Legislative Update - Round Two - Oregon's Second Special Legislative Session Starts Today

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The Legislature is set to meet again starting today for the 2nd Legislative Special Session of 2020. Legislative special sessions are unique in that they are unscheduled, unless called by the Governor or Legislature, and there is no time limit. That means the scope of what is debated is determined and restricted, in large part, by the party in charge.  The prime objective of this special session is to rebalance the state budget, which is suffering significant shortfalls in revenue from income taxes, lottery receipts, and other taxes and fees on sales. While discussions to rebalance budget have gone relatively smoothly over the past few weeks, the debate over other potential policy bills continues and will remain uncertain until the session adjourns later this week.

 

On the budget front, the current shortfall will be made up by tapping into the state financial reserves, across-the-board cuts implemented in the spring, and cutting back on new programs and vacant positions in various agency budgets. The stated goal of legislators and the Governor's Office is to hold education and health/human service budgets harmless. Democratic leadership will need Republican votes to access the rainy day fund.

 

The more controversial component of the upcoming special session is the approach to additional policy bills such as housing. MHCO has spent much of the Oregon summer working with Legislators to discourage additional policy bills involving landlord-tenant laws.  We are cautiously optimistic that the changes made regarding landlord-tenant laws in the first special legislative session will remain unchanged. 

 

On other issues, as of this morning there appears to be no consensus regarding policy bill including housing.  There continues to be calls for additional police reform bills, but finding consensus on those has been harder than in June. Business groups have been working around the clock to try and achieve some protection from lawsuits stemming from the COVID pandemic, and while a majority of legislators support the concept, political posturing looks likely to undermine much-needed protection for businesses and employers. 

 

Finally, of interest to those of you concerned about tax issues and the Federal CARES ACT – last week, the House Revenue Committee unveiled an effort to disallow companies paying Oregon taxes from receiving the tax relief provided through the bi-partisan federal CARES Act. The current proposalwould disconnect Oregon's tax code from the federal tax code, thereby eliminating favorable treatment for net operating losses realized during the pandemic and relief from interest expenses for those businesses accessing much needed capital to survive.  Update:  over the weekend the House Democratic Caucus decided to not pursue the ‘disconnect’ and will remain status quo and stay connected.  This may be revisited later this year.

 

As legislators continue to debate thru the balance of the second special legislative session whether to take up any ‘policy’ issues, MHCO will be monitoring developments and will be providing updates when necessary.  With limited public engagement and transparency into legislative meetings and negotiations it is difficult for many Oregonians to understand, follow and engage with the Legislature not only on housing issues, but most issues pending in the 2nd special session, and potentially more special sessions to come this year.  

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