SENATOR DAVID NE LS ( >N : L E G I S L A T I V E R E P O R T 2 0 0 3
J o b s , J o b s , J obs . . .
Working To Strengthen Our State’s Economy
Fixing Oregon’s Aging Transportation Infrastructure: Legislators worked
hard this session to get serious about fixing Oregon’s aging transportation
system. In order to effectively enable commerce to move crops and
manufactured products to markets or to meet other forms of transportation, it
is time to invest in roads and bridges. And in addition to bridges, selected
modernization projects and some much needed maintenance and preservation
projects for cities and counties will be funded.
The $2.5 billion package will provide the largest public works project in
Oregon since 1-5 was built over 50 years ago. This legislation will go a long
way toward fixing aged bridges, moving products more efficiently, providing
some new roads in strategic places around the state and in creating family
wage jobs - helping Oregonians back to work.
In other legislation, the Oregon Innovative Partnership Program is
established. The Department of Transportation is directed to establish the
program to solicit, accept and evaluate proposals for transportation projects
from private entities and units of government. The legislation creates
financing mechanisms, including, but not limited to the imposition of
franchise fees or user fees and the development or use of other revenue
sources. When considered as a component of the transportation infrastructure
improvement package, it will allow greater flexibility for transportation
projects and will allow projects to be completed sooner with a lower cost to
the taxpayer.
A complete rewrite of the public contracting statutes resulted from an
interim workgroup. Over the years, revisions of the statute created
contradictory and confusing language. The new legislation consolidates
over-arching provisions, definitions, policy statements and contract
preferences in one location; outlines and makes consistent source selection
process for procurements; and reorganizes current law to reflect current
practices.
Streamlining government regulation: In discussions with business leaders
around the state and community leaders in my senate district, I heard many
highlight the need for consistent and simple regulatory and permitting
processes. My colleagues and 1 supported the creation of an Economic
Revitalization Team in the Governor’s office to identify adequate land that
can be developed quickly to meet the need for “shovel ready” industrial lands
for businesses wishing to locate in
Oregon. Legislators directed the
Department of Agriculture, the
Economic and Community
Development Department, the
Division of State Lands, the
Department of Transportation,
the Department of Land
Conservation, the Department of
Environmental Quality and the
Housing and Community
Services
Department
to ,
"With enactment of these bills, Oregon's business , participate
. .
, support _ the
and
community will see a marked change in the speed . .
,
,
Of obtaining building permits, the cost of
development of an inventory of
construction and the availability of land for
up to 25 priority sites throughout
development.” Says Senator Nelson, Chair of
the State.
Senate Business & Labor Committee
Oregon Moves Towards Single Sales Factor: In another strong signal to
businesses within the state that we want them to hire more Oregonians and
invest in new facilities in Oregon, we passed legislation that will move Oregon
toward a single sales factor corporate tax apportionment. It uses a less
complex apportionment factor formula and removes the disincentive for
Oregon businesses to expand. It makes Oregon a more attractive location for
corporate headquarters.
Clarification Of State Building Codes: Government accountability and
efficiency was a major theme throughout the session. The Department of
Consumer and Business Services Director is now authorized to initiate
adoption of rules to clarify provisions of state building codes and the
department is permitted to establish a system or network for providing access
to building code information and services for all building code jurisdictions
within the state. Another measure requires the Director of the Department,
upon request, to determine whether adequate resources are available to ensure
that essential projects proceed in a timely, consistent and flexible manner.
Other construction/contractor measures will allow contractors to use one
form, pay one fee and obtain one license, instead of the current chaotic
approach. Large, unique and expensive industrial electrical equipment is now
exempt from costly and duplicative certification and evaluation.
Increasing Efficiency In Collecting Outstanding Debt: State collection
of outstanding debt has been somewhat unproductive and citizens call for a
change. Therefore, the legislature modified the state’s current debt collection
system, creating a more effective way to collect on past due accounts. State
agencies currently turn over delinquent and liquidated accounts to the
Department of Revenue or a private collection agency after a year of
non-payment. A measure passed this session forces state agencies to turn over
accounts after they are delinquent for 90 days and would give the Department
of Revenue six months to collect payment. Furthermore, agencies are
encouraged to utilize private collection agencies in the pursuit of delinquent
accounts.
Support for Tourism: The legislature gave support to the tourism industry
by passing a 1% lodging tax to ensure additional resources for tourism and
marketing; Oregon is a great place to set up business or to visit. This is a
positive move toward attracting visitors and giving them knowledge about our
state, thus encouraging them to stay longer and visit more communities.
Oregon Universities & Community Colleges Provide Workforce:
Legislation this session provides the Oregon
University System with greater flexibility in
maintaining quality access including the
approval of new degree programs and
changes a multitude of regulatory
inefficiencies that will allow better service to
the state. Investment in Community
Colleges increases their ability to serve
Visiting with BMCC staff, board and growing numbers of people who desire to
President at a reception honoring
continue their education and to meet the
legislators for their support of
of employers seeking qualified workers.
education and BMCC partnerships. needs
Legislators encouraged the expansion and
availability of engineering education, nursing education, and technology
education with use of distance learning. A student educated in northeastern
Oregon is more apt to make it home and place of work.
PUBLIC EMPLOYEE RETIREMENT SYSTEM (PERS) REFORM
PERS R e f o r m ; S ix M e a s u r e s P a s s e d &. S ig n e d : After hours of public hearings and
studying the issues, the legislature passed measures that would change the system for
new employees and get the system back on course. It is important to note the
measures as passed and signed by the Governor; however, it is also important to note
that some of the measures have been challenged and are on their way to the Oregon
Supreme Court for consideration later this year or early next year.
ASSUMING THE n e w la w s hold u p in court, PERS is prohibited from crediting
regular accounts of Tier One members with earnings in excess of the assumed rate
(currently estimated at 8% earnings). It has been estimated that this bill could shave
nearly $1 billion from the PERS system’s existing unfunded liability, and could result
in reduced rates for employers in the system, saving them approximately $201.8
million in 2003-05. Local Governments’ (cities, counties, special districts) share of
that savings is estimated at $60.2 million.
SEVERAL LAWSUITS were filed by employers, claiming that the PERS board violated
its fiduciary responsibility when it made a number of decisions that resulted in higher
employer rates. Marion County Circuit Court Judge Paul Lipscomb (City of Eugene et
al v. State of Oregon, cases 99C-12794,0OC-16173,99C-12838 and 99C-20235)
agreed with some of the plaintiff’s arguments, particularly regarding implementation of
mortality tables, earnings credited in excess of the assumed rate in 1999 and employer
match of variable accounts. Many of the concerns addressed in these cases were
addressed in legislation. The total savings of implementing this measure are estimated
at $677.6 million for the 2003-05 biennium.
“ACTUARIAL EQUIVALENCY factor tables” include life expectancy (mortality) and
future earnings assumptions. PERS uses these tables to calculate monthly retirement
benefits. Prior to this legislative session, the PERS Board used some mortality
assumptions dating to 1978 to calculate retirement payments for employees hired
before 1999. Recent studies of mortality show that people are living longer than was
predicted in 1978. This means that retirement benefits are calculated higher than
they would be if current mortality tables were used, resulting in higher benefits paid
over a longer life span than had been predicted. New legislation requires the PERS
Board update actuarial equivalency factor tables every two years.
ANOTHER NEW LAW streamlines the decision process for employee benefits
management. Membership of the Public Employees Retirement System Board is
reduced from twelve to five members. Further, it specifies membership of the board as:
three persons with experience in business management and/or pension management
(they may not be members of the system or beneficiaries of the system, and have no
interest in the benefits provided by the system); one member that represents public
employers; and one member that represents public employees.
SURSEQUENTLY, there is the PERS Successor Plan, the Oregon Public Service
Retirement Plan (OPSRP) for all newly hired public employees. It is a hybrid plan
composed of two separate account programs, a pension program and an individual
account program. It is designed as the successor to PERS Tier’s one and two and has
no effect on members in those retirement systems, only new employees.
T he SUCCESSOR Pi .AN requires all public employers participating in PERS to
participate in OPSRP and allows new employers to join the Defined Benefit or
Defined Contribution plan or both. The PERS Board may contract with a private
provider for administration of individual Account Programs to further reduce
administrative costs. The estimated savings of the new' plan over the old will save
Oregon $31 million in the 2003-05 biennium and $103 million in 2005-07.
C om po n en ts of th e T w o A c c o u n t P rogram s
The Pension Program
Employee is vested after 5 calendar years
Police and Fire is 1.8% of final average salary
General Service 1.5% of final average salary
Nonnal Retirement 65, or 58 with 30 years service
Equivalency factor tables adopted every two years
GOLA capped at 2%
The Individual Account Program
Employee must work 6 months before membership
Requires member to make employee contribution of 6%
Allows employer to pay employee contribution
Requires employers currently paying employee contribution to continue til Dec. 31, 2005
Allows employers to make voluntary contributions of 1% to 6% of salary