SENATE COMMITTEE ON GENERAL GOVERNMENT

 

 

February 24, 2005                                                                                                   Hearing Room B

3:10 P.M.                                                                                                                     Tapes  22 - 23

 

MEMBERS PRESENT:         Sen. Frank Shields, Chair

Sen. Gary George, Vice-Chair

Sen. Joanne Verger

Sen. Vicki Walker

 

MEMBER EXCUSED:          Sen. Bruce Starr

 

STAFF PRESENT:                 Judith Callens, Committee Administrator

Gary Roulier, Committee Assistant

 

MEASURES/ISSUES HEARD:        

SB 468 – Public Hearing and Work Session

SB 498 – Public Hearing

 

 

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 22, A

003

Chair Shields

Opens the meeting at 3:14 p.m. and opens a public hearing on SB 468.

SB 468 – PUBLIC HEARING

013

Tom Gallagher

Professional Land Surveyors of Oregon. Testifies in support of SB 368.

019

R. Charles Pearson

Clackamas County Surveyor. Presents written testimony (EXHIBIT A)  and testifies in support of SB 468.

030

Gallagher

Summarizes the professional groups that have reviewed the bill.

038

Chair Shields

Closes the public hearing on SB 468 and opens a work session on SB 468.

SB 468 – WORK SESSION

040

Sen. Walker

MOTION:  Moves SB 468 to the floor with a DO PASS recommendation.

 

 

VOTE:  4-0-1

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

EXCUSED:  1 - B. Starr

 

Chair Shields

The motion CARRIES.

SEN. GEORGE will lead discussion on the floor.

051

Chair Shields

Closes the work session on SB 468.

055

Sen. Walker

Provides some information on SAIF policies from 1990-91 regarding employee awards.

082

Chair Shields

Opens a public hearing on SB 498.

SB 498 – PUBLIC HEARING

086

Judith Callens

Administrator. Explains the provisions of the bill.

097

Chair Shields

Reviews the intent of the hearings and notes that the concept behind this bill is something that has previously been considered.

112

Sen. Charlie Ringo

Senate District 17. Testifies in support of SB 498. Explains that fifteen percent is a reasonable rate of return for lottery compensation.

151

Rep. Diane Rosenbaum

House District 42. Presents written testimony (EXHIBIT B) and testifies in support of SB 498.

194

Rep. Rosenbaum

Discusses a study of lottery compensation rates.

229

Chair Shields

Asks if she has had conversations with tavern owners in her district regarding the size of lottery compensation rates.

238

Rep. Rosenbaum

Answers that she has talked to owners in her district, and emphasizes the lottery should not be subsidizing their businesses.

257

Sen. George

Asks what the cost would be for the state to remove the taverns as operators and operate the machines directly.

262

Rep. Rosenbaum

Responds that she is not aware of what it would cost. Adds that the tavern owners should expect to be fairly compensated.

272

Sen. George

Asks if she is willing to ask teachers, for example, to accept a decrease in their compensation.

287

Rep. Rosenbaum

Answers that there is a process that determines teacher compensation through labor negotiations.

298

Dale Penn

Director, Oregon Lottery. Discusses the history of lottery compensation with the chair.

345

Penn

Continues a summary of the history of the Oregon Lottery. Adds that the original relatively high compensation rates were due to the need to establish a customer base.

404

Penn

Reviews recent actions by the Lottery Commission.

TAPE 23, A

005

Penn

Discusses the effect of commission rates on restaurant business decisions.

033

Penn

Summarizes the small number of retailers that have been in violation of the dominant use statute.

057

Penn

States that the priority should be to protect the revenue stream now in place with lottery retailers.

066

Chair Shields

Asks how Oregon rates compare to other states.

077

Penn

Answers that Oregon pays the lowest commissions, but notes that in most other states, the retailer owns the machine and has more overhead.

103

Sen. George

Asks for the total amount of dollars that flow through the lottery retailers.

119

Penn

Responds that the figure is in the billions.

133

Steve Novick

Portland, Oregon. Testifies in support of SB 498. Reviews a study done by ECONorthwest on lottery compensation rates.

176

Novick

Summarizes recent actions by the Lottery Commission and a history of rates.

218

Novick

Continues a discussion of rates of return for lottery retailers.

247

Novick

Comments on recent decisions on “dominant use.”

287

Novick

Notes that the primary goal of the lottery should not be to maintain its distributor network.

293

Sen. Walker

Asks if a lawsuit has ever been filed to challenge the court decision on dominant use. Discusses who would have standing to file the suit and asks for a summary from the witness on how many lottery retailers are in Oregon.

321

Novick

Responds that he will provide a summary and adds that there are approximately 2,000 lottery retailers in the state.

331

Andi Jordon

Oregon Parents Teachers Association. Testifies in support of SB 498.

366

Bill Perry

Director of Government Relations, Oregon Restaurant Association. Presents written testimony (EXHIBIT C) and testifies in opposition to SB 498.

TAPE 22, B

007

Perry

Notes that restaurants are the largest producers of lottery revenue. Adds that many retailers use the lottery to expand their business base.

051

Perry

Stresses that a fifty percent reduction in rates would be drastic.

097

Steve Moor

Restaurant Owner, Southeast Portland. Discusses labor costs on video poker.

137

Moor

Notes that his profit per square foot on his lottery machines is almost equal to his profit per square foot for his food service operations.

169

Moor

Questions the issue of “subsidized taverns,” and notes that you have to examine gross sales.

188

Sen. Walker

Thanks the witness for his viewpoint.

198

Perry

Reviews some data from other states’ compensation rates, page 3 to 5 (EXHIBIT C)

220

Tricia Smith

Oregon School Employees Association. Submits written testimony (EXHIBIT D) and testifies in support of SB 498.

276

Smith

Reviews the origin of the Oregon Lottery.

300

Chair Shields

Asks if the rate of return today would meet the original intent of  legislation to enact the lottery.

320

Smith

Responds that the intent was to raise revenue for the state rather than as a business boon to retailers.

370

Smith

States that the recent rates are excessive.

403

Chair Shields

Asks how involved they were in the six months preceding the recent rate determination.

407

Smith

Reviews association involvement.

 

002

Richard Burke

Libertarian Party of Oregon. Testifies in opposition to SB 498 and notes that putting a cap into statute is bad policy.

051

Burke

Emphasizes that lower commission rates will also affect income tax revenues.

066

Judy Wiser

Portland, Oregon. Testifies in support of SB 498. Describes some of the restaurants as primarily “gambling houses.”

107

Wiser

Recounts experiences in taverns with lottery games.

043

Wiser

Discounts the arguments that decreasing lottery commissions would force retailers to drop health insurance on their employees.

076

Petra Berger

Salem/Keizer Stand for Children. Submits written testimony (EXHIBIT E) and testifies in support of SB 498.

127

Berger

Notes that a fifteen percent return is reasonable.

177

Berger

Emphasizes the importance of investment in education.

230

Sen. Verger

Expresses her appreciation for teachers, and notes that most people don’t understand the challenges facing teachers today.

252

Grover Simmons

Oregon State Elks Association. Summarizes charitable contributions by the organization throughout the state.

294

Simmons

Reviews income figures at present rates versus the proposed rates.

340

Simmons

Adds that the reduced amount would affect the level of charitable contributions.

 

Mary Anne Gest

Director of Public Affairs, Wild Salmon Center. Submits written testimony in support of SB 498 (EXHIBIT F).

353

Chair Shields

Closes the public hearing on SB 498 and adjourns the meeting at 5:02 p.m.

 

 

EXHIBIT SUMMARY

 

  1. SB 468, written testimony, R. Charles Pearson, 2 pp
  2. SB 498, written testimony, Rep. Diane Rosenbaum, 1 p
  3. SB 498, written testimony, Bill Perry, 5 pp
  4. SB 498, written testimony, Tricia Smith, 4 pp
  5. SB 498, written testimony, Petra Berger, 2 pp
  6. SB 498, written testimony, Mari Anne Gest, 1 p