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HomeMy WebLinkAboutItem 01 Overview of the 2017 Oregon Legislative Session AGENDA ITEM SUMMARY Meeting Date: 9/11/2017 Meeting Type: Work Session Staff Contact/Dept.: Niel Laudati/CMO Staff Phone No: 541-736-7800 Estimated Time: 20 Minutes S P R I N G F I E L D C I T Y C O U N C I L Council Goals: Provide Financially Responsible and Innovative Government Services ITEM TITLE: OVERVIEW OF THE 2017 OREGON LEGISLATIVE SESSION ACTION REQUESTED: Solicit feedback and look for direction moving to the 2018 session. ISSUE STATEMENT: Based on Council direction, the City Manager’s Office developed a legislative program focusing on increasing the participation and reach of the City related to our state and federal priorities. ATTACHMENTS: Attachment 1 – Overview of the 2017 Legislative Session. DISCUSSION/ FINANCIAL IMPACT: The Oregon Legislature convened for the long session on February 1, 2017 and adjourned on July 7, 2017, with nearly 3,000 bills introduced. The city worked closely with Howe Public Affairs and our regional partners to participate on behalf of the community. The city’s Legislative Committee of council representatives and our internal staff committee were vital to the success of the session. This report summarizes the final status of priority bills at the end of the 2017 Oregon legislative session. Springfield entered the session with five main support priorities: 1. Transportation (including funding for maintenance and 42nd Street) 2. Innovation and Economic Development (including TRT legislation) 3. Housing (including ‘affordable workforce housing’) 4. Finance (including ROW management and PERS Reform) 5. Forest Policy (including support for advance wood projects) Priority highlights include: 42nd Street in Springfield: A major priority for Springfield during the session, the City received $12 million for work related to the stretch of 42nd that draws heavy traffic from industry, commuters, shoppers and businesses as a quick north-south route. Maintenance dollars were also secured within HB 2017. Housing: behind transportation, housing was the legislature’s priority issue this session. Our staff provided information and feedback on a number of bills that changed and evolved at a very fast pace. Economic Development: While our main focus was setting up for future projects/bills we did have success supporting HB2400 the transient lodging tax bill, we supported our local mills with our work on HB 2269 (Cleaner Air Oregon) and SB634 Woody Biomass as Green Energy bill, and we had several conversations with legislators regarding Mass Timber Projects in Oregon, specifically the CLT Parking Structure in Glenwood. *Additional high priority bills are included in Attachment 1. 2017 City of Springfield OVERVIEW OF THE 2017 LEGISLATIVE SESSION The Oregon Legislature convened for the long session on February 1, 2017 and adjourned on July 7, 2017. More than 2829 bills were introduced during the 2017 Legislative Session. Of those, only about 25% were passed. Democrats held a majority in both chambers, with 17 members in the Senate and 35 members in the House, each just one vote shy of the supermajority needed to raise taxes. Leadership in both chambers remained the same as in 2016: Senate President Peter Courtney Senate Majority Leader Ginny Burdick Senate Minority Leader Ted Ferrioli House Speaker Tina Kotek House Majority Leader Jennifer Williamson House Minority Leader Mike McLane The 2017 Legislative Session was characterized by the unusual circumstance of having a booming economy contributing to record revenues and yet a $1.4 billion deficit to maintain current service levels. The primary drivers of the deficit were Medicaid (reduced federal subsidies to cover the 350,000 new enrollees under the Affordable Care Act), and rising PERS contributions and health care costs for public employers. Also a notable characteristic about the 2017 Session was the distinction between the two chambers with the House of Representatives being progressive and partisan while the Senate postured itself as the moderate, bipartisan chamber. Following the failure of Measure 97, a 2016 initiative to create a gross receipts tax on large corporations, the legislature worked to find the right balance of cost containment and new corporate tax revenue to fund investments in education and other services. However, a deal could not be struck on corporate tax revenue and cost containment, so many agencies experienced budget reductions. A major exception was K-12 Education, which received an $8.2B appropriation, plus $170M to fund Measure 98, the 2016 initiative from Stand for Children that aims to increase the graduation rate through STEM/CTE, dropout prevention and college preparatory programs. Additionally, $550 million in new revenue from a hospital provider tax and insurance premium tax enabled the Legislature to maintain Medicaid coverage for low-income Oregonians. However, this revenue is currently threatened by a referral effort that is working to collect signatures. Attachment 1, Page 1 of 12 2017 City of Springfield The Oregon Legislature adopted a 2017-19 budget comprised of planned expenditures of $19.859 billion General Fund, $1.071 billion Lottery Funds, $31.710 billion Other Funds, and $21.792 billion Federal Funds. The total adopted state budget for the 2017-19 biennium of $74.432 billion is a 3.7% increase from the 2015-17 legislatively approved budget. The combined General Fund and Lottery Funds adopted budget for the 2017-19 biennium is up by 10.3% over the 2015-17 legislatively approved level, but is down by 3.6% from the 2017-19 current service level. On top of balancing the budget, the Legislature continued their efforts to pass a transportation package, which began with the creation of the Joint Committee on Transportation Preservation and Modernization in the Summer of 2016. The committee conducted a listening tour over five months, and then met regularly during the session to develop the package. Ultimately HB 2017 was passed, creating a seven-year program that raises $5.3 billion to fund maintenance and preservation of existing roads and highways, manage freeway congestion, increase transit services, and fund electric vehicle incentives. Workforce and housing policies continued to take center stage. The House sent two controversial policies—predictive scheduling and pay equity—to the Senate, where legislators worked with employer and employee advocacy groups to find compromise that could pass with overwhelming bipartisan support. Affordable housing programs received solid funding, while tenant protections didn’t pass. The possibility still exists that the Legislature could be called into special session to find the “grand bargain” that restructures corporate revenue and manages the long-term costs of PERS and public employee health care. However, the contentious nature of this session, and the tax votes already taken on the gas tax and the provider/premium tax make it unlikely. Interim Legislative Committee Days are scheduled for: September 18-20, 2017 November 13-15, 2017 January 10-13, 2018 The 2018 short session runs February 5–March 9, 2018. The rules for bill introduction are: Senate members each get 1 bill request. House members each get 2 bill requests. Committees each get 3 bill requests. The Governor gets 5 bill requests. The Chief Justice gets 5 bill requests. Every bill request has to come with a problem statement, and a summary of how the bill addresses the problem. LC requests must be submitted by 5pm on November 21, 2017. Bills must be dropped by 5pm on January 16, 2018. Attachment 1, Page 2 of 12 2017 City of Springfield The City of Springfield did not introduce any legislation in 2017, but was involved in supporting and opposing many different policies. This report summarizes the final status of priority bills at the end of the 2017 Oregon legislative session. Springfield entered the session with five main support priorities: 1. Transportation (including funding for maintenance and 42nd Street) 2. Innovation and Economic Development (including TRT legislation) 3. Housing (including ‘affordable workforce housing’) 4. Finance (including ROW management and PERS Reform) 5. Forest Policy (including support for mass timber) BILL REVIEW Springfield actively tracked approximately 300 pieces of legislation during the 2017 session. Below are the priority pieces of legislation separated by category. 1. Transportation HB 2017 – Transportation Package House Bill 2017– Transportation Package Position: Support Status: Passed At the end of the 2016 Session, the Legislative Assembly created the Joint Committee on Transportation Preservation and Modernization to develop a transportation policy and funding package for introduction during the 2017 session. The committee spent five months holding hearings across the state to take testimony from the public and local elected officials and to tour transportation facilities in preparation for assembling the legislation. Once the 2017 session began, the committee created five work groups to develop recommendations for highway preservation, traffic congestion, public transit, public safety, multimodal transportation, and accountability. The result was the successful passage of HB 2017, the largest transportation investment in Oregon's history, creating a 7- year, $5.3 billion package. Notable highlights for the region include: 42nd Street in Springfield: A major priority for Springfield during the session, the City received $12 million for work related to the stretch of 42nd that draws heavy traffic from industry, commuters, shoppers and businesses as a quick north-south route. On June 5 a lobbying group coordinated by Elizabeth Howe and including Councilor Sean VanGordon and Niel Laudati from Springfield and Mayor Vinis and staff from Eugene visited every member of our legislative delegation including (Beyer, Lively, Prozanski, Manning, Holvey and Fahey) the main effort from Springfield was to advocate for the inclusion of 42nd in the Region 2 funding portion of the Transportation Bill. This importance of 42nd Street a regular talking Attachment 1, Page 3 of 12 2017 City of Springfield point for staff during subsequent meetings with the delegation. The money for improvements needs to be allocated by 2024. Notable Funding for the Region Jurisdictional transfer following upgrades of portions of 99W to Eugene Mid-Willamette Valley Intermodal Facility (possibly in Lane County) $10M for passenger rail (in ODOT’s budget bill) Lane Transit EmX Expansion “Moving Ahead” (in lottery fund bill) Public Transit Implements a new 0.1% employee payroll tax to dedicate funding to statewide public transit to improve the connectivity and frequency of bus service in rural and urban communities. An employee earning minimum wage will pay 39 cents each week, totaling about $20.28 each year. 90 percent of this funding will return to the transit district of origin, where it is to be used to increase frequency and service to low-income communities, purchase low emission buses, and create low-income fares. Connect Oregon ConnectOregon has been modified into two programs: ConnectOregon Part One will fund air, marine, rail, bike and pedestrian projects. ConnectOregon Part Two will fund projects of statewide significance for air, marine, and Class I, II, and III railroads. Part Two will only be implemented if there is over $75M available for ConnectOregon, in which case Part Two will received 45 percent of the funds. For the 17-19 biennium, $30 million in lottery funds were allocated to ConnectOregon, plus $60 million in earmarked projects. For the future, new funding sources have been created and dedicated to Connect, including a portion of the new vehicle privilege tax, as well as the $15 bike excise tax, and up to $4M a biennium from State Parks to fund bike and pedestrian projects (the State Parks reimbursement proposal may be unconstitutional due to lottery fund restrictions). The Legislature can also choose to appropriate lottery funds in future biennia. Jurisdictional Transfers Springfield Highway, State Highway 228 from ODOT to the City of Springfield Pacific Highway West, State Highway 91, from the Oregon Department of Transportation to the City of Eugene. Lane County shall transfer the portion of Delta Highway beginning where the highway intersects with Interstate 105 and ending where the highway intersects with the Randy Pape Beltline to ODOT. ODOT shall transfer jurisdiction of the portion of Territorial Highway, State Highway 200 that is located within Lane County from the department to the county. The department may transfer portions of the highway in phases. Attachment 1, Page 4 of 12 2017 City of Springfield ODOT shall transfer jurisdiction of the portion of the Springfield-Creswell Highway, State Highway 222, beginning where it intersects with Jasper-Lowell Road and ending where it intersects with Emerald Parkway to Lane County. 2. Innovation and Economic Development ECONOMIC DEVELOPMENT HB 2400/HB 3180 – Transient lodging/room tax Priority: 2 Final Position: Support Final Outcome: Passed Following an interim workgroup led by Rep. Nathanson on the transient lodging tax, these two consensus bills were introduced to enhance the administration of the transient lodging tax. HB 2400 would give cities the option to have the state administer the TRT program. HB 3180 allows the Department of Revenue and unit of local government to exchange information regarding TRT taxpayers. DOR anticipates a quarterly exchange of information. This could cause some minimal setup costs for cities, but requests may be rejected if deemed unduly burdensome or expensive. HB 2400 has the potential to increase local TRT revenue if DOR has more operators registered than the cities do. HB 2243/HB 2073 – E-Commerce Zones Priority: 2 Final Position: Support Final Outcome: Failed HB 2243 would have extended the electronic commerce zone program until 2024 and increased the number of allowable e-commerce zones from 15 to 21. Springfield has maintained an e-commerce zone since 2014. Staff submitted testimony in support on behalf of Springfield and met with delegation members to discuss the importance of having this option in Springfield’s toolbox. The e-commerce program is an income tax incentive, so there would have been a fiscal impact on the general fund. The bill failed because of the budget impact. HB 2752 – Cross Laminated Timber Priority: 2 Final Position: Support Final Outcome: Failed HB 2752 was brought by The Framework Project to create a grant fund to support CLT high-rise construction. This was the policy bill that supported their effort to get a $2 million appropriation for their project in Portland. Springfield was supportive of the effort and Courtney Griesel and Niel Laudati met with the committee chair, Rep. Ann Lininger (D-Lake Oswego) to express support and discuss the Glenwood Parking Structure project. No funding was allocated to Framework, but the city made significant connections for a potential future ask for the parking structure. Attachment 1, Page 5 of 12 2017 City of Springfield 3. Housing SB 277 – Manufactured Home Tenancy Priority: 2 Final Position: Support Final Outcome: Passed SB 277 clarifies what constitutes disrepair or deterioration, requires landlords to specify what actions would remedy the problems, and provides tenants up to 60 days to remedy the issue. HB 2004 – Tenant Protections/Rent Control/No-Cause Terminations Priority: 2 Final Position: None Final Outcome: Failed HB 2004 was one of the most contentious political battles this legislative session. The House version passed 31-27 removing the preemption for local governments to regulate rents. The bill also eliminated the use of no-cause notices. Both tenants and landlords can use end-of-tenancy notices to indicate they want to terminate a fixed term lease 30 days before its end date, or for month to month rental agreements, with 30 days’ notice within the first year and 60 days for rentals after the first year. HB 2377 – Affordable multifamily housing Priority: 3 Final Position: Support Final Outcome: Passed HB 2377 creates a new optional property tax exemption program that cities can use to incentivize the inclusion of workforce or low-income units in multifamily developments. To implement the tax exemption, a city would have to adopt a schedule, through ordinance, establishing the length and percentage of the exemption based on the number of affordable units. The city would also be required to define the terms “area median income” and “affordable” for families of varying sizes. The exemption cannot last more than 10 years, and taxing districts representing 51 percent or more of the total taxation assessed on the property must agree to the exemption. The program can be used on new construction and rehabilitation projects. The bill includes a number of other technical requirements for implementing the exemption, but the extent of the exemption is determined by the city to meet its goals. House Bill 2215 – Right to Rest Attachment 1, Page 6 of 12 2017 City of Springfield Priority: 2 Position: Oppose Final Outcome: Failed HB 2215 would establish the Oregon Right to Rest Act. The Act would guarantee people in Oregon experiencing homelessness the ability to utilize housing accommodations of their choice, without discrimination. Individuals would be entitled to seek protection from adverse weather conditions that are unsuitable for human exposure in a manner that does not obstruct human or vehicular traffic, and to occupy a motor vehicle or recreational vehicle that legally parked on public property or private property with permission of the private property owner. The act creates an affirmative defense available to a person experiencing homelessness, and subjects any violator of the aforementioned act to civil remedies and penalties. The bill failed to make progress this session, dying in the Judiciary committee without a public hearing. HB 2570 – Affordable Homeownership Grant Program Priority: 2 Final Position: Support Final Outcome: Failed HB 2570 would have provided resources to Oregon Housing and Community Services, and direct the agency to offer grants to non-profit organizations to develop more affordable homeownership options, including building new homes, replacing manufactured homes, or acquire and rehabilitate homes. The intent will be to serve a range of incomes and a range of geographies. The bill would have directed OHCS to offer grants to either: Serve families with a revolving loan fund model. The non-profit organization, such as a Habitat for Humanity affiliate, may purchase or leverage loans made to qualifying families, and their loan repayments will repay the fund over time. Serve families with a capital construction revolving loan fund model. The non- profit organization will build a home and then use the proceeds of the sale to build another home, and so on. HB 2724 – Rent Guarantee Program Priority: 2 Final Position: Support Final Outcome: Passed Renter education programs are offered throughout the state and educate participants on the rights and responsibilities of tenancy. These funds would restore a mitigation fund that covered a portion of landlords’ expenses for damages caused by a tenant who has completed an education program. HB 3401 – Needed housing Attachment 1, Page 7 of 12 2017 City of Springfield Priority: 2 Final Position: Oppose Final Outcome: Failed HB 3401 would have prevented cities from reducing the density of a housing development application if the density meets the zoning designations. The bill would have made changes to the definition of needed housing to include all housing on residential lands. Finally, the bill would have required that a city allow a house to be built on every legal lot zoned for single-family housing. This session, land use was not a major topic of discussion in the Legislature. There were several passed bills that focused on small reforms and addressed specific issues in the land use process. However, broader bills that would have made significant exceptions to the current land use process did not move this session. There were a number of conversations about annexation, land use exceptions, and periodic review as concepts were discussed, but there was little action taken to truly address the concerns with these processes. SB 1051 (HB 2007) – Affordable Housing Development Priority: 2 Final Position: Oppose Final Outcome: Passed SB 1051 requires cities with a population greater than 5,000 to finalize decisions on housing applications for multi-family developments that include affordable units for low-income families within 100 days. Cities with a population greater than 2,500 must allow accessory dwelling units in all single- family zones. The bill changes the definition of needed housing to include housing types for low-income households. SB 1051 further requires that cities allow housing to be built on land owned by worship institutions for affordable housing, provided that the underlying zoning of the land allows housing. It also prohibits a city from lowering the density of a proposed development if it is within the designated density range permitted in the zone. Cities retain some authority to reduce density if there are health, safety or habitability concerns or other protections based on land use goals. SB 310 – Vertical Housing Development Zones Priority: 2 Final Position: Support Final Outcome: Passed SB 310 shifts the oversight for the designation of vertical housing development zones and eligible projects from the Oregon Housing and Community Services Department (OHCS) to local government. Vertical housing development zones and projects therein have needed the approval of the OHCS prior to receiving the tax exemption. SB 310 allows a city to certify the zone and a project’s eligibility directly with the tax assessor’s office. The bill moved all of the current eligibility requirements from rules to statute. In addition, cities and counties are required to consider the potential for economic displacement while making the decision to designate a zone. Emergency Housing Account and State Homeless Assistance Program (EHA & SHAP) Attachment 1, Page 8 of 12 2017 City of Springfield Allocation: $40 million in general fund These programs are run through the Oregon Housing and Community Services Agency and provide critical funds to local communities to prevent and end homelessness and provide emergency shelter. HB 2852A/HB 2066 – Affordable Housing Tax Credit Allocation: $25 million in tax credits The Oregon Affordable Housing Tax Credit helps fund development and preservation of affordable housing. The credit was set to expire in 2020. The legislature renewed the credit in the omnibus tax bill, with a sunset for 2026, and increased the cap to $25M (from $17M) SB 5505 – Local Innovation and Fast Track (LIFT) program Allocation: $80 million general obligation bonds The LIFT program was created in 2015 and allocated $40 million. In 2016, Oregon Housing and Community Services funded 12 projects that created 965 affordable housing units in eleven communities in Oregon. Housing advocates requested $100 million in general obligation bonds for 17- 19, and received $80 million. SB 5530 – Preservation of Existing Affordable Housing Allocation: $25 million in lottery bonds Across Oregon, many federally assisted affordable housing projects are at risk of losing their status because of maturing federal mortgages. Preservation funding allows properties to be upgraded for safety and livability, and for contracts to be renewed for federal housing subsidies. $25 million in lottery bonds was allocated to this program. 4. Finance: HB 2269 – Cleaner Air Oregon Priority: 2 Final Position: Oppose Final Outcome: Failed HB 2269 would have implemented a new, one-time “specific activity fee” fee on air quality permits, including both Title V and air contamination discharge permits (ACDPs). Funds generated would have supported staff at DEQ to investigate complaints and develop and implement a program and rules to reduce the public health risks of air pollution from industrial sources. The first draft of rules for the program were extreme, and multiple local businesses contacted the city to express concerns about the impact on their operations. The city submitted testimony based on information from local businesses and Elizabeth Howe testified in opposition at the public hearing in the Subcommittee on Natural Resources. The important piece to remember is that the bill failed, but funds for the program were Attachment 1, Page 9 of 12 2017 City of Springfield authorized in the DEQ budget. The program will continue, just not with the detrimental pieces that our local businesses were concerned with. Business and DEQ continue to work on workable rules for the Cleaner Air Oregon program. SB 559/SB 560/SB 913 – PERS Priority: 1 Final Position: Watch Final Outcome: Failed The Senate Committee on Workforce held multiple hearings early in session to determine if there was a feasible – both legally and politically – compromise bill to contain PERS costs. Ultimately, no bill moved forward from this committee, as PERS became politically tied to new corporate revenue, which was not addressed until after the policy committees were closed. SB 1068 – PERS Cost Containment Priority: 1 Final Position: Watch Final Outcome: Failed The Senate President introduced Senate Bill 1068 late in session as a PERS cost containment bill to be paired with new corporate revenue. SB 1068 requires a portion of active PERS members’ annual IAP contributions to be redirected into an individual risk sharing account that can be used by the PERS board to pay Tier 1, Tier 2 and OPSRP benefits accrued after July 1, 2018. Beginning July 1, 2018, 1 percent of each employee’s IAP contribution will be redirected into their risk sharing account. Beginning July 1, 2019, that amount will increase to 2 percent. Beginning July 1, 2021, the rate of the redirect will be calculated based on employer contribution rates. It can increase no more than 1 percent a biennium and is capped at 4 percent. It can also be reduced to as low as zero if employer rates drop below 8 percent. As it is phased in, the Legislative Fiscal Office estimates it will save employers $106.7 million in 2017-19. SB 327 – Restoration of Recreational Immunity Priority: 2 Final Position: Support Final Outcome: Passed SB 327 gives employees, volunteers and other agents who are acting at the direction of a land owner immunity from tort liability for injuries sustained by those recreating on the lands such as a park or trail, if access to that land is free of charge. In Oregon, land owners, including cities, who allow recreation to occur on their property and do not charge a fee are granted immunity from civil liability for injuries that occur during a recreational pursuit. However, in 2016 the Oregon Supreme Court concluded in Johnson v Gibson that the statute granting this immunity did not include employees. This decision resulted in the closure of approximately 12 parks or park features by cities due to increased insurance risk. Passage of SB 327 simply gives employees and volunteers the same consideration as the land owner. Attachment 1, Page 10 of 12 2017 City of Springfield TELECOMMUNICATIONS SB 202/SB 840 – Right of Way Fees Priority: 1 Final Position: Oppose Final Outcome: Failed SB 202 would have limited what cities can charge other public bodies for right of way fees to actual cost. SB 840 would have placed caps on right of way fees, and required the state to collect and redistribute fees. The bills received one hearing in the Senate Finance and Revenue Committee and failed to move forward. Mayor Lundberg submitted testimony in opposition at the public hearing for both bills in the Senate Committee on Finance and Revenue. A ballot initiative has been filed on municipal communications and utility privilege taxes, so it’s possible this policy will be pursued outside the Legislative process. HB 2063/HB 2770 – Gigabit Exemption Priority: 2 Final Position: Support Final Outcome: Failed HB 2770 would have repealed the new gigabit property tax exemption provided to qualified centrally- assessed taxpayers during the 2015 session, and instead created a broadband task force to pursue more appropriate broadband incentives. Cities believe the exemption has not provided the intended benefits. The meaning of the exemption provisions is currently being litigated in a suit brought by Comcast against the Oregon Department of Revenue. Discussions are expected to continue during the legislative interim about repealing or amending the terms of the exemption (as HB 2063 would have done). HB 2091 – Universal Service Fund Priority: 2 Final Position: Support Final Outcome: Passed HB 2091 expands the Oregon Public Utility Commission’s authority to use universal service funds to support both basic telephone service as well as broadband service. 5. Forest Policy: Springfield will push for proactive policy changes that create family-wage jobs and allow actively managed access to our forests. SB 634 – Woody Biomass as a Green Energy Priority: 2 Final Position: Support Final Outcome: Passed Under current law, only solar and geothermal technologies are eligible to meet the Attachment 1, Page 11 of 12 2017 City of Springfield 1.5% renewable energy budget requirement for public building construction and renovation. City staff advocated for the bill on multiple fronts following a recommendation from the Legislative Committee. Attachment 1, Page 12 of 12