SENATE COMMITTEE ON BUDGET SOLUTIONS

 

 

September 13, 2002   Hearing Room 357

Time: 4:30 p.m. Tapes 3-4 

 

MEMBERS PRESENT:            Sen. Lenn Hannon, Chair

Sen. Ken Messerle, Vice-Chair

Sen. Peter Courtney

Sen. Joan Dukes

Sen. Steve Harper

Senate President Gene Derfler

 

STAFF PRESENT:                  Richard Yates, Legislative Fiscal Office

                                                Dallas Weyland, Legislative Fiscal Office

                                                Ken Rocco, Legislative Fiscal Officer

Patrick Brennan, Administrative Support

 

MEASURE/ISSUES HEARD:            HB 4073-A Public Hearing and Work Session

                                                HB 4074-B Public Hearing and Work Session

                                                HB 5100-A Public Hearing and Work Session

 

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 3, A

004

Chair Hannon

Calls the meeting to order at 5:55 p.m.  Opens a public hearing on           HB 4073-A.

 

HB 4073-A PUBLIC HEARING

008

Richard Yates

Legislative Revenue Office.  Provides materials (EXHIBIT A) and a brief explanation of HB 4073-A.  States that the measure raises $400 million in revenues for the State School Fund through bonding.  Describes how the bonds will be sold off and how they are to be repaid.  Mentions that Treasury estimates that 77 percent of the Master Settlement revenue will be used to pay off the bonds.

044

Sen. Courtney

Asks if the corporation set up to administer the bonds will be similar to the State Accident Insurance Fund (SAIF).

050

Yates

Responds that the corporation is meant to be a public corporation, as opposed to a state agency, similar to the model used by other states for Master Settlement Agreement payment monies.

058

Chair Hannon

Asks how the bonds will be repaid if revenue decreases and the state is incapable of paying for them.

063

Yates

Explains that in such a situation the debt would belong to the corporation, rather than the state, adding that if the Master Settlement Agreement payments were stopped the bond holder will not be paid. Acknowledges that it might also take longer to pay off the bonds.

075

Sen. Courtney

Notes that the Oregon Supreme Court will determine the validity of the sections of the act in the event that of a challenge and asks whether such a challenge is anticipated.

083

Yates

Interprets the language to be designed to prevent a challenge to the system once it is already in place.

098

Kate Richardson

Oregon State Treasury.  Explains that the language in the measure is modeled after similar measures in other states, and is designed to provide a swift resolution in the event of a legal challenge.  Clarifies that such a challenge is not anticipated.

108

Sen. Courtney

Inquires whether such a challenge could be made on the basis of the funds being used in a way different than that for which the settlement was designed.

111

Richardson

Answers that there are no such restrictions, adding that the stipulation is meant to respond to a challenge by bondholders.

115

Sen. Courtney

Asks whether there is doubt about the constitutionality of the measure.

118

Richardson

Replies she is unsure.

122

Sen. Dukes

Notes that the measure calls for the $400 million to be directed into the State School Fund, from which they are subsequently retrieved for use in the General Fund. Asks whether the funds are moved in such a manner because of restrictions as to how the funds are to be used.

130

Yates

Clarifies that the funds should retain their exempt status so long as the word ‘grant’ remains.

147

Sen. Courtney

Asks again what sort of legal challenge could be made against the measure.

152

Harrison Conley

Legislative Counsel Office.  Explains that the language was taken from model legislation, and that the reference to the Supreme Court was included not because a particular challenge is anticipated, but because it was language borrowed from model legislation.

161

Sen. Dukes

Wonders who would have the right to take a challenge to the Supreme Court.

163

Conley

Replies that anyone with a constitutional problem with the measure could do so.

169

Sen. Dukes

Asks again whether there are any known constitutional problems with the measure.

170

Conley

Replies he is unaware of any such problems with HB 4073-A.

181

Chair Hannon

Closes the public hearing on HB 4073-A and opens a public hearing on HB 4074-B.

 

HB 4074-B PUBLIC HEARING

187

Dallas Weyland

Legislative Fiscal Office.  Distributes materials (EXHIBIT B) and reviews the provisions of HB 4074-B. 

238

Sen. Dukes

Requests an explanation as to why safety net clinic funds are to be redistributed, to areas besides Multnomah County.

250

Rep. Greg Smith

House District 59.  Explains that the measure reallocates money to rural clinics that are on the verge of closing due to lack of revenue. 

267

Sen. Dukes

Notes that the measure effectively cuts funding to clinics in urban areas in order to pay for clinics in rural areas.

271

Rep. G. Smith

Clarifies that the measure ensures distribution throughout the state.

277

Sen. Dukes

Concludes that clinics receiving federal funding will have their state funding reduced or eliminated.

283

Sen. Harper

Asks whether it was the intent of the measure to provide funding for clinics that do not receive federal funding.

296

Rep. G. Smith

Reiterates that the measure will help those clinics in danger of closing to remain open.

303

Sen. Dukes

Wonders how the measure might affect clinics in urban areas that had counted on state funding they will no longer receive.

305

Rep. G. Smith

Mentions that Governor Kitzhaber has been holding that funding back.

317

John Christensen

Staff for Sen. Margaret Carter. Testifies on Sen. Carter’s behalf in opposition to HB 4074-B.

325

Chair Hannon

Closes the public hearing on HB 4074-B and opens a public hearing on HB 5100-A.

 

HB 5100-A PUBLIC HEARING

333

Ken Rocco

Legislative Fiscal Officer.  Distributes materials (EXHIBIT C) and provides a brief explanation of the provisions of HB 5100-A.  Indicates that the measure outlines disappropriations for the Fifth Special Legislative Session.  Explains that the measure, in concordance with HB 4074-B and HB 4073-A, will effectively rebalance the budget.

379

Grattan Kerans

Director of Government Relations, Oregon University System.  Testifies in opposition to HB 5100-A (EXHIBIT D).  Describes the effect the measure would have on higher education in Oregon.

 

 

 

TAPE 4, A

015

Chair Hannon

Acknowledges that the measure implements additional reductions on higher education.

024

Mark Nelson

Association of Oregon Faculties, Oregon Head Start Association, Oregon Judges Association, Independent Living Centers.  Testifies that many of the organizations he represents are opposed to the reductions within HB 5100-A.  Mentions that Oregon Head Start Preschool would be forced to reduce the percentage of eligible children served from 50 percent to 42 percent.  Asserts that Head Start is the foundation for education in Oregon and should therefore be restored and protected.

043

Bill Lippman

Oregon Judges Association.  Testifies in opposition to the cuts outlined in HB 5100-A.  Recalls previous cuts made during earlier special sessions, the effects of which have been moderated somewhat due to drops in caseloads.  Indicates that the Indigent Defense Fund will run out of money in April, resulting in significant effects throughout the criminal justice system.

070

Nelson

Notes that the independent living centers are also on the list of services being cut.

088

Sen. Dukes

Asks about funding shifts related to the National Marine Fisheries Service (NMFS).

090

Rocco

Replies that provision is not included in the A-engrossed version of HB 5100. Explains which items are included.  Explains how spending has shifted to account for NMFS.

107

Vice-Chair Messerle

Closes the public hearing on HB 5100-A and opens a work session on HB 4074-B.

 

HB 4074-B WORK SESSION

100

President Derfler

MOTION:  Moves HB 4074-B to the floor with a DO PASS recommendation.

114

Sen. Dukes

Expresses opposition to the motion.

127

Sen. Courtney

Indicates he will also vote no on the motion.  Says that while he has supported budget cut measures he cannot support the level of cuts in HB 5100-A.

133

 

VOTE:  3-2-1

AYE:               3 – Derfler, Harper, Messerle

NAY:               2 - Courtney, Dukes

EXCUSED:     1 – Hannon

 

Vice-Chair Messerle

The motion CARRIES.

136

Vice-Chair Messerle

Closes the work session on HB 4074-B and opens a work session on HB 5100-A.

 

HB 5100-A WORK SESSION

142

President Derfler

MOTION:  Moves HB 5100-A to the floor with a DO PASS recommendation.

146

Rocco

Submits a budget note (EXHIBIT E) for HB 5100-A.

172

Sen. Dukes

Asks who drafted the budget note.

175

Rocco

Explains that the budget note was developed earlier in the day in concordance with several measures.

179

Sen. Dukes

Wonders why some agencies are allowed access to Emergency Board funds through the budget note while others are not.  Notes that there was no opportunity for public testimony on the budget note.  Expresses opposition to the budget note.

195

Vice-Chair Messerle

Notes Sen. Dukes’ opposition to the insertion of the budget note.

207

 

VOTE:  3-2-1

AYE:               3 – Derfler, Harper, Messerle

NAY:               2 - Courtney, Dukes

EXCUSED:     1 – Hannon

 

Vice-Chair Messerle

The motion CARRIES.

209

Vice-Chair Messerle

Closes the work session on HB 5100-A and opens a work session on HB 4073-A.

 

HB 4073-A WORK SESSION

218

Vice-Chair Messerle

Declares the meeting to be in recess.

 

 

 

-------------------------------------------------------RECESS-------------------------------------------------------------

 

 

 

222

Vice-Chair Messerle

Reconvenes the meeting at 6:48 p.m.

224

President Derfler

MOTION:  Moves HB 4073-A to the floor with a DO PASS recommendation.

227

Sen. Dukes

Asks if there are restrictions as to how the money may be used.

233

Yates

Clarifies there are no legal strings attached to the money, which currently goes into the General Fund.

239

Sen. Dukes

Asks where the money is taken from if it is redirected.

244

Rocco

Explains that the Master Settlement Payment funds are kept separate from the General Fund but are allocated in a similar manner.

259

 

VOTE:  3-2-1

AYE:               3 – Derfler, Harper, Messerle

NAY:               2 - Courtney, Dukes

EXCUSED:     1 – Hannon

 

Vice-Chair Messerle

The motion CARRIES.

270

Vice-Chair Messerle

Adjourns the meeting at 6:53 p.m.

 

Submitted By,                        Reviewed By,

 

 

 

Patrick Brennan,                        Marjorie Taylor,

Administrative Support                        Administrator

 

EXHIBIT SUMMARY

 

A – HB 4073-A, materials, staff, 16 pp.

B – HB 4074-B, materials, staff, 5 pp.

C – HB 5100-A, materials, staff, 39 pp.

D – HB 5100-A, testimony, Grattan Kerans, 1 p.

E – HB 5100-A, budget note, staff, 1 p.