HOUSE SPECIAL SESSION COMMITTEE ON BUDGET RECONCILIATION

Third Special Session

 

June 14, 2002 Hearing Room F

10:45 AM    Tapes 7 - 10

 

MEMBERS PRESENT:            Rep. Rep. Westlund, Chair

Rep. Tom Butler

Rep. Gary Hansen

Rep. Betsy Johnson

Rep. Susan Morgan

Rep. Kurt Schrader

Rep. Lane Shetterly

 

STAFF PRESENT:                  Fiscal Staff

                                                Revenue Staff

Andrew Morris, Committee Assistant

Sandy Thiele-Cirka, Committee Assistant

 

MEASURES HEARD:                     Work Session

                                                            HB 4053

                                                Introduction of Committee Measures

                                                            LC 37-1 – State School Fund and state finance

                                                            LC 47 – Revenue Bonds for State School Fund

                                                            LC 46 – Implementation of Measure 88

                                                            LC 49 – Public Employees Retirement Board

                                                            LC 54 – Common School Fund

                                                            LC 25 – Statewide Special Election

                                                Public Hearing and Work Session

                                                            SB 1022

                                                            HB 4055

                                                            HJR 80

                                                            HB 4052

                                                            HB 4056

                                                            HB 4057

                                                            HB 4058

                                                            HB 4054

                                                            HB 4051

                                                            HB 5091

                                                            HB 4059

 

These minutes are in compliance with Senate and House Rules.  Only text enclosed in quotation marks reports a speaker’s exact words.  For complete contents, please refer to the tapes.

 

TAPE/#

Speaker

Comments

TAPE 7, A

004

Chair Westlund

Calls meeting to order at 11:55 a.m. and opens a work session on         HB 4053.

HB 4053 – WORK SESSION

010

Rick Olsen

Legislative Analyst, Legislative Fiscal Office (LFO).  Summarizes   HB 4053 which delays the sunset on the hearings officer panel until January 2, 2006.  States that with the current sunset it would create budgeting problems for the 2003-05 biennium. 

023

Rep. Butler

Explains the original intent of the sunset.

033

Rep. Shetterly

Explains the intent of the sunset extension is to make the budgeting process easier.  States that the sunset and the panel will be looked at in the 2003 session. 

050

Rep. Hanson

Asks if there are any other sunset provisions that this type of provision would help.

055

Olsen

Responds no. 

057

Rep. Johnson

Asks for the language showing a review of the panel will take place in the 2003 session.

062

Rep. Shetterly

Responds the specific language is not the bill.  States that there will be a bill whether HB 4053 passes or not. 

084

Rep. Shetterly

MOTION:  Moves HB 4053 to the floor with a DO PASS recommendation.

 

 

VOTE:  7-0-0

AYE:               7 - Butler, Hansen, Johnson, Morgan, Schrader, Shetterly, Westlund

093

Chair Westlund

The motion CARRIES.

REP. SHETTERLY will lead discussion on the floor.

INTRODUCTION OF COMMITTEE MEASURES – WORK SESSION

099

Olsen

Explains LC 37-1 (EXHIBIT A). 

110

Rep. Schrader

Asks about the state school fund grants.

115

Chair Westlund

Explains the need for the bill.

131

Steve Meyer

Economist, Legislative Revenue Office (LRO). Provides background of LC 37-1, section 3. Explains that the $4.9 million referenced on pg. 2, line 16 is the figure from the first special session. Explains that the education service districts (ESDs) supported shifting some of the loss to school districts from the state school fund dollars. States that ESDs requested that they specify how the loss is to be shared among the ESDs. Adds that if the state school fund is reduced, and the ESDs share in that reduction and states that the ESDs requested that the dollars be shared on a per weighted student basis.

175

Rep. Schrader

Questions if ESDs will share the burden not share in excess of burden.

178

Meyer

Responds the ESDs would share in the burden of the $112 million and then specify how the burden is shared among the ESDs for any reduction in state school fund dollars.

181

Rep. Schrader

Clarifies that this LC is an open ended solution to hold the ESDs relatively harmless.

185

Meyer

Responds affirmatively.

189

Rep. Johnson

Questions Section 6, sub 2. Questions how the bill addresses the 911 tax.

198

Olsen

Responds that he does not have that information.

201

Rep. Shetterly

MOTION: Moves LC 37-1 BE INTRODUCED as a committee bill.

VOTE: 7-0-0

 

Chair Westlund

Hearing no objection, declares the motion CARRIED.

NOTE: LC 37-1 introduced as HB 4055.

206

Chair Westlund

Closes work session on LC 37-1 and opens work session on LC 47.

LC 47 – WORK SESSION

214

Paul Warner

LRO. Summarizes and explains LC 47 (EXHIBIT B). States that this measure will allow the State Treasurer to issue revenue bonds to be paid from the flow of revenue from the master settlement agreement. Notes that the revenues obtained from the bonds will be placed in the State School Fund before May 1, 2003.

242

Rep. Schrader

MOTION: Moves LC 47 BE INTRODUCED as a committee bill.

VOTE: 7-0-0

 

Chair Westlund

Hearing no objection, declares the motion CARRIED.

NOTE: LC 47 introduced as HB 4056.

247

Chair Westlund

Recesses the committee at 12:13. Reconvenes the meeting at 4:49 p.m. Opens work session for introduction of committee measures, LC 46, phases in implementation of Measure 88.

LC 46 – WORK SESSION

254

Lizbeth Martin-Mahar

Economist, LRO.  Summarizes LC 46 (6/12/02) to the committee (EXHIBIT C). Explains that the measure phases in the implementation of Measure 88 for two years and decreases the maximum amount of the federal income tax deduction for Oregon personal taxable income.

280

Rep. Shetterly

MOTION: Moves LC 46 BE INTRODUCED as a committee bill.

VOTE: 7-0-0

285

Chair Westlund

Hearing no objection, declares the motion CARRIED.

NOTE: LC 46 introduced as HB 4054.

287

Chair Westlund

Closes work session on LC 46 and opens work session on LC 49.

LC 49 – WORK SESSION

289

Dick Yates

Economist, LRO. Summarizes LC 49 to the committee (EXHIBIT D). Explains that the bill directs PERS to adopt new mortality tables January 1 of each year, beginning 2003, that PERS adopt new mortality tables as of the effective date of this act and to apply those tables to any one who retires on or after the 61st day from the effective date and before January 1, 2003. Describes the lower employer assessments.

382

Rep. Shetterly

MOTION: Moves LC 49 BE INTRODUCED as a committee bill.

VOTE: 7-0-0

387

Chair Westlund

Hearing no objection, declares the motion CARRIED.

NOTE: LC 49 introduced as HB 4057.

388

Chair Westlund

Recesses meeting at 4:56 p.m.

389

Chair Westlund

Reconvenes meeting at 6:35 p.m. and opens public hearing on           SB 1022.

SB 1022 – PUBLIC HEARING

391

Chair Westlund

Determines no one wishes to testify on SB 1022. Closes public hearing on SB 1022 and opens work session on SB 1022.

SB 1022 – WORK SESSION

403

Meyer

LRO. Summarizes and reviews modifications of SB 1022. Reviews the –A3 (EXHIBIT E) and –A4 (EXHIBIT F).

429

Rep. Schrader

Questions the effect of the -8% balance.

436

Ozzie Rose

Confederation of Oregon School Administrators (COSA). Responds that the 8% relates to that portion of the State School Fund that is being established to accrue in the cash basis districts to eliminate those districts from accruing their own cash. Continues explanation.

450

Rep. Shetterly

Clarifies that these amendments equalize the cash basis districts with the accrual districts in an effort to benefit from the retiming.

453

Rose

Responds affirmatively.

TAPE 8, A

008

Rep. Shetterley

MOTION: Moves to ADOPT SB 1022 –A3 amendments dated 6/14/02.

010

Chair Westlund

Hearing no objection, declares the motion CARRIED.

011

Meyer

Summarizes -A4 amendments (EXHIBIT F).

021

Rep. Shetterly

Clarifies that this amendment guarantees that the distributions between present and May will be higher than actuality.

024

Rose

Responds that the distribution will be based on the end of session estimates. Notes that the districts will be treated from the present until May as if the districts are meeting the end of session amount. Clarifies that the additional language will assist the districts with the auditors and the audit reports.

039

Rep. Hansen

Questions if the –A4 amendment is a technical modification and questions the impact for 2003-05 biennium.

046

Rose

Responds and describes that the legislature is shifting an expenditure until the next budget cycle and the districts are being allowed to accrue the revenue during this budget cycle.

063

Rep. Butler

Questions if any interest will accrue.

067

Rose

Responds and explains that each district has a unique payment schedule. States that some districts may have to borrow money, but some may not.

091

Rep. Shetterly

Comments and further explains the -A4 amendment. Acknowledges appreciation for COSA’s work and effort on the amendments.

102

Rep. Schrader

Requests review of additional advantages.

104

Rose

Responds that the schools will receive the funding in 2001-03 budget cycle, that $5.2 million is the base budget figure and identifies the advantage of the payment schedule in 2003-2004.

145

Rep. Shetterly

MOTION: Moves to ADOPT SB 1022  –A4 amendments dated 6/14/02.

147

Chair Westlund

Hearing no objection, declares the motion CARRIED.

148

Chair Westlund

MOTION: Moves SB 1022 be sent to the floor with a DO PASS AS AMENDED recommendation.

VOTE:  7-0-0

151

Chair Westlund

Hearing no objection, declares the motion CARRIED.

REP. SHETTERLY will lead discussion on the floor

154

Chair Westlund

Closes the work session on SB 1022 and opens work session introduction of LC 54.

INTRODUCTION OF COMMITTEE MEASURE – WORK SESSION

161

Chair Westlund

MOTION: Moves LC 54 BE INTRODUCED as a committee bill.

VOTE: 7-0-0

 

Chair Westlund

Hearing no objection, declares the motion CARRIED.

NOTE: LC 54 introduced as HB 4058.

167

Chair Westlund

Closes work session and opens public hearing on HB 4055.

HB 4055 – PUBLIC HEARING

169

Chair Westlund

Determines no one wishes to testify on HB 4055. Closes public hearing and opens work session on HB 4055.

HB 4055 – WORK SESSION

173

Olsen

LFO. Summarizes –1 amendment (EXHIBIT G).

185

Rep. Schrader

MOTION: Moves to ADOPT HB 4055 –1 amendments dated 6/14/02.

187

Chair Westlund

Hearing no objection, declares the motion CARRIED.

193

Rep. Johnson

Requests clarification from the Oregon Employment Department.

201

Frank Richey

Manager, Unemployment Insurance Programs Analysis, Oregon Employment Department. Clarifies the Supplemental Employment Department Administrative Fund (SEDAF) and the backfill with the Reed Act. Explains that currently the fund is used to support employment operations throughout Oregon.

212

Chair Westlund

Clarifies the actuarial integrity of the fund.

216

Richey

Further explains that the current projection is that the monies in SEDAF will not support current service levels beyond the next biennium. States that the potential associated with utilizing $19 million of the Reed Act money is a possible tax increase in 2004-2005.

233

Rep. Schrader

Questions the current tax rate.

236

Richey

Responds that for 2002 tax schedule 3 of 8. Comments that the department is anticipating a move to tax schedule 4 in 2003.

255

Rep. Schrader

Questions which tax schedule was used during the last recession.

257

Ritchie

Responds that after 1991 recession unemployment taxes moved towards the middle. Notes that the reaction in this recession is very close to the reaction of the last recession.

284

Rep. Butler

Questions if the Reed Act funds will be used for backfill distribution.

290

Richey

Responds that the distribution has not been determined.

286

Rep. Butler

Questions if the Reed Act funds will be in jeopardy.

303

Richey

Responds that the current language has been reviewed by staff and determined that it is in the legitimate scope.

315

Rep. Butler

Questions the emergency communication account referenced in the bill.

321

Olsen

Responds the bill addresses three topics.

340

Chair Westlund

Questions without the Reed Act monies, what is the current actuarial integrity of the fund.

344

Richey

Responds that without Reed Act there is $40-$50 million in reserve before moving to schedule 5, which is a very small margin.

404

Rep. Hansen

Questions if the transfer is authorized, does the department foresee a negative impact to unemployment recipients or programs.

413

Richey

Responds that at some point the $19 million would not be available for the administration of current programs.

425

Rep. Hansen

Questions if that would trigger an increase in unemployment tax rate or a decrease in benefits.

431

Richey

Responds that the full proposal brings the SEDAF complete and impacts the trust fund by removing the Reed Act monies.

475

Lisa Trussell

Associated Oregon Industries (AOI). Testifies in opposition to using the SEDAF to the General Fund, section 4 of HB 4055 A.

489

Chair Westlund

Refers to the -1 amendment, line 5 and the blank amount. Requests that $19 million be the figure inserted.

TAPE 7, B

005

Rep. Johnson

Questions language in Section 6, subsection 2, enhanced 9-1-1 Sub account, does it go beyond the $7 million.

010

Olsen

Responds that he does not have that information.

016

Rep. Johnson

MOTION: Moves to ADOPT HB 4055 –1 amendments dated 6/14/02 and that the measure be FURTHER AMENDED on

Page 1, line 5, by inserting “$19 million” after “of” and before “is”.

020

Chair Westlund

Hearing no objection, declares the motion CARRIED.

021

Rep. Johnson

MOTION: Moves HB 4055 be sent to the floor with a DO PASS AS AMENDED recommendation.

VOTE: 7-0-0

027

Rep. Schrader

Requests staff document, the average tax rate chart, be submitted into the record (EXHIBIT H).

035

Chair Westlund

Hearing no objection, declares the motion CARRIED.

REP. SCHRADER will lead discussion on the floor.

039

Chair Westlund

Closes work session on HB 4055 and opens public hearing on HJR 80.

HJR 80 – PUBLIC HEARING

052

Paul Warner

Legislative Revenue Officer, LRO. Summarizes the –5 amendments (EXHIBIT I) and -6 amendments (EXHIBIT J). Discusses the stability fund and notes that on page 2, line 10, of the -6 amendment should be changed from $150 to $180. States that the -6 amendment creates a school capital matching fund when the stability fund reaches the 5% cap.

095

Rep. Schrader

Questions the development of the school capital fund.

097

Rose

Responds that developing the rules on distribution of funds, availability of funds, and the equity of funds. States it will take several legislative sessions to craft the final product. Notes that once the fund is established the education system could begin researching other funding sources to contribute.

120

Rep. Shetterly

Comments on discussion that occurred during the 2001 Legislative Assembly on this topic and states that issue was thoroughly discussed.

129

Warner

Refers to the Revenue Impact statement (EXHIBIT K). Comments on the future projections of the lottery fund.

151

Rep. Shetterly

Acknowledges and requests a bar chart be available for the floor discussion.

156

Rep. Schrader

Requests a chart of the current endowment fund operations and what sub accounts currently exist in the fund.

164

Warner

Responds affirmatively.

167

Rep. Shetterly

Requests Cindy Hunt provide clarification on conceptual amendments.

177

Warner

Reviews the conceptual changes in the -6 amendments.

186

Cindy Hunt

Deputy Legislative Counsel, Legislative Counsel. Comments that those changes are acceptable.

187

Rep. Shetterly

Questions the language modifications between General Fund and State Lottery.

199

Hunt

Comments that the bill should reference Section 4 paragraph d, where the Lottery Fund is created in the Constitution.

211

Chair Westlund

Repeats conceptual language.

219

Rep. Butler

Requests clarification from LRO on the revenue chart. Questions the amounts transferred to stability fund would be from the lottery fund.

225

Warner

Responds that there is no interest earnings created in the fund. States that the interest earnings will be allocated as the endowment funds are currently allocated. Notes that the estimate in earnings reduction would be $19.4 million lower than endowment earnings.

236

Hunt

Provides conceptual language for the -6 amendments, page 1, line 22 delete colon and line 23 delete “(a)” and on page 2, line 1 delete semicolon and “and” and replace with period. Delete lines 2-3.

256

Rep. Shetterly

MOTION: Moves to ADOPT HJR 80 –5 amendments dated 6/14/02.

258

Chair Westlund

Hearing no objection, declares the motion CARRIED.

259

Rep. Shetterly

MOTION: Moves to ADOPT HJR 80 –6 amendments dated 6/14/02 and that the measure be FURTHER AMENDED on

Page 1, line 22, deleting colon, on line 23 delete “(a) and on page 2 line 1, delete semicolon and “and” insert a period, and delete lines 2-3, and on line 10 delete “$150” and insert “$180”.

271

Chair Westlund

Questions the blanks on page 2 lines 27 and 28.

276

Hunt

Responds that those blanks can be edited once LC 25 is printed.

290

Chair Westlund

Hearing no objection, declares the motion CARRIED.

294

Rep. Shetterly

MOTION: Moves the rules be suspended for the purpose of reconsidering the vote on HJR 80 -5 amendments dated 6/14/02.

300

Chair Westlund

Hearing no objection, declares the motion CARRIED.

302

Rep. Shetterly

Provides conceptual language to the -5 amendments. Line 2, delete the word “statute” and insert “law” and delete line 3.

308

Rep Shetterly

MOTION: Moves to ADOPT HJR 80 –5 amendments dated 6/14/02 and that the measure be FURTHER AMENDED on line 2, delete “statute” and insert “law” and delete line 3.

318

Rep. Hansen

Requests explanation for the language changes.

325

Greg Chaimov

Legislative Counsel, explains the proposed language is a broader definition and more consistent.

341

Rep. Shetterly

MOTION: Moves HJR 80 be sent to the floor with a DO PASS AS AMENDED with the -5 and -6 amendments recommendation.

VOTE: 7-0-0

352

Chair Westlund

Hearing no objection, declares the motion CARRIED.

REP. SHETTERLY will lead discussion on the floor.

360

Chair Westlund

Closes work session on HJR 80 and opens public hearing on HB 4052.

HB 4052 – PUBLIC HEARING

365

Chair Westlund

Determines no one wishes to testify on HB 4052. Closes the public hearing on HB 4052 and opens work session on HB 4052.

HB 4052 – WORK SESSION

368

Warner

LRO. Summarizes HB 4052. Clarifies the diversion of funds. Notes the -1 amendment (EXHIBIT L) is a reference amendment at the request of Legislative Counsel.

384

Rep. Shetterly

MOTION: Moves to ADOPT HB 4052 -1 amendments dated 6/13/02

396

Chair Westlund

Hearing no objection, declares the motion CARRIED.

397

Rep. Shetterly

MOTION: Moves HB 4052 be sent to the floor with a DO PASS AS AMENDED recommendation.

VOTE: 7-0-0

401

Chair Westlund

Hearing no objection, declares the motion CARRIED.

REP. SHETTERLY will lead discussion on the floor.

403

Chair Westlund

Closes work session on HB 4052 and opens public hearing on HB 4056.

HB 4056 – PUBLIC HEARING

408

Chair Westlund

Determines no one wishes to testify on HB 4056. Closes the public hearing on HB 4056 and opens work session on HB 4056.

HB 4056 – WORK SESSION

416

Rep. Shetterly

Requests staff from State Treasurer speak to the bill.

427

Kate Richardson

Oregon State Treasurer. States that HB 4056 is similar to SB 832 (2001).

445

Rep. Shetterly

Questions if the blank on page 3, line 35 is $180 million.

461

Richardson

Responds affirmatively.

TAPE 8, B

038

Yates

LRO. Comments that if HJR 80 is not passed by the voters, HB 4056 is a back-up measure to issue revenue bonds based on the Tobacco Master Settlement Agreement (MSA).

058

Rep. Butler

Questions if any of the monies being generated by the Tobacco Master Settlement Agreement been expended for backfill.

067

Yates

Responds that the revenue generated by the funds can not be accessed until 2004.

068

Chuck Smith

State Treasurer. Concurs.

070

Rep. Butler

Comments that $87 million that is being considered for backfill are utilizing existing resources.

075

Smith

Responds affirmatively. States that the first MSA revenues will be in the April 2004 payment.

085

Rep. Shetterly

References the conceptual amendments outlined in LRO memo and tobacco revenue table (EXHIBIT M).

116

Harrison Conley

Deputy Legislative Counsel, Legislative Counsel. States that the changes identified are acceptable.

129

Richardson

Comments Section 2, sub 3 (a) addresses capitalized interest.

136

Conley

Discusses the proposed language for Section 5 relating to the administrative fund. Notes support for the language.

144

Rep. Butler

MOTION: Moves to ADOPT LC 47 (HB 4056) conceptual amendments outlined in LRO memo dated 6/14/02 in the corresponding sections of HB 4056 and insert $180 in all appropriate locations.

165

Chair Westlund

Hearing no objection, declares the motion CARRIED.

172

Chair Westlund

MOTION: Moves HB 4056 be sent to the floor with a DO PASS AS CONCEPTUALLY AMENDED recommendation.

VOTE: 7-0-0

176

Chair Westlund

Hearing no objection, declares the motion CARRIED.

REP. SHETTERLY will lead discussion on the floor.

178

Chair Westlund

Recesses meeting at 7:45 p.m. Reconvenes meeting at 9:45 p.m. and opens public hearing on HB 4057.

HB 4057 - PUBLIC HEARING

193

Hasina Squires

Special Districts Association of Oregon. Comments on the companion bill in the Senate. Requests reviewing the compromise bill.

204

Michelle Deister

League of Oregon Cities (LOC). Comments on SB 1021 and states that this measure generates an increased savings to employers.

221

Anthony Bieda

Lane County Government. Asserts that Lane County has been addressing PERS for several years. Testifies and notes concerns with HB 4057.

239

Maria Keltner

Association of Oregon Counties (AOC). Testifies in opposition to     HB 4057.

270

Chair Westlund

Closes public hearing HB 4057 and opens work session on HB 4057.

HB 4057 - WORK SESSION

272

Yates

LRO. Summarizes HB 4057, requires Public Employees Retirement Board to establish mortality tables for each calendar year beginning January 1, 2003. Notes the need for amending page 2, lines 32-35.

305

Rep. Shetterly

Comments on the blank on page 2, line 34.

318

Yates

Questions the operative date for employer’s contributions, page 2, line 34.

322

Dave Heynderickx

Senior Deputy Counsel, Legislative Counsel. Defers to Steve Delaney. States that in order to have any current savings in this biennium, the contribution rate needs to be adjusted. Notes that the next scheduled rate adjustment is July 1, 2003.

335

Dallas Weyand

Legislative Analyst, LFO. States that the implementation can occur quickly. Assumes July 1, 2002.

353

Chair Westlund

Questions if committee members have a copy of the -1 amendment.

364

Rep. Butler

Questions if the PERS computer technology is capable of handling the annual mortality reports.

379

Steve Delaney

Legislative Liaison, PERS. Responds that the question addressed when PERS could change employer rates in factoring the change in mortality tables. States that PERS can react very quickly to this directive. Concurs that the implementation of multiple mortality tables will be an increased workload to PERS and will have a fiscal impact.

394

Rep. Butler

Questions the estimated fiscal impact.

399

Delaney

Responds that all three proposals have approximately the same impact. States that the impact is approximately $7.5 million and that includes FTE and initial expenses for the computer systems.

416

Rep. Shetterly

Refers to page 2 of the Fiscal Impact Statement, implementation costs to PERS (EXHIBIT N).

438

Brian DeLashmutt

Representing numerous organizations. States that the -1 amendments are technical (EXHIBIT O). Explains the language change mortality to actuarial equivalency. Comments on the deletion of Section 7 and that on page 2, line32 that 2003 be deleted and insert 2002.

488

Rep. Butler

Notes concerns in deleting Section 7. States that this language needs to be somewhere in HB 4057. Asserts that he is not supportive of moving forward without establishing clarity that no new contract rights are created.

TAPE 9, A

016

DeLashmutt

Responds that this language does not impact what is currently contractual rights. States that this measure establishes a system on addressing actuarial equivalence tables and to develop a continuous system.

020

Rep. Butler

Stresses that nothing occur in PERS that creates, modifies, changes or expands contract rights.

035

Chair Westlund

Closes work session on HB 4057 and opens public hearing on HB 4058.

HB 4058 – PUBLIC HEARING

037

Chair Westlund

Determines no one wishes to testify on HB 4058. Closes the public hearing on HB 4058 and opens work session on HB 4058.

HB 4058 – WORK SESSION

041

Meyer

LRO. Summarizes HB 4058, directs the Division of State Lands (DSL) to apportion to counties for distribution to school districts at least 5% of the Common School Fund from 2002-2005.

043

Rep. Shetterly

Comments that the Common School Fund is approximately $730 million as of January 1 and 5% is approximately $20 million. States that in extending this distribution until 2007 will assist in filling the gap in future biennium and create some distribution stability.

060

Rep. Schrader

Questions if enacted, the act sunset in 2007.

063

Rep. Shetterly

Responds affirmatively.

065

Rep. Shetterly

MOTION: Moves HB 4058 be sent to the floor with a DO PASS recommendation.

VOTE: 6-0-1

069

Chair Westlund

Hearing no objection, declares the motion CARRIED.

REP. SHETTERLY will lead discussion on the floor.

070

Chair Westlund

Closes work session on HB 4058 and opens public hearing on           HB 4054.

HB 4054 - PUBLIC HEARING

079

Joe Schweinhart

Associated Oregon Industries (AOI). Testifies in opposition to HB 4054. Recommends that Measure 88 be fully implemented.

095

J.L. Wilson

National Federation of Independent Business. Testifies in opposition to HB 4054. Supports fully implementing Measure 88.

108

Rep. Hansen

Questions if the business community has any suggestions for solving the state’s financial crisis.

116

Schweinhart

Responds no.

133

Wilson

Responds that the business community has suffered loss of employment and small business closures. States that once employment is increased the state’s revenue will rise.

141

Chair Westlund

Comments and discusses the phase-in outlined in HB 4054. 

158

Schweinhart

Responds and discusses that full implementation of Measure 88 would stimulate the economy.

169

Rep. Shetterly

Comments and explains that Oregon is moving towards a rebalance without implementing a general tax increase.

190

Chair Westlund

Acknowledges testimony. States that Oregon has maintained the state’s credit rating. Closes public hearing on HB 4054 and opens work session on HB 4054.

HB 4054 – WORK SESSION

214

Martin-Mahar

LFO. Summarizes HB 4054 and the –1 amendment (EXHIBIT P) and reviews the income tax table on the Fiscal Impact Statement (EXHIBIT Q).

237

Rep. Shetterly

MOTION: Moves to ADOPT HB 4054 -1 amendment dated 6/14/02.

240

Chair Westlund

Hearing no objection, declares the motion CARRIED.

251

Rep. Shetterly

MOTION: Moves HB 4054 to the floor with a DO PASS AS AMENDED recommendation.

VOTE: 6-0-1

254

Chair Westlund

Hearing no objections, declares the motion CARRIED.

REP. WESTLUND will lead discussion on the floor.

260

Chair Westlund

Closes work session on HB 4054. Requests staff research the status of HB 4059, ask that the committee stand at ease at 10:25 p.m.

275

Chair Westlund

Reconvenes at 10:40 p.m. and opens public hearing on HB 4051.

HB 4051 – PUBLIC HEARING

287

Chair Westlund

Determines no one wishes to testify on HB 4051. Closes public hearing on HB 4051 and opens work session on HB 4051.

HB 4051 - WORK SESSION

303

Yates

LRO. Summarizes and reviews the previously adopted –1, -2, and –3 amendments.

325

Rep. Johnson

Requests additional review of -1, -2 and -3 amendments.

327

Yates

Explains that and provides additional review.

365

Rep. Shetterly

Comments and questions the -8 amendment.

402

Yates

Responds that the -8 combines the -1, -2 and -3 amendments.

432

Chair Westlund

Recesses the committee at 10:55 p.m. Reconvenes the committee at 11:02 p.m.

441

Chair Westlund

Comments on the –8 amendments.

452

Rep. Butler

Summarizes the –9 amendments (EXHIBIT R), establishing a revenue neutral arrangement to the cities, counties and the Elderly and Disabled Special Transportation Fund.

477

Rep. Butler

MOTION: Moves to ADOPT HB 4051 -9 amendments dated 6/14/02.

480

Rep. Shetterly

Questions the revenue impact.

482

Yates

Responds that 2001-2003 biennium revenue appropriated to the health plan would be reduced by $1.7 million.

TAPE 10, A

007

Rep. Shetterly

Comments on revenue negotiations. Notes concerns and unintended consequences with agreements in existing revenue packages.

015

Chair Westlund

Acknowledges concerns.

024

Rep. Hansen

Comments in support of –9 amendments.

038

Chair Westlund

Hearing no objections, declares the motion CARRIED.

040

Rep. Butler

Summarizes the –11 amendments (EXHIBIT S), establishes the Oregon Health Care Fund. Notes that the monies in that fund would be distributed to the Oregon Health Plan and mental health services.

066

Rep. Johnson

Questions what mechanism allows for revenue distribution.

074

Rep. Butler

Responds that funds are currently available and would be transferred. States that the Legislature would determine the distribution of extra revenues.

102

Rep. Shetterly

Comments on the potential policy implications. Discuses concerns.

108

Chair Westlund

Questions the intent of the amendment.

118

Rep. Schrader

Clarifies that the monies are to be dedicated to health care, not exclusively the Oregon Health Plan. States that the scope of funding is being expanded.

122

Rep. Butler

Concurs. Further explains the legislative intent. States that creating a Health Care Fund would address the health care needs of Oregonians. Notes the importance of preventative care.

140

Rep. Shetterly

Clarifies that the amendment creates a new fund.

145

Rep. Butler

Responds affirmatively, Section 7 creates the Oregon Health Care Fund.

149

Rep. Shetterly

Repeats concerns regarding unintended consequences and impact to current policy.

160

Rep. Butler

Discusses the longevity of health care benefits, not just medical insurance benefits relating to the health plan.

172

Chair Westlund

Recommends developing -11 amendments in the Senate.

195

Rep. Shetterly

MOTION: Moves HB 4051 to the floor with a DO PASS AS    AMENDED recommendation.

200

Chair Westlund

Hearing no objections, declares the motion CARRIED.

REP. SCHRADER will lead discussion on the floor.

225

Chair Westlund

Recesses meeting at 11:20 p.m. Reconvenes meeting at 12:25 a.m. and opens work session for introduction of committee measures.

INTRODUCTION OF COMMITTEE MEASURE – WORK SESSION

234

Adrienne Sexton

Fiscal Analyst, LFO. Summarizes LC 25, establishes procedure for statewide special election for HJR 80 and HB 4051.

251

Rep. Shetterly

Questions the consequences if the governor vetoes this bill.

252

Ted Reutlinger

Senior Deputy Legislative Counsel, LC. Responds that there would be no statewide special election in September. Notes that this is an unresolved legal question. States that the bill is necessary to call the election and to appropriate the money to the Secretary of State’s office.

269

Chair Westlund

MOTION: Moves LC 25 BE INTRODUCED as a committee bill.

VOTE: 7-0-0

272

Chair Westlund

 Hearing no objection, declares the motion CARRIED.

NOTE: LC 25 introduces as HB 4059.

275

Chair Westlund

Closes work session and requests the committee stand at ease at 12:28 a.m. (June 15, 2002).

277

Chair Westlund

Reconvenes 12:32 a.m. and opens a public hearing on HB 5091.

HB 5091 – PUBLIC HEARING

280

Chair Westlund

Determines no one wishes to testify on HB 5091. Closes public hearing on HB 5091 and opens work session on HB 5091.

HB 5091 - WORK SESSION

306

Ken Rocco

Legislative Fiscal Officer, LFO. Summarizes the –2 amendments (EXHIBIT T). Reviews the conceptual changes resulting from the action taken on HB 4051 -9 amendments. Notes the amendment caused a $2.1 million reduction to the anticipated cigarette tax. Page 13, line 29 “General Fund” figure changed to $-200,080,503, page 14, line 6, “Federal Funds” changed to $-167,943,064, page 28, line 31, “Other Funds” $115,416,128, and page 29, line 4 “Other Funds” $113,282,749 and line 5 “Federal Funds” $167,537,155.

363

Chair Westlund

MOTION: Moves HB 5091 conceptual changes to the -2 amendments, dated 6/14/02.

VOTE: 7-0-0

367

Chair Westlund

Hearing no objection, declares the motion CARRIED.

375

Rep. Shetterly

MOTION: Moves HB 5091 –2 amendments, dated 6/14/02, as conceptually amended.

VOTE: 7-0-0

379

Chair Westlund

Hearing no objection, declares the motion CARRIED.

381

Rep. Shetterly

MOTION: Moves HB 5091 be sent to the floor with a DO PASS AS AMENDED recommendation.

367

Chair Westlund

Comments and contends that the legislative intent is to allow the university system to increase tuition above the 3% at the discretion of each university. Explains that the PERS bill will not be moved out of committee, thus the budget will be out of balance by $15 million.

437

 

VOTE: 6-1-0

AYE:  Butler, Johnson, Morgan, Schrader, Shetterly, Westlund

NAY:  Hansen

442

Chair Westlund

The motion CARRIES.

REP. WESTLUND will lead discussion on the floor.

447

Chair Westlund

Recesses meeting at 12:40 a.m. Reconvenes at 12:55

450

Chair Westlund

Reconvenes meeting at 12:55 a.m. and opens a public hearing on HB 4059.

HB 4059 – PUBLIC HEARING

455

Chair Westlund

Determines no one wishes to testify on HB 4059. Closes public hearing on HB 4059.

HB 4059 - WORK SESSION

459

Sexton

LFO. Summarizes HB 4059. Comments that an amendment is necessary and speaks to page 6, section 10 insert into the blank $1.5 million into the emergency fund.

TAPE 10, B

023

Chair Westlund

MOTION: Moves to ADOPT HB 4059 conceptual amendment in Section 10 to include $1.5 million from the General Fund be placed in the Emergency Fund for special purpose appropriation for election expenses to the Secretary of State.

VOTE: 7-0-0

030

Chair Westlund

Hearing no objection, declares the motion CARRIED.

031

Rep. Shetterly

MOTION: Moves HB 4059 to the floor with a DO PASS AS AMENDED recommendation.

035

Rep. Hansen

Questions why order a special election and not wait until the general election.

038

Chair Westlund

Responds that the special election will provide certainty for the school boards.

041

Rep. Shetterly

Adds there will be uncertainty with the cigarette dealers and wholesalers.

048

Rep. Hansen

Questions if July 1, 2002 were removed from HB 4059 would a special election still be necessary.

055

Rep. Shetterly

Responds that if the Senate passes the revenue bonds to underlie Measure 88 a special election would still be necessary.

066

 

VOTE: 7-0-0

067

Chair Westlund

Hearing no objection, declares the motion CARRIED.

REP. BUTLER will lead discussion on the floor.

070

Chair Westlund

Recesses meeting at 1:15 a.m.

NOTE: The committee did not reconvene.

Submitted By,                        Reviewed By,

 

 

 

Andrew Morris,                        Adrienne Sexton,

Committee Assistant                        Administrator

 

 

 

Sandy Thiele-Cirka,

Committee Assistant

 

EXHIBIT SUMMARY

 

A – LC 37-1, Draft, staff, 4 pp

B – LC 47, Draft, staff, 9 pp

C – LC 46, Draft, staff, 20 pp

D – LC 49, Draft, staff, 4 pp

E – SB 1022, -A3 amendments, staff, 1p

F – SB 1022, -A4 amendments, staff, 1 p

G – HB 4055, -1 amendment, staff, 1p

H – HB 4055, Tax Rate Schedule, staff, 1p

I – HJR 80, -5 amendments, staff, 1p

J – HJR 80, -6 amendments, staff, 2pp

K – HJR 80, Revenue Impact Statement, staff, 1p

L – HB 4052, -1 amendment, staff, 1p

M – HB 4056, DAS Memo dated 6/14/02, staff, 2pp

N – HB 4057, Fiscal Impact Statement, staff, 2pp

O – HB 4057, -1 amendment, DeLashmutt, 2pp

P – HB 4054, -1 amendment, staff, 9pp

Q – HB 4054, Fiscal Staff Measure Summary, staff, 1p

R – HB 4051, -9 amendments, Butler, 2pp

S – HB 4051, -11 amendments, Butler, 1p

T – HB 5091, -2 amendments, staff, 30 pp