HOUSE COMMITTEE ON

BUSINESS, LABOR, AND CONSUMER AFFAIRS

 

 

January 14, 2005   Hearing Room B

8:30 AM    Tapes  1 – 3

       Corrected 10/7/2005

 

MEMBERS PRESENT:            Rep. Alan Brown, Chair

Rep. Sal Esquivel, Vice-Chair

Rep. Mike Schaufler, Vice-Chair

Rep. Paul Holvey

Rep. George Gilman

Rep. Derrick Kitts

Rep. Chip Shields

 

 

STAFF PRESENT:                  Janet Adkins, Committee Administrator

Katie Howard, Committee Assistant

 

 

ISSUES HEARD AND WITNESSES: 

                                                Adoption of Committee Rules - Organizational Meeting

                                                Introduction of Members and Staff - Organizational Meeting

                                                Department of Business and Consumer Services - Informational Meeting

                                                     Cory Streisinger

                                                Building Codes Division Overview - Informational Meeting

                         Mark Long

                        Employment Department - Informational Meeting

                         Debbie Lincoln

                                                      Tom Byerley

 

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 1, A

004

Chair Brown

Calls the organizational meeting to order at 8:31 a.m.

ADOPTION OF COMMITTEE RULES – ORGANIZATIONAL MEETING

014

Rep. Schaufler

MOTION:  Moves to ADOPT the proposed Committee Rules (EXHIBIT A).

015

 

VOTE:  5-0-2

EXCUSED:  2 – Gilman, Kitts

 

Chair Brown

Hearing no objection, declares the motion CARRIED.

INTRODUCTION OF MEMBERS AND STAFF – ORGANIZATIONAL MEETING

017

Rep. Shields

Represents House District 43. Interests lie in workforce development issues.

020

Rep. Schaufler

Represents House District 48. Wants to attract investment, create jobs, and increase revenue.

023

Rep. Esquivel

Represents House District 6. Explains he has been a small business owner all his life. Has issues with consumer protection.

030

Rep. Holvey

Represents House District 8. Expresses that he looks forward to helping create jobs in Oregon

036

Rep. Gilman

Represents House District 55. Wants to perpetuate good economic development in Oregon and keep current momentum of economy going.

043

Rep. Kitts

Represents House District 30. Says it is good to be back on committee.

048

Chair Brown

Invites staff introductions.

051

Chair Brown

Indicates that meetings will start promptly at 8:30 in the morning and as session goes on meetings may start at 8:00 a.m. Discusses procedural issues. Closes organizational meeting and opens the informational meeting.

DEPARTMENT OF CONSUMER & BUSINESS SERVICES - INFORMATIONAL MEETING

099

Cory Streisinger

Director, Department. of Consumer and Business Services. Submits (EXHIBIT B). Recites department’s mission statement. Begins an overview of the department starting with Oregon Occupational Safety and Health Division (OR-OSHA) and Workers’ Compensation. Explains that Oregon has had a declining or flat workers’ compensation rates for fifteen years. Details that recent projects including a Core Rules’ manual aimed at small businesses. Details the Management Labor Advisory Committee’s (MLAC) three major proposals involving: vocational rehabilitation and return to work program, changes in standards for determining and rescinding total disability status, and independent medical exams. Explains basic enforcement of legislation from last session, which limits insurance companies from using credit scoring. Highlights that complaints to the department in this regard have dropped off considerably. Explains that new areas of concern are home owner insurance using claim history and the affordability of insurance in hard market areas.

260

Streisinger

Talks about Finance and Corporate Securities. Explains that division oversees state chartered financial institutions, state security laws and other financially-oriented companies. Details that during the interim, department took a look at payday lending programs and gathered data about these programs. Explains that payday lending growth has been substantial in Oregon. Notes that department will putting out new bills in this area. Indicates that department is increasing consumer education about payday lending and is encouraging credit unions to offer programs similar to payday lending. Mentions smaller programs that department offers such as the Oregon Medical Insurance Pool (OMIP). Explains that OMIP is for Oregonians who need coverage but do not have other options due to sickness and other circumstances. Explains that OMIP has market based premiums and then is subsidized by health insurers at large. Mentions Office of Minority, Women, and Emerging Small Businesses and the Office of Regulatory Streamlining. (EXHIBIT B).

352

Chair Brown

Asks about the high cost of liability insurance for contracts and if the market assist ability program applies to it.

360

Streisinger

Affirms that it does. Found that contractors did not have adequate information and pay more than market prices, or they were having to devote a lot of time to find someone who can provide insurance. Explains program will match companies and contractors.

378

Chair Brown

Inquires if it is difficult for contractors to get insurance at any price.

382

Streisinger

Affirms that it is. Explains that those involved with multifamily housing are having the most difficulty. Describes lawsuits involving certain building products. Indicates that these lawsuits make it difficult for contractors who have used products that have been involved in the lawsuits to find insurance.

407

Rep. Gilman

Asks if they are doing any work on the problems of limited coverage for contractors’ liability insurance.

TAPE 2, A

001

Streisinger

Responds that they have regulatory authority over what those policies can and cannot include. Have heard that policies exclude more than they include. Affirms that they have been working with potential carriers to discover whether they will enter the market and provide better coverage. 

BUILDING CODES DIVISION OVERVIEW – INFORMATIONAL MEETING

022

Mark Long

Administrator, Building Codes Division. Explains that division adopts statewide building codes, issues trade licenses, certifies building inspectors and enforces permits and licenses. Indicates that one hundred million dollars was spent on building permits money in Oregon. Points out that the net impact of construction on state is five billion dollars. Explains that there are seven advisory boards appointed by the governor to help set standards. Refers to map on page two (EXHIBIT C).  Explains complicated, confusing “patchwork quilt” of services.  Indicates that division is a stake-holder driven organization and works with 18 groups to set policy with boards. Refers to list on page three. Explains that Construction Industry Policy Advisory Committee (CIPAC) consists of all 18 groups and that it meets on a quarterly basis in interim and more regularly during session. Explains that CIPAC takes legislation to this committee before bringing it before the legislature. Addresses issues of statewide consistency and adopting standards that make sense. Discusses regulatory streamlining and House Bill 2717 from 2003 to address regulations of advanced technological devices. Explains changes in regulation of inspectors. Expresses desire for inspectors to know standards, have adequate training, and provide the code number, to the customer, of any correction the inspector makes. Discusses consolidated license types and E-pay system. Describes website where customers can renew license and pay with credit card.  (EXHIBIT C)

198

Long

Says an agenda exists that involves more license streamlining. Talks about House Bill 2181. Indicates that a bill may be introduced that looks at various types of elevators and regulates certain types differently. Discusses another bill addressing new technology and different industries. Talks about implementation of public/private partnerships. Details one partnerships called Permits Protect. Explains division has worked with private industry to raise money to run ad campaigns to provide information about permits to the public. Discusses another private/public partnership involving an enforcement program with electricians in the Mid-Willamette Valley area. Explains that program helps fund a compliance officer that is available after-hours or on the weekend. Talks about Senate Bill 715 from last session. Explains regulatory streamlining and chart to explain it is on back page. Indicates that One-Stop Electronic Permitting System Pilot Project goes into effect in April and that pilot is with certain local governments. Explains that the pilot will allow customers to apply, pay, and receive some types of permits online in the metro area. Relates that telling people what jurisdiction their project was in was the most difficult part.  (EXHIBIT C)

310

Rep. Esquivel

Asks if redlined building permit applications have to be accompanied by the ordinance or statute that is causing the redlining.

319

Long

Responds on July 1, 2005, they will have to be.

322

Rep. Esquivel

Likes the idea of the same criteria being used statewide. Applauds process. Asks how many people Mr. Long has on staff and how much he charges entities to do inspections.

338

Long

Explains that he serves the people in the area that are shaded. See (EXHIBIT C), page two. Fees are set by the legislature. From his perspective, costs go up as he provides services to less populated areas. Explains low fee rates. Cannot say specifically (EXHIBIT C).

364

Rep. Esquivel

Asks if division has looked at doing contractual agreements with multiple counties, such as Lake and Klamath, so that they would be charged accordingly.

374

Long

Indicates that areas are typically less profitable to operate and that it is hard to work with local and private companies. States that inspectors average three to five thousand windshield miles a year. Explains that division receives assistance on a statewide basis to maintain services, because division cannot maintain profitability.

400

Rep. Esquivel

Asks what kind of permits can be applied for online.

410

Long

Explains that it is for permits where you do not have to provide plans.

TAPE 1, B

001

Long

Expresses that, in future, the division would like to have all plans submitted online so that the entire permit process is paperless. Indicates that, to implement this next phase, the division needs ten to 15 million dollars.

020

Rep. Schaufler

Asks how long it would take to implement the plan if division had the money.

030

Long

Indicates that it would take three to five years. Clarifies that developing the local and state relationships takes awhile, and it also is contingent on getting the software put together.

040

Rep. Schaufler

Inquires where the bill on wheel chair access and building design is.

043

Long

Explains that bill is in a different agency.

046

Rep. Schaufler

Emphasizes that as Oregon modernizes, he does not want to replace the pocket watch, in reference to an early example given by Mr. Long.

053

Rep. Holvey

Asks whether state agency has any liability for ensuring compliance to the code in properly permitted projects.

059

Long

Explains that the people running the project have accountability to the division with the new standard. Describes the state standard as a mini-maxi where projects cannot go above or below the standard. Indicates that, if there is a correction, a person has to follow state standard, and if an individual does not, he/she is subject to action by the department.

080

Rep. Holvey

Expresses concern about an inspector signing off on a project as being in compliance when in fact it is not and the consumer being left with paying for the mistake.

089

Long

Identifies the Constructors’ Board Commission as the place where these issues are resolved. Reiterates that the division has better standards for inspectors now. Concedes that, at some point, it gets into the legal system.

EMPLOYMENT DEPARTMENT – INFORMATIONAL MEETING

110

Debbie Lincoln

Director, Employment Department. Explains that they will hit high points of exhibit and will emphasize Unemployment Insurance (UI). References mission statement on page one. States that fulfilling first part of mission statement means insuring communities, individuals, and the workforce. Explains second part is business employment services. Indicates that this involves referring qualified individuals to companies. Explains that third part is workforce and economic research (EXHIBIT D).

155

Lincoln

Explains that the fourth element is Childcare Division. Refers to organization chart in packet on page two and provides explanation. Refers to pages four and five. Explains the following changes in the services the Employment Department provides: greater consistency, better costumer service, and more efficiency. Emphasizes workforce and economic development. Explains the reauthorization of Workforce Investment Act in congress. Act was passed in 1998. Relates that it has not been reauthorized, but is on the fast track in congress, and that these changes will affect how the Oregon Employment Department does business. Describes how federal revenues have been diminishing for a number of years. Indicates that department started planning for that before it is in crisis mode (EXHIBIT D).

262

Lincoln

Explains how technological advances help with much of the process-oriented activities, particularly in UI. Conveys how the department investigated call centers and decided to move to telephone and internet interaction. Illustrates how this improved standards and created consistency.  Explains how they operate with 100 fewer FTE staff.  Indicates that the project came in under-budget and on-time. Conveys that the response from clients has been positive. Explains that keeping field offices open helps department serve community by knowing what local business climate is like and what is going on in the community. Mentions I Match Skills, an online database where employers can match workers on skills rather than on job file. Reports that employers appreciate having it available. Refers to note on the bottom of page 5. Summarizes the cost-benefit of changes and that department will save $3.6 million per biennium in administrative costs. Explains that the department reinvested 50 FTE of the 100 FTE eliminated in UI in Employment Services. (EXHIBIT D)

370

Lincoln

Mentions the Economic Research Division. Explains that the division brings information about specific communities. Articulates how special surveys and studies help policy makers make informed decisions. Talks about how the department manage all federal money that comes into the state for childcare and transfer it to subsidized childcare grants that the Department of Humans Services manages. Mentions Office of Administrative Hearings. Goes over high points of Unemployment Insurance (EXHIBIT D).

TAPE 2, B

001

Lincoln

Explains the types of taxes for UI and how they are dealt with at the federal level. Emphasizes that the state must conform to federal rules and regulations to ensure that Oregon employers do not have to pay federal sanctions. Explains eligibility requirements and how benefits are determined and paid. Provides details about the exclusions that the state can adopt. Refers to page 12. Mentions Federal and State Unemployment Tax and its distribution method. Notes that the State Tax Account is controlled by Oregon statutes. Discusses different budgets on page 13 and the way in which money is distributed. Talks about what happens when a state’s trust fund goes insolvent (EXHIBIT D).

111

Lincoln

Mentions the REED Act and possibility of payouts back to the state from these monies. Explains that only three or four distributions have occurred in the last fifty years. Recalls the last REED Act payout was 98 million dollars several years ago and that part of it was used to pay for budget shortfalls and the rest was put into the Trust Fund. Refers to page 14 and talks about the tax schedule for Trust Fund (EXHIBIT D).

159

Chair Brown

Inquires whether the Oregon Legislature sets the schedule every two years.

161

Lincoln

Explains that it is in statute. Expresses that the department wants to change the tax schedule during this legislative session. Refers to the State Unemployment Tax Fund graph on page 15 and explains the benchmark. Mentions House Bill 2127 and that passing it would put department in a better fiscal situation by lowering the benchmark. Explains that it would reduces business taxes by 12 percent and help attract businesses to Oregon. Refers to page 16. Talks about base rates for new employers and how they would be lowered. Predicts that there would be a 17 or 18 million dollar savings for new business over three years. Indicates that this would bring new business to Oregon much in the same way Idaho did last year. Wants to look at the taxable wage base. Explains that the first 27,000 of payroll is the taxable wage base. Details how companies would save 10 million dollars by rounding the projected wage base to the nearest hundred dollar figure rather than the nearest thousand dollar figure (EXHIBIT D).

270

Rep. Schaufler

Refers to adjustment in House Bill 2127 and asks if the companies will pay less taxes if the taxable wage base is raised..

284

Lincoln

Explains that companies will still save money. Admits that over 20 years changing the adjustment is “a wash” but in the near future it will save money. Refers to page 18 and talks about the statistics of unemployment insurance in different counties (EXHIBIT D).

308

Rep. Esquivel

Asks if the statistics are just for one year. Mentions that it is a little ambiguous.

315

Lincoln

Affirms that it is just for one year. Indicates that department can give Rep. Esquivel information for all five years. Explains that chart is just a snapshot of how UI has kept communities solvent through recessions. Talks about the Supplemental Employment Department Administrative Fund. Explains that it is the only state controlled money that the state gets. Refers to page 17 and HB 2127, which would get rid of the Benefit Reserve Fund. Discloses that the fund is not financially sound and that the fund is losing one million a year, because the state invests it in its treasury and not the federal treasury. Explains that since it is invested in short term securities, the state would lose money if state had to dip into it (EXHIBIT D).

TAPE 3, A

003

Rep. Schaufler

Asks what the federal government is doing to get a better interest rate.

005

Lincoln

Explains that she does not know. Indicates that it may be because the federal government operates on a larger scale.

008

Rep. Esquivel

Asks if the state is prohibited from receiving more than a 8% return on investments under state statutes.

010

Lincoln

Affirms that it does sound correct and states that she will get an answer for Rep. Esquivel.

014

Rep. Schaufler

Asks whether Ms. Lincoln will find out whether greater returns means a greater risk.

016

Lincoln

Affirms that she will. Conveys that the departments knows its first responsibility is to serve business, get people back to work, and ensure high quality, high wage, family wage jobs. Emphasizes that it is what the Supplemental Employment Department Administrative Fund (SEDAF) supports.

032

Rep. Holvey

Acknowledges that the investment sounds good, but he is nervous about reducing this fund in light of insolvency in other states. Expresses a strong interest in seeing the numbers that Rep. Esquivel referred to for the past five years.

041

Lincoln

Affirms that she will get the numbers for Rep. Holvey. Reiterates that her number one responsibility is to maintain the Trust Fund’s solvency. Admits that if Oregon gets into the recession like the one in the early 80s, this model won’t work. Emphasizes that the plan has gotten consensus that the model does not put the fund at any risk at the proposed benchmark.

058

Rep. Esquivel

Mentions that Idaho does not fluctuate with their ins and outs like Oregon does. 

063

Lincoln

Explains that this is correct. States that California went bankrupt because they did not adjust their taxes over the years.

067

Tom Byerley

Assistant Director of Unemployment Insurance, Employment Department. Explains that Idaho has not indexed its taxable base rate like Oregon has and Idaho has had to cut benefits to workers. Conveys that it makes Idaho an undesirable state for workers, because Idaho had to cut benefits.

078

Lincoln

Refers to page 22. Discusses that there are other bills that may be before the committee and most are minor changes. Refers to contacts on last page. Introduces Craig Hickman, Deputy Director, Department of Employment, and Tamara Brickman, Legislative Coordinator, Department of Employment.

085

Rep. Esquivel

Asks for a geographical breakdown of where the people on the advisory council come from and forward it to his office. Asks whether you can sign up to receive UI online.  

096

Rep. Lincoln

Affirms that you can sign up online.

097

Rep. Esquivel

Asks if staff will be reduced through retirement.

098

Lincoln

Affirms that it is the plan.

099

Rep. Esquivel

Asks if an employer can be notified when a type of employee comes onto the system that the employer is seeking.

106

Lincoln

Explains that the employer can do more than just that task. Notes that employers can search by skills not the title of applicants.

110

Rep. Esquivel

Asks whether the program would flag the employer’s computer if someone new came into the database.

112

Lincoln

Clarifies that she does not think the program has that automatic flagging yet. Explains that it is a continually evolving system. Emphasizes that the staff that monitors that industry would know that a new employee was there and the employer would be called.

121

Rep. Shields

Asks if it is possible for sole proprietors to participate in the UI system

123

Byerley

Explains that a sole proprietor usually is not covered but they could provide coverage for themselves and be covered.

129

Chair Brown

Mentions the list of Department of Unemployment bills could come before the committee. Close informational meeting.

131

Adkins

Mentions that committee will meet Monday.

139

Rep. Brown

Adjourns the meeting. 10:32 a.m.

 

 

EXHIBIT SUMMARY

 

  1. Committee Rules, Proposed, Staff, 2 pp                   
  2. Business and Consumer Affairs, Informational packet, Cory Streisinger, 54 pp
  3. Building Codes Division, Informational packet, Mark Long, 4 pp
  4. Oregon Employment Department, Informational packet, Debbie Lincoln, 27 pp