SENATE COMMITTEE ON GENERAL GOVERNMENT

 

 

March 31, 2005                                                                                                       Hearing Room B

3:10 P.M.                                                                                                                      Tapes 53 - 56

 

MEMBERS PRESENT:         Sen. Frank Shields, Chair

Sen. Gary George, Vice-Chair

Sen. Bruce Starr

Sen. Joanne Verger

 

MEMBER EXCUSED:          Sen. Vicki Walker

 

 

STAFF PRESENT:                 Judith Callens, Committee Administrator

Linda K. Gatto, Committee Assistant

 

 

MEASURES/ISSUES HEARD:        

                                                SB 511 – Public Hearing

                                                SB 498 – Work Session

                                                SB 155 – Reconsideration and Work Session

                                                SB 156 – Reconsideration and Work Session

                                                SB 310 – Work Session – Invited Testimony

                                                SB 752 – Work Session – Invited Testimony

                                                SB 984 – Work Session – Invited Testimony

                                                SB 986 – Work Session – Invited Testimony

 

 

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 53, A

005

Chair Shields

Calls the meeting to order at 3:12 p.m. Announces that SB 150 will be set over. Opens the public hearing on SB 511.

SB 511 – PUBLIC HEARING

020

Judith Callens

Committee Administrator. Reviews the provisions of SB 511.

007

Sen. Ryan Deckert

Senate District 14. Submits and reviews prepared testimony in support of SB 511 (EXHIBIT A). Provides a background on the energy assistance program and proposed redirection of funds.

117

Jerralynn Ness

Executive Director, Community Action Washington County. Submits and reads prepared testimony in support of SB 511 (EXHIBIT B) which explains how the Community Action energy assistance program works.

200

Dana Galaxy

Community Action. Submits and reads prepared testimony in support of SB 511(EXHIBIT D).

249

Chair Shields

Recesses the public hearing on SB 511 (see Tape 55, A #385). Opens the work session on SB 498.

SB 498 – WORK SESSION

278

Judith Callens

Committee Administrator. Explains the provisions of SB 498 and reviews the changes in the -1 and -2 amendments (EXHIBIT E).

306

Chris Warner

Legislative Director for Governor Kulongoski.  Submits a copy of a letter from Governor Kulongoski to State Lottery Director Dale Penn (EXHIBIT F).

365

Sen. Verger

Asks if there has been spot checking with businesses on what would be a fair return on investment.

372

Warner

Responds the data is being looked over and the final recommendation is anticipated next week.

400

Sen. George

Referring to (EXHIBIT F) asks why pass a bill telling them what to do when the Governor has confidence in them.

413

Warner

Responds that he is not here to speak to the bill only to discuss the commission process and the Governor’s input.

424

Chair Shields

Affirms the testimony is to provide background.

434

Sen. George

States when the lottery was passed it was for economic development. Asks what would be the impact if the amount was reduced.

443

Warner

Responds that it is hopeful the commission will look at the data and to the retailers to maximize the revenue.

433

Chair Shields

States that he spoke with Dale Penn earlier in the day. Reviews the proposals from the Lottery Commission, the Restaurant Association and Stand for Children.  

TAPE 54, A

041

Chair Shields

Asks are there any new pieces that can break the log jam.

051

Warner

Responds that whatever decision is made someone will be unhappy.

073

Cathy Sansoni

Advocate, Stand for Children. States that the children in Oregon schools are being short changed. Comments on the shorten number of school days, loss of crucial reading programs, buildings needing repair, and larger class sizes.

099

Dana Hepper

Testifies in support of the 20% proposal on line games and 28% on video poker.

113

Chair Shields

States that SB 498 will be heard again on Tuesday and voted on at that time. Comments that there is no “moral high ground” in gambling. Closes the public hearing on SB 498 and opens a work session on SB 155 for the purpose of reconsidering the previous vote.

SB 155 RECONSIDERATION AND WORK SESSION

149

Sen. George

MOTION:  Moves to RECONSIDER the vote by which “SB 155 was moved to the floor with a DO PASS AS AMENDED recommendation” for the purpose of referring the measure to the Committee on Ways and Means.

158

 

VOTE:  3-0-2

EXCUSED:  2 - Starr B., Walker

 

Chair Shields

Hearing no objection, declares the motion CARRIED.

166

Sen. George

MOTION:  Moves SB 155 to the floor with a DO PASS AS AMENDED recommendation and BE REFERRED to the Committee on Ways and Means.

167

 

VOTE:  3-0-2

EXCUSED:  2 - Starr B., Walker

 

Chair Shields

Hearing no objection, declares the motion CARRIED.

170

Chair Shields

Closes the work session on SB 155 and opens a work session on        SB 156 for the purpose of reconsidering the previous vote.

SB 156 – RECONSIDERATION AND WORK SESSION

171

Sen. George

MOTION:  Moves to RECONSIDER the vote by which “SB 156 was moved to the floor with a DO PASS AS AMENDED recommendation” for the purpose of referring the measure to the Committee on Ways and Means.

177

 

VOTE:  3-0-2

EXCUSED:  2 - Starr B., Walker

 

Chair Shields

Hearing no objection, declares the motion CARRIED.

182

Sen. George

MOTION:  Moves SB 155 to the floor with a DO PASS AS AMENDED recommendation and BE REFERRED to the Committee on Ways and Means.

184

Sen. B. Starr

Informs the committee of his intention to seek an opinion from Legislative Counsel regarding the constitutionality of the measure.

192

 

VOTE:  4-0-1

EXCUSED:  1 – Walker

 

Chair Shields

Hearing no objection, declares the motion CARRIED.

192

Chair Shields

Closes the work session on SB 156 and opens a work session on          SB 310, SB 752, SB 984 and SB 986.

SB 310, SB 752, SB 984, and SB 986 - WORK SESSION – INVITED TESTIMONY

245

Brenda Rocklin

Interim President and CEO of SAIF Corporation. Submits prepared testimony (EXHIBIT G) in response to the testimony delivered by John DiLorenzo Jr., on March 29, 2005.

244

Rocklin

Addresses the committee stating that past appearances before the committee have been intended to provide pertinent information. Expresses disappointment that a discussion with Mr. DiLorenzo had not taken place prior to his testimony on Tuesday. Believes that many of the concerns raised during that testimony could have been addressed and are non-issues.

320

Rocklin

Begins reading testimony referring to Attachment 1 on page seven regarding the mysterious e-mail referenced in Mr. DiLorenzo’s testimony.

358

Chris Davie

Government Affairs Director, SAIF Corporation. Begins reading testimony regarding the renegotiation of the AOI contract         (EXHIBIT G, Page 2).

400

Davie

Displays a stack of papers that represents the documents that were provided to Mr. DiLorenzo in January 2005. Refers to Attachment 3-3 (EXHIBIT G, Page 11).

450

Chair Shields

Asks where it indicates this is for new business.

456

Davie

Answers in the center of the page and continues to read testimony.

TAPE 53, B

042

Rocklin

Begins with testimony regarding Auditing of Group Contracts  (EXHIBIT F, Page 4). States that on February 15, 2005 she made a recommendation to Governor Kulongoski and to this committee that all SAIF’s group contracts should be audited over the coming year. Suggests that Associated Oregon Industries (AOI), Associated General Contractors (AGC) and Associated Oregon Loggers (AOL) address the concerns Mr. DiLorenzo raised regarding campaign contributions.

100

Rocklin

Concludes testimony discussing management and oversight of SAIF Corporation and states that SB 310 contains key general provisions.

106

Rocklin

Addresses Attachment 5 which relates to campaign contributions (EXHIBIT F, Page 20).

113

Sen. George

Comments on e-mails as contracts. States he is disturbed by the choice of words used in response to legitimate concerns. Notes that he is concerned about continued lobbying.

134

Rocklin

Responds that many of the issues raised by Mr. DiLorenzo would be of concern on the face. States she believes that if Mr. DiLorenzo had talked to her she could have clarified those concerns.

154

Chair George

Confirms that Mr. DiLorenzo has had to go to court to get information.

157

Rocklin

Responds not since August 12, 2004.  

156

Sen. Verger

States that Ms. Rocklin is defending people who have left the organization and believes that those people who made the decisions should be subpoenaed.

180

Chair Shields

Believes that the former executive would take the fifth amendment. Sen. Walker has suggested subpoenaing Mr. Thurber.

192

Sen. Verger

Responds that an individual that is requested to provide clarity and then takes the fifth amendment makes a non verbal statement.

221

Craig Honeyman

Executive Director, Associated General Contractors (AGC). Submits and reads prepared testimony on group workers’ compensation program (EXHIBIT H).

243

Chair Shields

Asks are they in a never ending cycle of contracts.  

264

Jessica Harris -Adamson

Legislative Affairs Manager, AGC. Answers affirmatively.

266

Honeyman

Continues reading testimony regarding how money under the AGC group contract is spent (EXHIBIT H, Page 2). Refers to the addendum showing the services provided by AGC (EXHIBIT H, Page 10).

314

Harris-Adamson

Reviews the clarifications in the Partnership Services Addendum (EXHIBIT H, Page 7).

307

Sen. B. Starr

Ask for a comparison of the contract with SAIF and the prior contract with Liberty.

337

Honeyman

Responds it was before his time as executive director but can say that the board switched to SAIF because of SAIF’s focus on loss control, claims staff, providing return to work consultants and a less expensive premium.

357

Harris-Adamson

Adds that AGC has claims specialists that are specialized in the construction industry. The specific mention of safety services were not in the Liberty agreement.

381

Chair Shields

Refers to page two and the fuel costs. Requests information on the typical day of a loss control consultant.

395

Honeyman

Responds there are nine loss control consultants in a Ford Explorer SUV equipped with safety education materials.

421

Chair Shields

Asks what happens on unannounced visits.

422

Honeyman

Answers that they walk the job site and make notes on OSHA violations or potential hazards and consult with management about concerns and the services that AGC provides.

439

Sen. Verger

Asks if Ms. Harris-Adamson was involved in the contract negotiations.

460

Harris-Adamson

Answers no.

461

Sen. Verger

Asks if at any time AGC suspected that there were poor business practices.

479

Honeyman

Explains that he is not aware of anything in the current or prior administration that would cause concern.

TAPE 54, B

035

Sen. B. Starr

Asks if the agreement with SAIF has been audited by an outside independent audit.

039

Honeyman

Responds that they have been audited and are open to and prepared to cooperate with an audit.

043

Sen. B. Starr

States that for AGC members this is a successful program. Asks how the relationship with SAIF would change if SAIF became a private company.

061

Harris-Adamson

Responds there has not been discussion with an actuary. Members are concerned about what would happen.

073

Sen. B. Starr

Responds that the reality is changes will happen anyway and no one knows how this will change relationships.

090

Chair Shields

Refers to the drop in claims frequency. Requests that he resume testimony summarizing response to specific allegations.

093

Honeyman

Continues with testimony; states that the board of directors and members are infuriated by the political allegations. Emphasizes that no monies are used for political purposes.

170

Honeyman

Concludes testimony in support of reasonable reforms to SAIF and       SB 310.

208

Sen. George

Asks what part of SB 310, SB 752, and SB 984 will damage SAIF.

206

Harris-Adamson

Responds that SB 310 is positive bill to resolve credibility issues and AGC believes there needs to be transparency. Expresses concern that SB 984 would make SAIF the insurer of last resort. States that AGC does not have a position on SB 752. Explains why AGC opposes       SB 986 which would eliminate group programs.

275

Richard Butrick

President and CEO, Associated Oregon Industries, (AOI). Submits and reads prepared testimony in response to Mr. DiLorenzo’s testimony from Tuesday and with attached copies of documents related to political contributions, IRS forms, news articles and the text of Measure 38 (EXHIBIT I).

353

Butrick

Refers to the summary statement of contributions and expenditures filed by Oregonians for Accountability (EXHIBIT I, Page 8).

426

Butrick

Continues to read prepared testimony referring to an Oregonian news article (EXHIBIT I, Page 99)

TAPE 55, A

003

Butrick

Continues to read prepared testimony (EXHIBIT I, Page 6).

026

Chair Shields

Refers to page seven and inquires if Mr. Butrick is suggesting that the committee is wasting their time.

033

Butrick

Responds that he personally does not believe the suggested bills will improve SAIF, workers safety or the cost of doing business with SAIF.

036

Chair Shields

Asks if that includes SB 310.

037

Butrick

Answers that he supports SB 310 because it puts SAIF in the same position that other state agencies are in.

045

Chair Shields

Refers to the middle of page seven and states that it implies the committee is wasting time on the SAIF issue.

063

Butrick

Responds that his name was called out on the Tuesday and this affects the 23 people that work at AOI.

075

Chair Shields

Requests information on AOI.

081

Butrick

Responds that he has testified in detail before. States that in 1965 AOI carried the three-way system; without AOI Liberty Northwest and over 100 other insurance companies in Oregon would not be here.

101

Chair Shields

Comments on the nature of the testimony received.

104

Butrick

Responds that as Sen. B. Starr mentioned, legislative oversight will become part of the culture. Adds that understanding a $400 million a year entity, with over 800 employees covering 30,000 to 40,000 employers plus their employees is not time wasted.

114

Sen. B. Starr

Asks if AOI has contracts with any other insurer.

123

Butrick

Answers affirmatively, the retail association had a contract with Liberty Northwest until 1991.

130

Sen. B. Starr

Asks has the group agreement with SAIF been audited in the past and is he concerned about it being audited in the future.

136

Butrick

Responds that he does not believe it has happened and he has no problem if it does happen.

152

Sen. George

Asks does he believe that in the past five years that the conduct by SAIF has been above board and in the public interest.

148

Butrick

Responds that his relationship with the former SAIF corporation was cordial, straight forward, and argumentative at times.

176

Sen. George

States these bills are for clarity, accountability, openness and fairness because this is a government entity.

190

Butrick

Responds it is the governor’s responsibility to place board members with Senate confirmation.

214

Jim Geisinger

Associated Oregon Loggers, Inc. Submits prepared testimony in opposition to the provisions of SB 986 (EXHIBIT J).  Discusses the services provided by the loss-control consultants. Comments on insurance cancellations (EXHIBIT J, Page 3) and concludes these are reasons why SAIF needs to remain. States support for SB 310.

360

Sen. B. Starr

Asks if his agreement with SAIF has ever been audited.

364

Geisinger

Responds there is a clause that SAIF can audit at any time. States he does not know if they have been audited prior to the renewal of their contract.

385

Chair Shields

Closes the public hearing on SB 310, SB 752, SB 984 and SB 986. Reconvenes the public hearing on SB 511.

SB 511 – PUBLIC HEARING

391

Julie Brandis

Executive Director AOI Foundation. Testifies in opposition to SB 511 because of sensitivity issues regarding the public purpose trust fund.

420

Ossie Rose

Representing Oregon Association of Education Service Districts (ESD). States that when the audits were done, long-term dept was entered into on the assumption these monies would continue to pay off the debt (EXHBIT C).

463

Jeff Bissonnette

Fair and Clean Energy Coalition. States that SB 511 pits low income people against schools and it mixes two funds that were specifically designed for different purposes. Acknowledges the ultimate goal of     SB 511 and suggests either SB 81 or SB 408 as a vehicle focusing on the low income bill pay assistance.

TAPE 56, A

029

Chair Shields

Suggests talking with Senator Deckert for compromises.

037

Sen. Verger

States that the money is divided five ways and 10% is for energy conservation in schools. Asks what that includes besides audits.

046

Rose

Refers to the report SB 1149 Positive Impacts, and explains it includes HVAC systems, lights, whatever the audit recommends to save energy.

050

Sen. Verger

Asks are funds used for the projects.

053

Rose

Answers affirmatively.

055

Sen. Verger

States that the energy trust gets about $50 million a year.

059

Bissonnette

Informs that the portion going to schools for the audits and support for the projects is about $5 - $6 million a year.

071

Sen. Verger

Comments that the bill states the audits are done and the money should be shifted to assist low income families.

083

Bissonnette

Replies the money was intended to support the audits and implement the audit recommendations over the ten year life span.

090

Vice Chair George

Asks have PCB Ballast (polychlorinated biphenyls) and digital controls updates been completed in the older buildings.

101

Rose

Answers no. States that in Portland 60% of the audits are complete and have projects started.

105

Vice Chair George

Asks if the remaining projects are funded.

106

Rose

Answers no. Expresses there is concern if the funding is withdrawn because the commitments have been made.

109

Bissonnette

States that the public purpose dollars are collected and spent in the service territories of Portland General Electric and Pacific Corp.

113

Vice Chair George

Clarifies the dollars must be spent in the school districts in those areas. Closes the public hearing on SB 511 and adjourns the meeting at 5:45 p.m.

 

EXHIBIT SUMMARY

 

  1. SB 511, prepared testimony, Senator Ryan Deckert, 2 pp
  2. SB 511, prepared testimony, Jerralynn Ness, 21 pp
  3. SB 511, Statewide report impact of SB 511, Ossie Rose,
  4. SB 511, prepared testimony, Dana Galaxy, 1 p
  5. SB 498, -1 and -2 amendments, staff, 2 pp
  6. SB 498, letter from Governor Kulongoski to Dale Penn, Chris Warner, 1 p
  7. SAIF, prepared testimony, Brenda Rocklin, 20 pp
  8. SAIF, prepared testimony, Craig Honeyman, 10 pp
  9. SAIF, prepared testimony and attached documents, Richard M. Butrick, 114, pp
  10. SB 986, prepared testimony and correspondence, Jim Geisinger, 4 pp