HOUSE COMMITTEE ON

AGRICULTURE AND NATURAL RESOURCES

 

 

January 26, 2005   Hearing Room C

9:00 AM     Tapes  7 - 9

 

MEMBERS PRESENT:            Rep. Patti Smith, Chair

Rep. Brian Boquist, Vice-Chair

Rep. Arnie Roblan, Vice-Chair

Rep. Terry Beyer

Rep. Chuck Burley

Rep. Mark Hass

Rep. Mac Sumner

 

STAFF PRESENT:                  Patrick Brennan, Committee Administrator

Jania Zeeb, Committee Assistant

 

 

MEASURES/ISSUES HEARD AND WITNESSES:

                                                HB 2327—Public Hearing and Work Session

                                                            Rep. Susan Morgan

                                                            Sen. Roger Beyer

                                                            Charlie Stone, Department of Forestry

                                                            Ray Wilkeson, Oregon Forest Industrial Council

                                                            Mike Gaudern, Oregon Small Woodlands Association

                                                            Barte Starker, Starker Forests

                                                            Greg Addington, Oregon Farm Bureau

                                                            Bill Kluting, Western Council of Industrial Workers

                                                HB 2122—Public Hearing and Work Session

                                                            Clark Seely, Oregon Department of Forestry

                                                            Hal Salwasser, University of Oregon

 

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

003

Chair Smith

Calls the meeting to order at 9:00 a.m. and opens a public hearing on HB 2327. 

HB 2327-PUBLIC HEARING

015

Patrick Brennan

Committee Administrator.  Summarizes HB 2327.

020

Rep. Susan Morgan

House District 2.  Explains her interest in HB 2327 and discusses the need for the bill. 

055

Rep. Morgan

Lists the members of the Budget Note Three Work Group, and explains what the group did.

079

Rep. Morgan

Submits and presents written testimony on the principals that the work group came up with (EXHIBIT A).

104

Rep. Morgan

Explains self-insurance programs.  Gives the reason the state can not currently afford to participate in a self-insurance program, but expresses that it is important for the state to begin moving in that direction.

114

Rep. Morgan

States that the biggest drain on the General Fund in terms of fire protection is catastrophic fires.  Emphasizes the importance of preventing fires from starting or keep them from getting large.

134

Rep. Morgan

Explains the concept behind severity funding and describes the efficiency of using severity funding.

162

Rep. Morgan

States that the General Fund is the payer of last resort and severity funding is important to lower the risk to the general fund.

174

Rep. Morgan

References the fire season in 2002 as evidence that large fires overwhelm the system.

191

Rep. Morgan

Notes the issue of balancing funding between landowners and the state. 

204

Rep. Morgan

States that 60 percent of the costs for fire protection are borne by the landowners and about 40 percent of the costs are provided from the state’s General Fund.

227

Rep. Morgan

Remarks that the consensus of the work group was to try to move closer to a 50-50 responsibility between landowners and the General Fund.  States that while this cannot be fully implemented now, passage of HB 2327 would be a small step in that direction.

235

Rep. Morgan

Explains the process HB 2327 needs to go through.  States that the committee needs to consider the policy issues and references the -1 amendments (EXHIBIT B).

277

Rep. Hass

Inquires which landowners would be affected by HB 2327.

285

Charlie Stone

Fire Projects Program Director, Department of Forestry (ODF).  Requests clarification of Rep. Hass’ question. 

287

Rep. Hass

Reads a section from (EXHIBIT A) to clarify his question.

289

Rep. Morgan

States that the section Rep. Hass read was a reference to an issue in Eastern Oregon with private timberland. 

307

Stone

Clarifies Rep. Morgan’s statement by adding numbers and offering more explanation of the issue.

354

Senator Roger Beyer

Senate District 9.  States why he is interested in HB 2327.

381

Sen. Beyer

Describes the history of fire funding in Oregon (EXHIBIT C)

394

Sen. Beyer

Expands on and explains surcharges, and refers to page ten    (EXHIBIT C).

TAPE 8, A

021

Sen. Beyer

Explains the problem with fire funding that arises as a result of fires crossing property lines.  States that this is why the surcharges are there. 

031

Sen. Beyer

Explains how HB 2327 addresses surcharges.  Recommends that the surcharge should come into affect when the Oregon Forest Land Protection Fund (OFLPF) reserve base is below $22.5 million. 

057

Rep. Roblan

Inquires when the fund that we are talking about begins paying out, is it before or after we use the insurance.

065

Stone

Answers that the fund is the first source for emergency fire costs after the district budget and before insurance. 

077

Rep. Roblan

States that this is a reserve fund that protects the general fund.

080

Rep. Morgan

Responds that the reserve fund is a side fund that will help bridge the gap between the landowners fund the insurance policy. 

087

Stone

States that there could be terminology problems. 

090

Rep. Morgan

Mentions that the funding mechanisms for fighting fires in the state is extremely complicated. 

096

Rep. Roblan

Notes that it has worked because there is quick response to fire and the funding is worked out later.  

103

Sen. Beyer

Expands on Rep. Roblan’s statement. 

108

Stone

Mentions that for the fire seasons of 2001 and 2002 the state is still paying the districts from the fund.

118

Stone

Submits and presents written testimony (EXHIBIT D).

143

Stone

Explains the consequence of not passing HB 2327.

161

Stone

Offers a brief overview of each section of HB 2327.

193

Stone

Explains section 2 of the measure.

227

Stone

States that the funding is for helping rural fire districts (RFDs) that have a difficult time funding fire protections.  States the department is looking for an alternate method of funding the program.

244

Stone

Discusses the contingency fund.  Continues reviewing the measure section by section. 

293

Chair Smith

Inquires what section deals with coordinated cooperation. 

295

Stone

Provides the requested reference.  Continues reviewing the measure section by section. 

297

Stone

Explains Section 6. 

324

Stone

Explains section 8 and 9.

341

Stone

Discusses section 10.

371

Stone

Reviews Section 12.

406

Stone

Expands on Section 14. 

TAPE 7, B

019

Stone

States that Section 16 deals with the requirement to purchase insurance.

043

Rep. Beyer

Inquires if there is a risk of being unable to get insurance in the future if the state does not maintain continuous coverage. 

048

Stone

Responds that there could be.  States that Oregon is the only jurisdiction in the world with this type of insurance policy. 

062

Rep. Boquist

Inquires about the underwriter pool for the insurance.

064

Stone

Responds that the insurance is property insurance with Lloyds of London as the primary underwriter. 

070

Rep. Sumner

Inquires how private property owners pay money into the fund, is it through property taxes.

073

Stone

Responds that he partially correct.  Explains that association members pay money to the association, but in most cases the county assessor adds it to their property taxes.

092

Stone

Reviews section 17 of HB 2327

113

Chair

Inquires whether the $900,000 appropriation in HB 2327 is sufficient or if it will need to changed by the time it gets to Ways and Means Committee.

114

Rep. Morgan

Responds that the number will need to be finalized before the bill can come out of Ways and Means.

116

Rep. Roblan

Inquires what the limit of the policy is in terms of coverate.

118

Stone

Responds that policy has a $25 million deductible and another $25 million in coverage.

134

Stone

States that Section 18 repeals 2 sections from HB 2301.

139

Stone

Expands on Section 19.

151

Stone

States that the emergency clause is so that the DOF can purchase insurance

160

Stone

Explains the -1 amendments (EXHIBIT B).

226

Stone

Urges the committee to adopt the -1 amendments and move the measure to the Ways and Means Committee.

232

Stone

Comments on the fiscal impact statement.

250

Rep. Roblan

Requests clarification on the fiscal impact statement.

251

Stone

Responds that Rep. Roblan is correct.

261

Chair Smith

Inquires if the changes he wants in the fiscal impact statement can be made in Ways and Means.

263

Rep. Morgan

Responds that they will go talk to the analyst to work through the mistake prior to sending the measure to Ways and Means.

266

Stone

Responds that it should be easily corrected.

267

Rep. Burley

States that he understands that the rate is 18 to the $22.5 million and then it is 16.5 until the fund reaches $30 million.

275

Rep. Roblan

States that the change to have the fee begin again at $2.5 million is not in the measure.

282

Stone

Responds that Rep. Roblan is correct.

289

Chair Smith

Inquires if they can address the money in Ways and Means.

292

Rep. Morgan

Responds that it will be discussed in Ways and Means and that the committee could make a recommendation that they look at the issue.

328

Ray Wilkeson

Oregon Forest Industries Council.  Testifies in support of HB 2327, (EXHIBIT E).

376

Mike Gaudern

Executive Director of Oregon Small Woodlands.  Testifies in support of HB 2327.  States that good firefighting program is important to landowners.  Discusses the importance of the generational change that is going to happen soon.  Asserts that passing HB 2327 would send a message to landowners that the state will help with fire fighting.

TAPE 8, B

020

Rep. Burley

Solicits opinions about Sen. Beyer’s recommendation.

023

Wilkeson

States that he thinks that it would work.

031

Rep. Beyer

Inquires if it would be more confusing to the landowners if the charge kicked in at $30 million or if it was at $22 million.

035

Wilkeson

Responds that it is a good question, and that either place is a good solution.

050

Barte Starker

Starker Forest.  Testifies in support of HB 2327.  Comments on his family history in forestry and why he is interested in the issue. 

085

Starker

Explains that, from his experience, fire protection is the prerequisite to forestry investment. 

110

Starker

Urges the committee to move HB 2327 forward. 

117

Greg Addington

Oregon Farm Bureau (OFB).  Testifies in support of HB 2327.

141

Bill Kluting

Western Counsel of Industrial Workers.  States that Oregon cannot afford not to have fire protection and therefore lose jobs.

155

Chair Smith

Closes the informational meeting on HB 2327 and opens a work session on HB 2327.

HB 2327-WORK SESSION

157

Rep. Boquist

MOTION:  Moves to ADOPT HB 2327-1 amendments dated 1/19/05.

172

 

VOTE:  7-0-0

 

Chair Smith

Hearing no objection, declares the motion CARRIED.

174

Rep. Boquist

MOTION:  Moves HB 2327 to the floor with a DO PASS AS AMENDED recommendation and BE REFERRED to the committee on Ways and Means by prior reference.

175

Rep. Burley

Inquires if there is going to be a recommendation to Ways and Means that they look at the issue of the fees kicking in at $22.5 million rather than at $30 million.

176

Chair Smith

States that she thinks it would be a good idea but that it needs to be discussed as a potential committee action.

177

Rep. Roblan

States that it is important that the committee express to the Ways and Means Committee the importance of looking into the issue.  States that he thinks it is reasonable to wait until the OFLPF reserve base drops below $22.5 million to make the taxes kick back in.

187

Chair Smith

Inquires if there is any objection to having Ways and Means consider the issue.

190

Rep. Beyer

Asks for clarification in dealing with the  $22.5 million after it gets to the $30 million.

194

Rep. Roblan

Clarifies that when the reserve base reaches $30 million then the assessment would not kick back in until the reserve base drops below the $22.5 million threshold.

209

Rep. Boquist

Expresses that speed is important in regards to getting the insurance through Lloyds of London.

232

 

VOTE:  7-0-0

AYE:            In a roll call vote, all members present vote Aye.

 

Chair Smith

The motion CARRIES.

235

Rep. Burley

MOTION:  Moves that the Committee Recommend to the Committee on Ways and Means that they consider amending HB 2327 so that in cases where the OFLPF reserve base rises above $30 million, landowner assessments will not be assessed again until the reserve base drops below $22.5 million.

237

Rep. Roblan

Inquires if part of the recommendation that they would not reintroduce the tax until the fund gets below $22.5 million.

240

Rep. Burley

Responds that Rep. Roblan is correct.

241

 

VOTE:  7-0-0

 

Chair Smith

Hearing no objection, declares the motion CARRIED.

242

Chair Smith

Closes the work session on HB 2327 and opens a public hearing on HB 2122.

HB 2122-PUBLIC HEARING

256

Brennan

Summarizes HB 2122.

290

Clark Seely

Associate State Forester, ODF.  Testifies in support of HB 2122 (EXHIBIT F).   Explains what HB 2122 does and how it affects the Department of Forestry. 

330

Seely

Expands on line 14 of HB 2122.

352

Hal Salwasser

Dean, College of Forestry Oregon State University (OSU).  Presents written testimony (EXHIBIT G) in support of HB 2122.

400

Salwasser

Testifies in support of HB 2122 in principal.

415

Ray Wilkeson

Oregon Forest Industries Council.  Testifies in support of the programs in HB 2122(EXHIBIT E)

TAPE 9, A

020

Chair Smith

Inquires if the final decisions on the money will be discussed once the measure reaches the Revenue Comittee.

021

Wilkeson

States that HB 2122 needs to go to Ways and Means.

035

Chair Smith

Closes the informational meeting on HB 2122 and opens the work session on HB 2122.

HB 2122-WORK SESSION

039

Rep. Roblan

MOTION:  Moves HB 2122 to the floor with a DO PASS recommendation and BE REFERRED to the Committee on Revenue by prior refrence.

043

Rep. Burley

Notes that one of the deletions on life 14 should not have been made.

046

Rep. Boquist

States that he and Rep. Hass are on the Revenue Committee and can make sure the mistake can be corrected.

050

 

VOTE:  6-0-1

AYE:            In a roll call vote, all members present vote Aye.

EXCUSED:  1 - Beyer

 

Chair Smith

The motion CARRIES.

064

Chair Smith

Closes the work session on HB 2122 and adjourns the meeting at 10:56 a.m.

 

 

EXHIBIT SUMMARY

 

  1. HB 2327, prepared material, Rep. Susan Morgan, 2 pp
  2. HB 2327, -1 amendments, staff, 2 pp
  3. HB 2327, prepared material, Sen. Roger Beyer, 10 pp
  4. HB 2327, written testimony, Charlie Stone, 15 pp
  5. HB 2327, written testimony, Ray Wilkeson, 2 pp
  6. HB 2122, written testimony, Clark Seely, 2 pp
  7. HB 2122, written testimony, Hal Salwasser 2 pp