| 2003 Legislative Report |
Note: A full 2003 Association of Oregon Faculties Legislative Report can be obtained by contacting AOF at (503) 363-7084 or pacounsel@pacounsel.org. Introduction The 2003 Legislative Session began on January 14 with gushing assurances of bipartisan cooperation and bold leadership and ended 227 days later in dissension, distrust and dysfunction. Aside from smashing the old record for the longest session ever, the 2003 Session was marked by months of frustrating inactivity as a paralysis settled in while legislators struggled to reconcile sharp divisions over spending levels and priorities and the reality of general fund revenues that were almost $2 billion below the original budgeted amounts for the 2001-2003 biennium. In the end, a coalition of moderate Republicans and Democrats crafted revenue and spending packages that allowed the Legislature to finally adjourn, but left the institution and its members divided to an unprecedented degree. The legacy of the 2003 Session will be the likely February 2004 vote on the tax increase package that a bare super-majority of the House and Senate supported. Opponents of this measure have begun their campaign to secure the necessary signatures to place it on the ballot. Proponents are gearing up their campaign to convince Oregonians that the service cuts that will result if the measure fails at the polls are untenable and will further hamper Oregon’s economic recovery. Opponents on the other hand will argue tax increases will in fact stall Oregon’s economic recovery. The Oregon Senate was deadlocked at 15-15. In organizing that chamber, a working agreement was reached that placed Senator Peter Courtney (D-Salem) in the President’s Office and Senator Lenn Hannon (R-Ashland) in the second spot of President Pro Tempore. The Senate co-chair of the budget-writing Joint Ways and Means Committee was first-term Senator Kurt Schrader (D-Canby). Committee chair positions were divided between Republicans and Democrats. Divisions within the Senate Republican and Democrat caucuses were as severe as any in memory. In the end, a coalition of moderate Democrats and Republicans delivered the votes to complete the Senate agenda. Their colleagues at either extreme of the political spectrum were left out, or arguably left themselves out, of the “go home” negotiations that in the past have produced at least a semblance of unity as sessions end. Despite a strong-looking Republican majority of 35-25, the dynamics in that chamber were little different from the Senate. A group of moderate Republicans, first known as the “Usual Suspects” and later referred to in a less flattering manner, forged an agreement on revenue and spending with the Democrat Caucus over the loud opposition of the House Speaker and Majority Leader. Within the Republican Caucus, several members began publicly attacking their brethren and on the Democrat side, their strategy could be described as obstructionist at best. Perhaps the simplest way to sum up this session is to note the fact that the Senate adjourned sine die on August 26 and the House did so on August 27. Not exactly a highly coordinated effort. Like any session, there were accomplishments. The first significant transportation funding package in years was passed to repair bridges and highways across the state. Major PERS restructuring was approved but faces an uncertain fate in the courts. Budgets were passed that will allow the continuation of many services at levels close to what were reached in the 2001-2003 biennium. A compromise was reached on a statewide 1% lodging tax that will be used to promote Oregon tourism. The Oregon Health Plan was salvaged. Public safety programs were, by and large, maintained at adequate levels. For the Association of Oregon Faculties (AOF), the 2003 session provided many challenges and numerous successes. Funding for the Oregon University System (OUS) was obviously a major effort. The OUS budget for 2003-2005 was in peril throughout the session. Ultimately, a package was crafted that provided an overall funding increase of over 11% even though the State General Fund share of the appropriation was reduced. SB 913, sponsored by AOF, was passed despite the strong opposition of OUS and the state Department of Administrative Services. This bill will allow campus health centers to provide services to faculty, staff and dependents of students. Governor Kulongoski threatened to veto SB 913 but was eventually persuaded to allow it to become law without his signature. It is expected that rulemaking to implement the measure will begin in 2004. AOF lobbyists twice defeated attempts by OUS to change the process under which contribution rates are set for the Optional Retirement Plan (ORP) that over 2,000 faculty members have joined. OUS officials wanted to give the State Board of Higher Education the authority to set the contribution rate. The current structure was preserved which requires that contribution rates to the ORP remain at the same exact level as contribution rates to the PERS system. The following report details the final status of all the bills that Public Affairs Counsel followed for AOF during the 2003 legislative session. HB 5077 is the omnibus budget reconciliation bill produced by the 2003 Legislature and includes the 2003-2005 biennium budget for the Oregon University System (OUS). General Fund support for OUS in the 2003-2005 biennium was reduced by 10.8% from $617.4 million to $550.7 million. Other Fund support increases by 29.5 % from $757.5 million to $981.1 million. Most of this increase is attributable to tuition increases. Overall, the OUS budget increases by 11.4% from $1.375 billion to $1.532 billion. HB 5077 includes disappropriation provisions that are scheduled to go into effect in the event that the tax increase portions of HB 2152 (see below) are referred to the voters and fail at a special election set for February 3, 2004. The total disappropriation amount is approximately $800 million of which $7.5 million would come from higher education. If, however, the tax measure goes down at the polls, it is more likely that a special session of the Legislature willbe convened to craft a budget rebalance plan.
HOUSE PASSED A-ENGROSSED, 32 AYES REFERRED TO SENATE BUDGET SENATE PASSED B-ENGROSSED, 19 AYES HOUSE CONCURRED, 40 AYES SPEAKER SIGNED PRESIDENT SIGNED HB 2152 HB 2152 was selected as the vehicle for the omnibus tax package that ultimately was passed with Democrat and moderate Republican votes. The tax package includes $800 million in personal and corporate income tax increases that would be effective for a three year period. Opponents of the tax package are collecting signatures to refer the bill, including the $.10 temporary tax, to a public vote in February 2004. If the measure is referred and fails at the polls, a special session is expected in mid-to-late February to rebalance the budget.
REFERRED TO HOUSE REVENUE HOUSE PASSED A-ENGROSSED, 51 AYES REFERRED TO SENATE REVENUE SENATE PASSED B-ENGROSSED, 19 AYES HOUSE CONCURRED, 36 AYES SPEAKER SIGNED PRESIDENT SIGNED GOVERNOR SIGNED SB 913 SB 913, sponsored by the Association of Oregon Faculties, allows campus health centers to provide services to faculty, staff and dependents of students, in addition to the requirement that these centers provide services to students. This bill was passed over the strenuous objections of the Oregon University System and the Department of Administrative Services. The Governor threatened to veto the bill, but eventually allowed it to become law without his signature.
REFERRED TO SENATE RULES SB 884 SB 884 would have allowed state institution of higher education to offer health services to faculty of institution. (See SB 913 above)
SB 437
SB 437 modifies provisions relating to Oregon University System regarding academic degree programs, delegation of duties, functions and powers, information technology, funds and accounts, property and public records.
REFERRED TO SENATE WAYS AND MEANS SUBCOMMITTEE ON EDUCATION SENATE PASSED B-ENGROSSED, 27 AYES REFERRED TO HOUSE WAYS AND MEANS HOUSE PASSED B-ENGROSSED, 52 AYES PRESIDENT SIGNED SPEAKER SIGNED GOVERNOR SIGNED
HB 2003
HB 2003, sponsored by a variety of PERS employers, makes dramatic changes to the PERS system that will result in an estimated $9 billion in savings over time. One provision of HB 2003 prohibits crediting any interest earnings to members accounts as long as there is a deficit in the deficit reserve account. This does not apply to members retiring before April 2004. The bill also eliminates the option of contributing or transferring funds into the Variable Annuity Account after January 1, 2004. Another feature, prohibits contributing the six percent employee contribution to a members PERS account. Instead, the six percent can be contributed to the individual account program, which is the defined contribution piece of HB 2020, the PERS successor plan. Employers are permitted to agree to pay the employee contribution. HB 2003 also freezes cost-of-living adjustments for members retiring between April 2000 and April 2004. This is intended to recapture interest earnings credited in 1999. HB 2003 is the subject of twelve separate lawsuits that have been filed to date and its constitutionality will ultimately be decided in the Oregon Supreme Court or the U.S. District Court.
HOUSE PASSED A-ENGROSSED, 39 AYES REFERRED TO SENATE GENERAL GOVERNMENT SENATE PASSED B-ENGROSSED, 19 AYES HOUSE CONCURRED, 39 AYES SPEAKER SIGNED PRESIDENT SIGNED GOVERNOR SIGNED
HB 2004
HB 2004 requires that Public Employees Retirement Board adopt mortality tables, based on best available actuarial information, every two years for purpose of computing benefits of members and beneficiaries of members. Provides that mortality tables first become effective on January 1, 2005. Specifies method of determining benefits for retirees and other beneficiaries on or after July 1, 2003, and before January 1, 2005. Confers exclusive jurisdiction on Supreme Court to determine contractual and constitutional issues relating to implementation of Act. Requires petition for review to be filed before August 15, 2003. Directs board to conduct study of life expectancy of certain members who are firefighters or police officers and to adopt parate actuarial equivalency factor tables if necessary. Requires board to recalculate contribution rates of all participating public employers. Declares emergency, effective on passage.
HOUSE PASSED A-ENGROSSED, 51 AYES REFERRED TO SENATE GENERAL GOVERNMENT REFERRED TO SENATE WAYS AND MEANS SUBCOMMITTEE ON GENERAL GOVERNMENT SENATE PASSED C-ENGROSSED, 25 AYES HOUSE CONCURRED, 48 AYES SPEAKER SIGNED PRESIDENT SIGNED GOVERNOR SIGNED
HB 2020
HB 2020 is the PERS successor plan for new hires after the effective date of the measure. The new plan is a hybrid defined benefit/defined contribution plan. Employer costs for the defined benefit plan are estimated at approximately 8.25% of payroll and 6% can be contributed to the defined contribution portion of the plan. Employers are free to decide whether to make the 6% contribution on behalf of employees.
In the bill, retirement ages are set for General Service members at 65 or 58 with 30 years of service. For Police and Fire members, the normal retirement age would be 60 or 53 with 25 years of service. If a Tier One or Tier Two member has a six month break in service, the member would default into the new plan which is called the Oregon Public Service Retirement Plan.
HOUSE PASSED A-ENGROSSED, 32 AYES REFERRED TO SENATE GENERAL GOVERNMENT SENATE PASSED B-ENGROSSED, 16 AYES HOUSE REFUSED TO CONCUR CONFERENCE COMMITTEE APPOINTED SENATE PASSED CONFERENCE COMMITTEE REPORT, 25 AYES HOUSE PASSED CONFERENCE COMMITTEE REPORT, 43 AYES SPEAKER SIGNED PRESIDENT SIGNED GOVERNOR SIGNED
HB 2001
HB 2001 prohibits Public Employees Retirement Board from crediting accounts of Tier One members with earnings in excess of assumed interest rate until certain conditions are met. Revises reserve account funding.
HOUSE PASSED A-ENGROSSED, 60 AYES REFERRED TO SENATE GENERAL GOVERNMENT SENATE PASSED A-ENGROSSED, 28 AYES SPEAKER SIGNED PRESIDENT SIGNED GOVERNOR SIGNED
HB 2005
HB 2005 reduces membership of Public Employees Retirement Board from 12 to five members. Requires that one member is public employer, one member is public employee and three members have experience in business management, pension management or investing.
Declares emergency, effective on passage.
HOUSE PASSED A-ENGROSSED, 58 AYES SENATE GENERAL GOVERNMENT SENATE PASSED B-ENGROSSED, 27 AYES HOUSE CONCURRED, 57 AYES SPEAKER SIGNED PRESIDENT SIGNED GOVERNOR SIGNED
HB 3020
HB 3020 provides rules for distribution of member account of member of Public Employees Retirement System who dies before retiring. Requires payment to personal representative or person filing small estate affidavit if member has not designated beneficiary. Provides that death benefits and other amounts under system do not escheat to state.
Increases from $30 to $200 minimum amount that may be paid as monthly payment to beneficiary of deceased member in lieu of lump sum payment. Allows Public Employees Retirement Board to charge public employer for administration of account for lump sum payments. Makes technical changes for implementation of chapters 67 and 68, Oregon Laws 2003 (Enrolled House Bills 2003 and 2004). Delays requirement that one member of Oregon Investment Council be member of Public Employees Retirement Board. Provides that requirement becomes operative on October 1, 2007. Directs Public Employees Retirement Board to review every two years benefits provided by public employers for police officers and firefighters through other than Public Employees Retirement System. Provides exceptions to limitations on employment of retired members of Public Employees Retirement System. Allows one-time transfer of amounts in Variable Annuity Account to regular account of member under certain circumstances. Allows certain participating public employers to elect to pay lower contribution rate for period commencing July 1, 2003. Provides that election does not affect liability of employer for benefits.
HOUSE PASSED A-ENGROSSED, 55 AYES REFERRED TO SENATE GENERAL GOVERNMENT SENATE PASSED B-ENGROSSED, 28 AYES HOUSE REFUSED TO CONCUR CONFERENCE COMMITTEE APPOINTED HOUSE PASSED CONFERENCE COMMITTEE REPORT, 52 AYES SENATE PASSED CONFERENCE COMMITTEE REPORT, 27 AYES SPEAKER SIGNED PRESIDENT SIGNED GOVERNOR SIGNED
HB 2633
HB 2633 would have prohibited Public Employees Retirement Board from crediting accounts of new members with earnings in excess of four percent.
HB 2408
HB 2408 sought to prohibit active membership in Public Employees Retirement System on and after January 1, 2004.
HB 3169
HB 3169 would have established Public Employee Successor Retirement Plan for persons hired on or after January 1, 2004, who have not established membership in Public Employees Retirement System before January 1, 2004. Provides that successor plan be defined contribution plan. This bill would have required participating public employers to determine amount of contributions permitted or required for successor plan members employed by public employer, nature of benefit payable to successor plan members and other specifics of plan applicable to successor plan members employed by public employer.
DIED IN HOUSE RULES AND PUBLIC AFFAIRS
HB 3230
HB 3230 would have allowed retired member of Public Employees Retirement System to change designation of beneficiary under optional form of retirement allowances at any time before member dies. Permits only one change of beneficiary. Requires that Public Employees Retirement Board adjust anticipated benefits that would be payable to member and beneficiary to ensure that cost to system of providing benefits to member and new beneficiary does not exceed cost that system would have incurred to provide benefits to member and original beneficiary.
HB 2402
HB 2402 would have allowed public employers other than the state to withdraw from Public Employees Retirement System. The bill would have provided that person employed by withdrawing public employer who is active member of system on effective date of withdrawal ceases to be active member and thereafter is treated in manner provided by law for inactive members.
SB 258
SB 258 allows certain vested, inactive members of Public Employees Retirement System to receive 150 percent of member account balance if member withdraws account on or after July 1, 2004, and before June 30,
REFERRED TO SENATE WAYS AND MEANS SUBCOMMITTEE ON GENERAL GOVERNMENT SENATE PASSED A-ENGROSSED, 27 AYES REFERRED TO HOUSE PUBLIC EMPLOYEES RETIREMENT SYSTEM HOUSE PASSED A-ENGROSSED, 52 AYES PRESIDENT SIGNED SPEAKER SIGNED GOVERNOR SIGNED
HB 2328
HB 2328 would have eliminated limitation on number of hours that retired member of Public Employees Retirement System may be employed while receiving service allowance. This bill sought to allow retired member to elect to become active member upon reemployment.
SB 346
SB 346 would have provided for certification to Supreme Court of appeal of certain actions in which one or more cities or counties are plaintiffs, State of Oregon is defendant and appeal relates to decision of trial court on one or more claims challenging manner in which Public Employees Retirement System is administered.
HB 2401
HB 2401 allows Public Employees Retirement Board to deduct costs incurred in locating former member of Public Employees Retirement System from amounts in account of former member. The bill increases the amounts required to be paid for certain full-cost service purchases to include administrative expenses incurred by system in processing application for purchase. HB 2401 authorizes board to establish procedures for recovering administrative costs from members for services provided in estimating retirement benefit amounts and processing payments if board determines that services requested by individual member result in extraordinary costs to system. The measure also allows board to recover interest, attorney fees and other costs when overpayment or erroneous payment is made to member and board determines that overpayment or erroneous payment was not caused by system or by participating public employer.
HOUSE PASSED, 57 AYES REFERRED TO SENATE GENERAL GOVERNMENT SENATE PASSED, 29 AYES SPEAKER SIGNED PRESIDENT SIGNED GOVERNOR SIGNED
HB 2409
HB 2409 provides that Supreme Court has exclusive jurisdiction to decide appeal of certain actions filed before January 1, 2003, in which one or more cities or counties are plaintiffs, State of Oregon is defendant and appeal relates to decision of trial court on one or more claims challenging manner in which Public Employees Retirement System is administered. Declares emergency, effective on passage.
HOUSE PASSED A-ENGROSSED, 52 AYES REFERRED TO SENATE JUDICIARY SENATE PASSED A-ENGROSSED, 25 AYES SPEAKER SIGNED PRESIDENT SIGNED GOVERNOR SIGNED
SB 325
SB 325 would have renewed the limit on number of hours retired member may work and still qualify for retirement under Public Employees Retirement System if retired member is employed by sheriff of county with population of fewer than 75,000 inhabitants, by municipal police department of city with population of fewer than 15,000 inhabitants, by state or county for work in correctional institution located in county with population of fewer than 75,000 inhabitants or by Oregon State Police for work in county with population of fewer than 75,000 inhabitants. (Provisions included in HB 3020)
SENATE PASSED A-ENGROSSED, 23 AYES DIED IN HOUSE PUBLIC EMPLOYEES RETIREMENT SYSTEM
HB 3314
HB 3314 sought to direct Public Employees Retirement Board to reduce service retirement allowance of retired member of Public Employees Retirement System who is reemployed by public employer.
HB 5042
HB 5042 appropriates moneys from General Fund to Oregon Department of Administrative Services for Oregon Health and Science University. Limits biennial expenditures of department from funds and accounts related to university's Oregon Opportunity program.
REFERRED TO HOUSE BUDGET REFERRED TO HOUSE WAYS AND MEANS SUBCOMMITTEE ON EDUCATION HOUSE PASSED A-ENGROSSED, 48 AYES REFERRED TO SENATE WAYS AND MEANS SENATE PASSED A-ENGROSSED, 27 AYES SPEAKER SIGNED PRESIDENT SIGNED GOVERNOR SIGNED HB 5028
HB 5028 appropriates moneys from General Fund to Department of Higher Education for capital construction. Limits for six-year period beginning July 1, 2003, payment of expenses from proceeds of bonds and other revenue sources, including federal funds, collected or received by Department of Higher Education for capital construction. Sets expiration date on project approvals and expenditure limitations. Extends expiration date on project approvals and expenditures for specified projects approved by prior Legislative Assembly. Establishes accounts related to issuance of general obligation bonds under Article XI-G of Oregon Constitution. Authorizes issuance of lottery bonds to fund projects related to university research center.
REFERRED TO HOUSE WAYS AND MEANS SUBCOMMITTEE ON EDUCATION SJR 1 proposed an amendment to Oregon Constitution to allow issuance of state general obligation bonds for deferred maintenance, modernization and equipping of educational buildings and structures of Oregon University System. Limits amount to be loaned and indebtedness incurred to $500
DIED IN SENATE WAYS AND MEANS
SJR 7
SJR 7 proposed an amendment to Oregon Constitution to increase amount of state general obligation bonds for higher education projects that may be issued for each dollar appropriated from General Fund.
REFERRED TO SENATE REVENUE SENATE PASSED A-ENGROSSED, 29 AYES REFERRED TO HOUSE REVENUE DIED IN HOUSE WAYS AND MEANS SUBCOMMITTEE ON EDUCATION
SB 240
SB 240 would have allowed State Board of Higher Education to issue general obligation bonds to provide funds for deferred maintenance, modernization and equipping of educational buildings and structures of Oregon University System. Limits amount of bonds that may be issued in 2003-2005 biennium to
DIED IN SENATE WAYS AND MEANS
HB 3635
HB 3635 would have limited annual salaries of public officers and employees paid from state funds to amount of annual salary of Governor.
HB 2930
HB 2930 would have prohibited salary increases for state employees under certain economic and state revenue conditions. Requires eligible state employees to pay 25 percent of cost of selected health benefit plan. Prohibits public employer from agreeing to 'pick-up, ' assume or pay employee contributions to Public Employees Retirement System for persons who establish membership in system after effective date of Act.
HB 2931
HB 2931 would have provided that position in executive department that is vacant for four months is abolished.
SB 383
SB 383 sought to limit the number of persons in state management service and in certain state unclassified service to 13 percent of number of persons in certain state employment.
HB 3243
HB 3242 would have created Joint Higher Education Budgeting Board. Directs board to make recommendations to Governor and Emergency Board about appropriate level of higher education funding.
HB 3025
HB 3025 would have required State Board of Higher Education to submit any increase in incidental fees to student body for vote. Requires Oregon Health and Science University Board of Directors to submit any increase in incidental fees to student body for vote.
SB 363
SB 363 sought to allocate funds from Administrative Services Economic Development Fund to Department of Higher Education for activities under interagency agreement between Economic and Community Development Department and Higher Education Technology Transfer Fund Board.
DIED IN SENATE WAYS AND MEANS
HB 2723
HB 2723 would have directed Public Employees Retirement Board to develop and implement Deferred Retirement Option Plan. Provides that member of Public Employees Retirement System may participate in plan for not more than four years after retirement. It specified that member participating in plan is not subject to 1,040-hour limitation on post-retirement employment. DIED IN HOUSE PUBLIC EMPLOYEES RETIREMENT SYSTEM HB 2883 HB 2883 would have appropriated moneys from General Fund to Department of Higher Education for certain activities of Oregon State University Extension Service.
SB 358
SB 358 sought to direct community colleges, state institutions of higher education and Oregon Health and Science University to promote commercialization of research and ideas.
DIED IN SENATE WAYS AND MEANS SUBCOMMITTEE ON EDUCATION
SB 345
SB 345 would have abolished office of Chancellor of Oregon University System. Transfers duties, functions and powers of chancellor to State Board of Higher Education. |
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Phone: (503) 363-7084 - Fax: (503) 371-2471 - Email: pacounsel@pacounsel.org