwhelmingly in both the Oregon House and Senate, provides unemployed individuals receiving unemployment insurance benefits for weeks ending before January 1, 2022, who have earnings from less than full-time employment to earn the greater of $300 or one-third of the individual's weekly benefit amount before individual's weekly benefit amount is reduced. Briefly stated, it allows for employees to earn up to $300 per week before their unemployment benefit is reduced. Previously, employees could only earn ten times the minimum wage, approximately $132.50, before unemployment benefits were reduced.
There is talk of another special session in September which would hopefully address some of the policy issues important to ORLA members and the hospitality industry. Your government affairs team has been tirelessly advocating for to-go cocktails, limited and temporary liability protections for businesses, working to prevent a costly workers’ compensation presumption standard, and fighting against an unfair disconnect from federal tax code in the CARES Act which would withhold assistance from Oregon businesses.
Aug. 11: The second Special Session of 2020 wrapped up in one day, August 10, just past 11pm. The focus was on agency budget cuts as expected, however, ORLA was involved in a leadership role on Senate Bill 1701 which passed with bipartisan support yesterday.
Aug. 10: ORLA provided invited testimony in support of Senate Bill 1701 which is expected to move forward this special session. The bill would provide extra flexibility to employees to pick up shifts in our restaurant and lodging establishments around the state without having to sacrifice unemployment insurance benefits when working part time. SB 1701 proposes to increase the amount an employee can earn in a week up to $300 before they would risk losing unemployment benefits to subsidize their earned wages. Read ORLA’s written testimony. Update: SB 1701 passed (read blog for more information).
ORLA sent a letter last week to Representative Nancy Nathanson, Chair, Members of the House Interim Committee on Revenue, and the Senate Finance Committee urging them to oppose Legislative Concept 2, an ill-conceived proposal that would have imposed $225 million in taxes on Oregon businesses including restaurants and accommodations. Update: Legislative Concept 2 has been removed from consideration from this August Special Session. Industry members helped make a difference by reaching out to their legislators on this issue, a win for the industry.
Aug. 6: Final preparations are being made for the August Special Legislative Session by Speaker of the House Tina Kotek and Senate President Peter Courtney to focus in on general fund shortfalls in the State of Oregon. An agreement has been made to focus on budgetary issues as part of the August session and issues including To-Go Cocktails, which qualifies as an important industry priority, will likely not be taken up based on the rules being established for the session. In addition, the state transient lodging tax has an uphill battle as it will most likely require a separate legislative bill as a non-general fund budgetary consideration. Outside of agency budget discussions, it is possible liability protection against COVID claims will be considered at the state level outside of considerations being entertained at the federal level.
It is of crucial importance to keep your relationships alive and well with your elected leaders representing you in the Oregon Legislature. To look up your House Representative and your State Senator, click on the Oregon State Legislature website and take steps to introduce yourself and engage in a relationship that is helpful to them based on your experience working in Oregon’s hospitality industry.
For the latest updates, read our blog: ORLA CEO Updates
JUNE SPECIAL SESSION
In the first Special Session of 2020, lawmakers did not deal with the budget, including potential cuts anticipated, because of tax revenue shortfalls the state is experiencing. They also did not discuss drawing on the $1.5 billion in reserves. Those and other fiscal issues have been pushed to the next special session, expected later this summer. State leaders are hoping Congress will pass another federal stimulus bill to provide more financial relief to the state, limiting the potential depth of necessary budget reductions.
The following updates represent ORLA’s recap on the activities in the Oregon House and Oregon Senate during the first Special Session from June 24 –26, 2020:
Extending Oregon’s Commercial Eviction Moratorium
On April 1, Governor Brown initiated Executive Order 20-13 establishing in part a commercial eviction moratorium for 90 days for all non-residential tenancies. The State of Oregon emergency declaration across our state continues and as such, an extension of the initial eviction moratorium was warranted for an additional 90 days. Ongoing flexibility extended to tenants to promote positive working relationships with landlords for rental obligations that will still be owed by tenants during the duration of the pandemic is essential to assisting as many small business operators as possible in their efforts to recover and remain solvent.
> Update on Commercial Eviction Prohibition Extension - The June Special Session included House Bill 4213 which passed both the Oregon House and Oregon Senate. The bill prohibits residential and commercial evictions for nonpayment of rent during a defined ‘emergency period’ and ‘grace period’. Sections 5 and 6 of the bill text deal with commercial evictions specifically and define the emergency period as beginning on April 1, 2020 and ending on September 30, 2020. Following the emergency period is a 6 month ‘grace period’ defined in the bill for tenants to pay any outstanding nonpayment balances from the emergency period. The grace period ends on March 31, 2021. Here are the main takeaways for hospitality operators currently facing rent obligations:
Fighting Workers' Compensation COVID-19 Presumption Claims
Some organizations representing public and private sector workers believe a new law should be established making Oregon’s workplaces the default reason for virus spread. A ‘workplace virus spread presumption’ would trigger significant escalations in workers' compensation claims, premium costs, and small business administrative expense at a time when our economic ecosystem is fragile at best. ORLA is adamantly opposed to the establishment of any presumption which discounts the immeasurable ways Oregonians can contract the virus outside of the workplace without appropriate safety precautions.
> Update on Workers' Compensation Presumption Standard - ORLA has opposed proposals for a workers' compensation presumption standard for COVID-19 cases, which would essentially establish a guarantee for workers' compensation coverage for the virus. While a bill for such a proposal was not introduced during this special session, the Governor has asked that the Oregon Management-Labor Advisory Committee (MLAC) provide her a recommendation by mid-July on what to do about worker compensation claims during the COVID-19 era. ORLA will be actively engaged as MLAC schedules their meetings over the coming weeks to provide a recommendation to the Governor’s Office. Related to this issue, ORLA was successful in getting a new “infectious disease standard” permanent rule removed from House Bill 4212. Despite the fact the standard was removed, Oregon OSHA has announced they will move forward with rulemaking to establish a new infectious disease standard. ORLA is engaging with partners, legislators and the agency on this issue.
Advancing Liability Protections for Oregon’s Restaurants and Lodging Establishments
Our country in normal times has grown accustomed to a business environment rife with lawsuits and settlements. The Oregon State Legislature needs to take action to protect Oregon’s second largest private sector industry in providing reasonable liability protections against COVID-19 lawsuits when operators follow all Center for Disease Control and Oregon Health Authority guidelines. A field day for frivolous lawsuits against small businesses is on our doorstep without ground rules established by our elected leaders to protect hospitality businesses operating in good faith.
> Update on Liability Protections - COVID-19 specific liability protections for businesses, schools, non-profits, and local governments was a top priority and we made a lot of noise in the first special session through both written and verbal testimony. Unfortunately, House and Senate leadership was unwilling to consider limited liability protections as part of the first special session despite the depth of activity. We had approximately 100 of our own members take action on this issue in addition to ORLA’s written and verbal testimony. The -38 Amendment within HB 4212 would have provided the limited protections. The Speaker of the House and the Senate President have requested a working group be formed. ORLA will provide reports on the working group’s activities once those discussions begin. In addition, limited liability protections is also part of the ongoing conversation at the national level and remains a top priority for both the National Restaurant Association and the American Hotel & Lodging Association in partnership with ORLA and other state associations.
Launching “To-Go” Cocktails in Oregon
Every state surrounding Oregon has authorized a cocktails to-go program to support a hospitality industry in crisis. States have established safe and reliable ways to launch these programs and provide a creative opportunity to assist restaurant operations in their quest to survive. ORLA estimates we may see anywhere from 1,000 to 2,500 permanent foodservice location closures in the coming 18 months out of approximately 10,000 foodservice locations in existence before the pandemic. An Oregon To-Go Cocktail Program would serve as one tool assisting thousands of operators in regaining sales at a critical time and we can implement the program safely as proven by states across our country.
> Update on To-Go Cocktails - At the time of this writing, a total of 24 states have a To-Go Cocktail program and we have heard firsthand how this flexibility has assisted restaurant operators in their survival in other states. The Oregon Legislature was not willing to take up legislation allowing for a To-Go Cocktail program in the first special session. As a result, ORLA will be polling Oregonians to better understand overall interest level so we can bring data to the media and Oregon’s Legislature in their next special session. Stay tuned for how you can be involved in getting To-Go Cocktails the attention it deserves as part of the legislative process.
Update 7.29.20: ORLA, in partnership with the National Restaurant Association, recently completed a statistically significant survey around To-Go Cocktails, drinks made with distilled spirits for takeout, pickup or delivery to go along with meals purchased by guests. The survey, conducted July 3-6th, shows 72% or nearly three in four Oregonians, said they would favor a proposal allowing customers to purchase cocktails or mixed drinks (made with distilled spirits) with their takeout and delivery food orders from restaurants. This is in addition to beer and wine, which is currently allowed. See infographic.
Protecting the Statewide Lodging Tax for Tourism Promotion at 1.8 Percent
Now more than ever Oregon will need every industry dollar available for tourism promotion as an integral part of our overall economic recovery. Oregon’s statewide lodging tax is set to sunset to 1.5 percent from the current 1.8 percent rate on July 1 unless the sunset clause is removed during the June special session. ORLA is a staunch advocate for the ongoing and complete protection of this resource for tourism promotion via our semi independent state agency Travel Oregon. Removing the sunset and utilizing the full 1.8 percent statewide lodging tax for ongoing industry promotion will be critical to recovery efforts.
> Update on Statewide Lodging Tax - Another issue which did not receive fair consideration was the Statewide Lodging Tax. Governor Brown continues to be supportive of a 1.8 percent statewide tax rate which will officially be reduced to 1.5 percent as of July 1, 2020. This past year, ORLA’s Board of Directors voted to support keeping the statewide lodging tax at 1.8 percent with the ongoing understanding local and state lodging taxes are industry taxes designed to support tourism promotion and related facilities. We expect the statewide lodging tax rate to be reconsidered in an upcoming special session.
Pausing Oregon’s Minimum Wage for 18 Months
Due to a quirk in Oregon law, thousands of hospitality workers in Oregon count as minimum wage workers while earning far more than minimum wage. Oregon has one of the highest minimum wage rates in the country and is set to increase even higher on July 1. We have 2 choices here in Oregon – we can (1) arbitrarily increase compensation for thousands of workers who count as minimum wage employees but make more than minimum wage through tip income and tip pooling or we can (2) bring as many Oregonians back to work as possible and relieve historic pressure on the Oregon Employment Department’s unemployment insurance trust fund. Oregon legislators will need to pick one of these options in the June 2020 special session.
> Update on Automatic Minimum Wage Increase Pause - ORLA has advocated for the importance of pausing minimum wage rates as we attempt to bring as many people back to work as possible. Changing Oregon’s scheduled minimum wage rate increases every July 1 continues to be a non-starter in the halls of the Capitol building. We know there are thousands of Oregonians making more than minimum wage through tip pools and tip income but who still count as minimum wage workers. Under the circumstances, a hard look at Oregon’s high minimum wage rate would have made a difference for small businesses. Expect it to be off the table for future considerations.
For more information on ORLA’s ongoing Government Affairs efforts please contact Greg Astley, director of government affairs.
2020 LEGISLATIVE FRAMEWORK & BILL TRACKING
ORLA's focus during the 2020 Legislative "Short" Session was on a few key bills including lodging tax, high velocity gaming, and short-term rentals. However, the "short" session was called to an early end on March 5, leaving several bills to die, including HB 4047 which would have kept the state lodging tax rate permanent at 1.8%. Without HB 4047, the statewide lodging tax rate of 1.8 will sunset on July 1, 2020, and be reduced to 1.5 percent. Read more on the legislative framework:
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