The Oregon Legislature has reached the midpoint of its 2026 session, with lawmakers considering a range of bills that could affect small businesses in the state. State Director Anthony Smith provided an update on recent developments, highlighting both legislative wins and ongoing concerns for business owners.
A key issue this week was Senate Bill 1507, known as the federal tax disconnect bill. The bill passed the Senate on February 16 by a narrow margin of 17-13, with all Republican senators and Senator Mark Meek (D-Gladstone) voting against it. Smith noted, “This was NFIB’s first Small Business Key Vote of the 2026 legislative session, meaning it will likely appear on our official NFIB Oregon Voting Record, which is published every two years – here’s the one from 2024, for reference.” After moving through the House Committee on Revenue with a public hearing held February 18 and passage soon after, the bill is now headed to a full House vote.
NFIB is urging members to contact their representatives and oppose SB 1507 using its action alert system before an expected final vote around February 24.
Another significant event occurred on February 18 when House Bill 4098 failed to pass in the Oregon House of Representatives by a vote of 28-30. The bill would have added violations of insurance statutes to Oregon’s Unlawful Trade Practices Act (UTPA), potentially leading to increased litigation within the state’s insurance market. Eight Democrats joined Republicans in opposing HB 4098.
According to Smith: “As noted in NFIB’s testimony on the bill, HB 4098 would have risked increasing insurance rates at a time when Oregonians and their businesses cannot afford any additional cost burdens. It would have moved Oregon’s insurance market away from a regulatory model to one that incentivizes litigation.”
Oregon already allows consumers to bring lawsuits or file complaints if they believe they have been treated unfairly by insurers. The Division of Financial Regulation can order claims payments or impose fines for bad faith actions under current law. Adding further enforcement through UTPA could have led insurers to raise premiums due to higher legal costs, potentially forcing some consumers or businesses to reduce coverage.
Smith described this outcome as “a huge legislative victory and one of the most bi-partisan floor votes in opposition to a measure in recent Oregon history!” He thanked lawmakers who voted against HB 4098 and encouraged continued advocacy on other pending bills.
In another development, HB 4089—which originally proposed felony charges for payroll errors or hiring unlicensed contractors—was amended after concerns were raised about its scope. Initially, it included severe penalties even for unintentional mistakes by small business owners. Following discussions among stakeholders in committee hearings, amendments narrowed its application so felonies only apply if construction contractors intentionally hire unlicensed labor after previous convictions or misuse another contractor’s license with intent to deceive.
Smith commented: “While it was very alarming when the bill proponents first brought this concept forward, this is a great example of how the legislative process ought to work. One side had an idea, but it was way too broad, so they worked with the opposition to find a right-sized solution.”
The next public hearing for HB 4089 is scheduled for February 24; if no further changes occur beyond those agreed upon by stakeholders, NFIB expects to withdraw its action alert regarding this legislation.
Lawmakers are set to continue work on remaining bills ahead of adjournment at the end of Oregon’s short session.
