Revenue

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April 18, 2022 - Sine Die

By Josie Koehne


Important Tax Credit Bills


HB 4055A–engrossed bill passed unanimously on the Senate floor on March 2. Besides terminating the Private Forest Accord mitigation funding in Section C (once $250 million has been spent and after the an “Accidental Take Permit” has been issued by the EPA), the A-engrossed requires ODF to report on the 2022 timber harvest data by March 10 during the long session so that new harvest tax rates can be reviewed in ample time by both revenue committees before adoption by the close of session.


SB 1501 B is the main policy bill for the Private Forest Accord (PFA) concerning rule-making by the Board of Forestry for its many provisions, and the adopted amendment states that the restrictions do not apply to the tribes unless they chose to adopt those rules. The bill passed the Senate floor on March 2 and was referred to Ways and Means, where it had a third reading on the House floor on March 3.


SB 1502 A The Private Forest Accord’s small woodland owner tax credit passed out of Senate Finance and Revenue passed unanimously on Feb 24 had a third reading on the House floor on March 3 where it also passed without opposition. The credit compensates the small woodland owner upon harvest for the timber not harvested in a wider riparian buffer zone than required to match the commercial timber no-cut zone. The A-engrossed version clarifies the definitions section, and states that the unused credit can be used by heirs, including against any estate tax owed, but may not be passed along to another owner. The 50-year no-cut zone attaches to the title and must be observed by subsequent owners or they will be charged a penalty for non-compliance.


HB 4054, the historic property tax credit, was signed into law by the Speaker and the President on March 2 and awaits the governor’s signature. It extends the current tax credit with modifications including a new formula based on its historical real market value rather than its assessed value.


HB 4115 concerning transparency of the state’s financial investments and reporting which the League supports in this testimony had a third reading on the House floor on March 2 and passed along party lines and was referred to Senate President Courtney.


HB 4002 B is the highly controversial bill that requires agricultural workers to be paid for overtime work that passed unanimously in House Revenue on Feb 22 and was referred by order of the Speaker to the Joint Committee On Farm Worker Overtime on Feb 24 where it had a public hearing followed by a work session. The bill with the A-12 amendment became the B engrossed, narrowly passing 6-4 along party lines. House Bill 4002 B-engrossed establishes maximum hour and overtime wage requirements for Oregon agricultural workers. Maximum hours are phased in over five years, which begin at 55 hours in 2023 and are reduced to 40 hours by 2027. The measure establishes a refundable tax credit against corporate income taxes to offset a percentage of the additional cost of overtime wages paid by a crop or animal production business to accommodate concerns by those opposed. The third reading was held March 1 on the House floor where a motion narrowly failed 28-31 to refer the bill back to the overtime committee. The bill passed 37-23 and was then moved to the Senate that day where it was referred back to the Joint Committee On Farm Worker Overtime where it passed with the B-engrossed amendment. On March 3, two efforts on the Senate floor to delay the bill failed, and the bill narrowly passed 17-10. Opponents claim the overtime requirement will put agricultural businesses out of business, but proponents claim that both California and Washington have required overtime bills and the state will be reimbursing them for overtime payments in a phased approach. To further appease opponents, a net operating loss tax credit for agriculture that can be carried back for three years was added into another bill, SB 1524 described below.


SB 1524 A, an omnibus tax credit bill that includes several provisions that would have a big impact on future revenue had the third reading where it passed on the Senate floor on Feb 28. It was then referred to House Revenue where it held a work session on March 2. The League was opposed to Gain Share provision and emailed this testimony to each member of House Revenue. Testimony both for and against the many provisions was heard during several public hearings on Feb 7, 14, and 16. Although the A engrossed bill was expected to pass, a last-minute amendment was added, the -24 to extend Gain Share for just 1 extra year, rather than for six years in the original bill, as a compromise between opponents and proponents of Gain Share. It was gratifying to hear Chair Nathanson use our very arguments about letting the Gain Share be reviewed as scheduled next year in the Joint Committee for Tax Expenditures, rather than passing the tax credit extension for a total of 14 years without proper review. Opponents tried to add the original six-year extension back into the bill with the -25 amendment, but that failed and the -25 was adopted and became SB 1524 B-engrossed which passed unanimously on March 2 in House Revenue and passed on the House floor on March 3. A marijuana tax for the city of Ontario to compensate it for its heavy costs monitoring the second largest marijuana production in the state from illegal Idaho traffic failed to pass, and a new tax credit for medical technicians in rural areas was removed from the bill.