State Policy Update - Oct 14, 2024 | National Association of Wholesaler-Distributors

Big Picture: State Policy

As the election draws closer, most state capitols are silent while lawmakers hit the campaign trail. With fewer than 40 days to go until Election Day, early voting and absentee voting have already begun in numerous states. Taking a look at some of the trends across state legislatures over the last year, multiple states attempted to issue their own non-compete limits or bans, with limited success. However, this will likely be a regained focus across numerous states next year as the Federal Trade Commission’s noncompete rule was blocked by a federal judge. Additionally, we have seen an effort to enact legislation specifically targeting warehouses, such as requiring written descriptions of production quotas and mandating ergonomic requirements in warehouses. Lastly, state attorneys general are also active in pushing back against EPA rules and state-level emissions standards, with multiple states moving in lockstep to push back against vehicle emissions standards and electric vehicle mandates.

Given the legislative hiatus we are experiencing, this update highlights some key legislation NAW is tracking that has been enacted into law this year that will impact the wholesale distribution industry.

2024 State Legislative Sessions

California

Throughout its two-year session, the California Legislature introduced over 4,700 bills. This Legislation ranged from provisions on labor, tax, trucking, ports and energy. Of those introduced, below are four bills signed into law that will have implications for wholesaler-distributors operating in the state of California.

Planning and zoning: logistics use: truck routes – AB-98 introduces new regulations regarding planning and zoning for logistics use, particularly focusing on warehouse developments. Specifically, the bill establishes statewide design and construction standards for new or expanded warehouses. It also mandates a minimum setback of 300-500 feet between loading docks and property lines of sensitive sites, such as schools, healthcare facilities, and residential areas. Operators of these facilities must also develop and submit truck routing plans to local governments who are charged with ensuring plans meet these new regulations before approval.
Commercial financing transactions: fees – SB-1521 aims to protect small businesses from excessive fees in commercial financing transactions. Specifically, it prohibits financial institutions from charging automated clearinghouse transfer, documentation, unclear origination, collateral monitoring or lien fees. The prohibition does not apply if the transaction is an asset-based loan, factoring, or a finance charge, and the fee is intended to compensate the financial institution for actions taken to validate collateral.
Taxation – In an effort to address corporate taxation in California, SB-167 continues the disallowance of the net operating loss deduction for corporations for tax years 2024-2026. It also establishes a $5 million limit on business credits that can be claimed by corporations and allows the carryover of unused credits within the same timeframe.
Employer communications – SB-399 prohibits employers from taking adverse actions (e.g. termination, discrimination, retaliation, etc.) against employees who choose not to attend employer-sponsored meetings or participate in communications regarding an employer’s views on political or religious issues. Employers are required to provide regular pay to employees who decline to attend these meetings, and the bill imposes a $500 civil penalty on employers for each occurring violation.

Colorado

After 120 days in session, the Colorado General Assembly concluded their legislative session sending 526 bills out of 705 introduced to Gov. Jared Polis. This is the highest number of bills since 2019 (721), but short of the record (735) set in 2003. Of particular interest, Gov. Polis vetoed bill HB 24-1260 concerning a prohibition against disciplining an employee for refusing to participate or attend an employer-sponsored meeting concerning religious or political matters or declining to listen to a speech or view religious or political communications from the employer. The Governor stated he had significant concerns with the broad and uncertain implications for employers and employees.

Below are three enacted laws this session that wholesaler-distributors operating in Colorado should be aware of.

Maximum Number of Employees to Qualify as Small Employer – In the context of health insurance coverage and small group health benefit plan eligibility, SB 24-073 modifies the classification of a small employer from an entity that employs 1-100 employees to one that employs 1-50 employees in a calendar year.
Overweight & Oversize Motor Vehicle Permits – SB 24-220 mandates that overweight and oversize vehicle permit applications include specific information about the vehicle, load, highways to be used, type of trip, and movement type. The bill also requires third-party documentation verifying the load’s weight for those between 200,000-500,000 pounds. A penalty of $1 per pound over the permitted weight is imposed if a vehicle does not have the required documentation.
Employee-Owned Business Office & Income Tax Credit – In addition to the creation of a state Employee Ownership Office, HB 24-1157 establishes a refundable tax credit for up to 50% (and no more than $50,000) of specified costs incurred by new employee-owned businesses for income tax years 2025-2029. New employee-owned businesses are defined as businesses that have been employee-owned for 7 or fewer years. The program will be administered by the Employee Ownership Office, which may allocate up to $1.5 million in tax credits per year.

Minnesota

During the state’s two-year session, a combined 11,023 bills were introduced between the House and Senate. Of these bills, only 52 were sent to the Governor’s desk and all were signed into law. Below are several bills that will impact distributors in Minnesota.

Wage Claims/Complaints – HF 5242 allows the state Dept. of Labor and Industry to inspect the business records of any employer to investigate wage claims/complaints by an employee against the employer. Monetary penalties may be imposed if records are not submitted, and damages/penalties may be imposed on employers should they be found in violation of the law.
Minnesota Paid Leave Law – HF 5363 prohibits an employer from taking action against employees requesting or obtaining benefits or leave. Leave is inclusive of “any day for which the state determines that the employee deemed eligible for benefits”, “meets the eligibility criteria” outlined by the state or “the employee has applied for benefits in good faith”.
Failure to disclose mandatory fees in advertising added as a deceptive trade practice – HF 3438 added the failure to disclose mandatory fees in advertising as a defined “deceptive trade practice” in state law. The bill requires such fees to be included in advertised prices for goods and services, with exemptions for government-imposed taxes and specific industries like motor vehicle dealers and utilities. It also sets specific price transparency requirements for online delivery platforms.

Oklahoma

In total, the Oklahoma Legislature introduced 5,433 bills and wrapped up its legislative session sending 552 bills to Governor Stitt’s desk. Stitt vetoed 38 bills, and the Legislature overrode six of those vetoes. Below is a bill that would be of particular interest to wholesaler-distributors in Oklahoma.

Fair Practices of Equipment Manufacturers, Distributors, Wholesalers and Dealers Act – HB 3970 updates the “Fair Practices of Equipment Manufacturers, Distributors, Wholesalers and Dealers Act” by redefining “equipment” to exclude fixtures and related repair parts that are permanently attached to real property. The bill expands the scope of equipment covered under the Act to include various vehicles and machinery used in agricultural, forestry, industrial, and maintenance activities.

Oregon

Oregon’s Legislature had a short session this year. The legislature introduced 291 bills, memorials and resolutions, of those 135 were passed. Oregon passed one bill that specifically targets warehouses.

Protections for warehouse workers – HB 4127 imposes rules and standards for quota requirements that can be placed on warehouse employees. This bill covers employees employed at a warehouse distribution center of 100 or more employees at a single warehouse distribution center or 1,000 or more employees at one or more warehouse distribution centers in this state. The bill also creates an exemption for certain employers who are subject to a collective bargaining agreement that meets certain criteria. Failure of employers to comply with these requirements shall subject them to civil penalties.