Salem, Ore. – January 31, 2020 Legislative Forecast
The “short” 35-day legislative session begins on Monday, February 3, 2020 and will be fast and furious. The legislature used to only meet in odd-numbered year in “long” sessions. The “short” even-numbered year sessions were added a decade ago and pitched as being necessary for “housekeeping” and budget reconciliation purposes. In practice, they’ve turned out to be vehicles to advance major policy changes. Below is a sampling of what is coming.
Governor Proposes Double Tax on Real Property
Oregonians resoundingly passed Measure 79 in 2012, amending the Oregon Constitution to prevent taxes on the sale of real property. Oregonians already pay significant taxes on their homes in the form of property taxes and did not feel it was fair to be taxed again upon the sale or transfer of their property. However, Governor Brown is proposing to undue this constitutional ban on double-taxation with HJR 203. This Joint Resolution would refer to voters a constitutional amendment to allow for real estate transfer taxes. OAR will be working vigorously to oppose the Resolution.
Speaker of the House Tina Kotek will be introducing a bill that would declare a “homelessness state of emergency.” The bill would allow local governments to bypass zoning restrictions when siting shelters. She also wants the state to devote $40 Million in General Fund resources to create and operate shelters, and another $80M in bonding including $50 million of general obligation bonds that would go toward construction of affordable housing and $20 million of lottery bonds would go toward saving existing affordable housing. Read more about the proposal in the Oregonian.
Legislature Tries to Nix Opportunity Zone Benefits Just as Program Gets Off the Ground
Opportunity Zones (“OZs”) are designated, economically-distressed communities where private investments, under certain conditions, may be eligible for deferral and/or exclusion of capital gain taxes. OZ’s were created to stimulate economic development and job creation by encouraging long-term (10 year) investments in low-income neighborhoods.
Opportunity Zones are just getting started but unfortunately they are under attack in the Oregon Legislature. The House Revenue Committee has proposed HB 4010 bill to “disconnect” the Oregon tax code form the federal tax code with respect to Opportunity Zones. If the bill passes, Oregon investors would no longer receive capital gains deferrals or exclusions on their Oregon income tax for investments in Opportunity Zones (however they would still receive the federal tax benefits).
There will be a public hearing on the Opportunity Zone Bill at 5:30pm on Thursday February 6th at the State Capitol in Salem. We are collecting stories from members about why Opportunity Zones are a valuable economic development tool and should be supported, not undermined, by the Oregon legislature. If you have a story to tell about Opportunity Zones and why the legislature should maintain tax benefits for this important program, reach out to us so we can coordinate written or in person testimony.
Will Oregon Finally Allow Rural ADUs?
For the past several years there has been a severe inequity in property rights between urban and rural homeowners. A few years back, the legislature passed a law requiring cities to update their codes to allow for accessory dwelling units (ADUs) on land zoned for single-family residential homes inside the Urban Growth Boundary. However, the requirement did not extend to rural residential zones. In fact, except in a few cases, ADUs are not even allowed in rural residential zones. OAR has been working with other partners to allow Counties—at their discretion—to allow for ADUs in rural residential zones, with certain limitations. We are currently working on amendments to legislation that would allow for Rural ADUs. We will keep you posted as more details emerge.