Informational hearing on SB 5511 highlights reinsurance renewal and IT modernization at DCBS

Good afternoon. The Transportation and Economic Development Subcommittee opened an informational hearing in February on Senate Bill 5511, the budget bill for the Department of Consumer and Business Services (DCBS). Patrick Heath of the Department of Administrative Services’ Chief Financial Office and DCBS Director Andrew Stolfi presented the governor’s proposed highs and lows for the 2025–27 biennium, answered committee questions and outlined policy drivers behind the request.

Why it matters: DCBS regulates insurance, building codes, workplace safety and related markets that affect nearly every Oregon household and many local governments. The governor’s proposal would restore a large reinsurance payment stream that phases out in the current service level and would fund multi‑year IT modernization projects and targeted staffing to support regulatory work and consumer assistance.

The budget picture: Patrick Heath told the committee the current service level budget is $569,700,000 in total funds compared with a 2023–25 legislatively approved total of $783,900,000 — a $214,200,000, or 27.3%, reduction driven largely by the scheduled expiration of the Oregon Reinsurance Program. Heath said, “The Governor’s budget supports a policy to renew those assessments and to renew that program.” The governor’s recommended budget includes about $230,000,000 total funds for the reinsurance program in 2025–27.

Major investments and shifts: Director Stolfi summarized DCBS priorities and how the agency is funded. He described roughly $406,000,000 in estimated agency operating expenses, and noted DCBS expects to collect about $1.6 billion in revenue, much of which transfers to other state uses. Stolfi told the committee that the agency is requesting funding for: - Reinsurance program restoration (as noted above). - Workers’ compensation technology modernization (roughly $13,500,000 other funds) and a $2,500,000 request for the Workers’ Compensation Board’s case management modernization. - Investments in Oregon OSHA outreach and enforcement and a $2,200,000 package for Building Codes Division support tied to housing goals. - A proposed one‑time $15,000,000 transfer from the Workers Benefit Fund (WBF) to the Bureau of Labor and Industries (BOLI) to support workplace investigation programs; Heath and Stolfi said the transfer is identified as a one‑time payment and would come from the WBF balance.

Funding flows and transfers: Stolfi walked the committee through transfers DCBS programs make to other state accounts. He said the Division of Financial Regulation (DFR) transfers excess revenue to the state general fund (about $224,000,000 estimated), that a 2% insurer assessment is expected to generate approximately $510,000,000 for the Oregon Health Plan, and that other transfers include county building inspection support and transfers to the state fire marshal (figures presented at the hearing: roughly $600,000 to counties and about $43,000,000 to the fire marshal, as described by Stolfi).

Budget risks and policy context: Stolfi and Heath repeatedly told the committee that DCBS is primarily an other‑funds agency and that macroeconomic fluctuations — especially hours worked that fund the WBF — and enrollment or permit volume declines can materially affect revenue. They also stressed multi‑biennium IT modernization needs, the risk posed by legacy systems, and the agency’s strategic planning priorities including customer service, equity, and technology.

Next steps: Committee members pressed for more granular FTE and workload data tied to each policy option package (POP). Stolfi and staff said detailed FTE and POP justification would be provided in the subsequent presentation and in supplemental materials posted on OLIS. The committee recessed the informational hearing to continue DCBS testimony the following day; no formal votes were taken at this session.