Rep. Diehl: Detailed review of 2024 Legislature

By Oregon State Representative Ed Diehl,

Measure 110 Reform

With the passage of HB4002, Oregon has recriminalized hard drugs once again, in part reversing the failed policies that have led to drug use on our streets and in our parks and shopping malls.  It provides for supervised probation which can consist of drug treatment and recovery services. Recriminalization and required treatment reflect a hard truth – a significant portion of the unsheltered homeless are drug addicted and not volunteering for treatment.  Getting them into the treatment they desperately need is the compassionate thing to do.

The bill also gives law enforcement the necessary tools to go after drug dealers. HB5204, the funding bill for HB4002, provided much needed one-time funding to community corrections, courts, and law enforcement to help with enforcing the new “Drug Enforcement” Misdemeanor.  The bill also provided $11,500,000 to Salem’s Bridgeway Recovery Services, Inc., for the development of the Bridgeway Medical Center and substance use disorder treatment residential facilities.

HB4002 started as a very weak attempt at reform.  And it would have stayed that way if not for Republican resistance, a huge public outcry, and the threat of a ballot measure to take the issue to the voters.

While there are good things in this bill, there are also some serious flaws.  That means the battle to reverse the damage from Measure 110 is far from over.  Without local leadership willing and able to enforce this new law, and without adequate resources for treatment and recovery, it will fail.  The bill kept all the long-term funding in the hands of a group of unelected bureaucrats that do not believe in recriminalization or required treatment, and are more focused on destigmatizing drug use than getting people clean.  They would like nothing more than to have recriminalization fail – and they control the purse strings.  This tells me that Democrat leadership is not yet ready to let go of the east-coast Drug Policy Alliance vision of recriminalization, despite overwhelming public outcry to the contrary.  You can read more about my concerns in this prior newsletter.

Click here to WATCH my floor speech for HB4002

Housing and Homelessness

NOTE:  housing and homelessness are two different, overlapping issues, and in my opinion our Governor and the legislature are making a mistake by lumping them together.

The Governor’s top priority this session was housing and homelessness. Governor Kotek’s housing bill failed last session, so she brought back a heavily reworked version this short session and it passed both chambers.  SB1537 and SB1530 dedicate $376M to housing infrastructure, a developer revolving loan program, homeless shelters, short-term rent subsidies to protect against eviction, and addiction recovery housing, among other things.  There are also state supports in place to assist cities with urban planning.

One of the more contentious issues around these bills is a one-time exemption to Oregon’s long-standing land use laws.  For a few years, cities can expand their urban growth boundary (UGB) one time.  Up to 100 acres for cities with a population greater than 25,000, and 50 acres for smaller cities.  Exclusive Farm Use (EFU) land is off limits and cannot be brought into the UGB – the expansion is limited to Urban Reserve areas.  The decision to expand the UGB is left up to each city with approval by the county, and there are strict guidelines for the decision-making process.

I’m not a fan of much of this policy.  I don’t believe the state should be in the housing loan business, and some of the programs are so overly restrictive that I don’t believe any developers will take advantage of them.  I believe the state’s role is to develop infrastructure so free-market housing can be built, preferably with Oregon timber (that’s another story, you can read about the disastrous impact of the Habitat Conservation Plan here.)  The bill also sends millions of dollars in homeless prevention services to Portland, while the city is already sitting on hundreds of millions in local tax dollars they haven’t figured out how to spend. (New Figures Show Multnomah County Still Isn’t Using the Homeless Services Tax Money Metro Covets )

A Baby Step Toward Fiscal Restraint

SB1562 increased the cap on our rainy-day fund.  Oregon has a constitutionally mandated balanced budget process: every two years the state estimates tax revenues, and the spending budget is set to stay within that projection.  Each budget cycle, money is put toward the rainy-day fund, the state’s financial reserve fund, which may be tapped into if tax revenues fall short of projections.  Note: this did not reduce the kicker, and I will continue to protect your kicker!

Wins for HD17!

Two bills brought much-needed tax relief to victims of recent wildfires.  SB1520 exempts wildfire lawsuit settlements from state taxation.  And SB1545 resets property taxes for rebuilt homes to pre-fire rates.  If a homeowner rebuilt with the same or smaller square footage, the new home will be assessed at a special value equal to the home’s pre-fire value.  This could cut the new home’s property tax in half or more in many cases.  Counties are provided the option to adopt this assessment adjustment, and I fully expect both Marion County and Linn County to embrace it.

SB1545 is like two bills from the 2023 session, however it has some limitations that I’m committed to working through in the 2025 session.  Our bills in 2023 would have provided tax relief for homeowners who built a larger home: the special assessed value would be applied to the original square footage, and the normal value would be applied to the rest of the home.  I’m concerned that SB1545 as written will restrict many rebuilders from taking advantage of the program.

HB4011 fixed a loophole in the farm equipment tax law.  It removes the distinction between
tangible personal property and real property, making all farm equipment tax exempt. It reduces confusion and administrative work for farmers and won’t have a large financial impact on county budgets.

We also garnered much-needed infrastructure funding.  HB5201 allocated an additional $4M to the City of Aumsville for a new wastewater treatment plant and related improvements, adding to the $5M granted from the 2023 session.  And SB1530 granted $3M to the City of Stayton for sewer infrastructure improvements along Ida Street and Marion from Evergreen to 4th.  If you read these omnibus funding bills (and I encourage you to) you will find a few things you like, and a lot of things that you don’t – I know I did.  Like it or not, that’s how the budgeting process works.

Moving Towards School Choice in Oregon

For the first time that I am aware of a School Choice bill was granted a hearing!  HB4161, a bill I co-chief sponsored with several other colleagues, would establish Education Savings Accounts (ESAs) for low to moderate income families, expand the charter school enrollment cap, and allow open enrollment in public schools.  We had some amazing testimony in support of the bill, including testimony from Deanna Tappia.

Click here to watch her powerful testimony on X, or Watch on YouTube.

School Choice is spreading across the country and it’s only a matter of time before it comes to Oregon.  Expect to see similar legislation brought forward again in 2025, and with growing support!

Campaign Finance Reform

One way or another, campaign finance reform was coming to Oregon.  HB4024 headed off two campaign finance reform initiative petitions destined for the 2024 ballot.  The bill is a compromise between lobby groups, trade unions, and other special interests on both sides of the aisle.

Currently in Oregon an entity (individual, corporation, interest group, or union) can give an unlimited amount of money to a candidate.  This bill attempts to reign that in.

In a nutshell, individuals and corporations would be limited to giving a candidate no more than $3,300 per election, or $6,600 for a candidate who appears in both the primary and general. Small donor political committees that accept up to $250 per year from individuals, could give up to $10 per donor per election to statewide candidates and $5 per donor per election for other candidates. And unions and other membership organizations could give $26,400 per election to a statewide candidate and $13,200 per election to non-statewide candidates.

It will not take effect until 2027 so expect some ‘tweaking’ in the sessions ahead.

Small Business Wins!

SB1575, the “Duty to Defend” bill, fixes contractual language for design and engineering firms working government contracts so they are only liable for their scope of work.  This will provide much-needed relief for many small businesses that were either kept out of these government construction projects, or taking them on with the risk of losing it all if something on the project, completely out of their control, went wrong.

We successfully killed HB4130, a bill which would have banned the corporate practice of medicine in Oregon.  On the surface, this bill sounds like a good thing – we want our health care providers to be locally owned and operated, preferably by those delivering the care.  However, the bill did nothing to get at the root cause of why practitioners are selling their practices.  And it made many existing health care businesses illegal.  Instead of increasing access to care HB4130 would limit it.  You can read my testimony in opposition here.

Bad Bills That We Made Sure Died

SB1583 was a divisive bill that stripped away more local control of our schools.  The bill would have limited a school board’s control over curriculum and library content.  This bill was dubbed the “anti-book ban bill” by the press, and something that protected students from discrimination.  Students are already protected from discrimination – this bill was just one more attempt by the state to deny parents the right to direct their child’s upbringing.  Fortunately, we successfully killed this bill by introducing an alternate version of the bill (called a Minority Report) and running out the clock until session ended.

SB1522 was also killed, this one by an overwhelming NO vote on the floor of the house.  The bill would have limited the state’s ability to civilly commit a person with an intellectual/developmental disability that was a danger to themselves or others.  You can read my floor speech in opposition here (credit to Marion County District Attorney Paige Clarkson for much of the content of this speech.)

Bad Bills that Passed

This session saw some awful bills that were highly partisan and not fiscally responsible.

SB1578 directs the Oregon Health Authority to fund and support a non-profit to operate a scheduling and billing system for medical translators. Medical translators are already used successfully in Oregon, there are several private organizations that do it well.  This bill, heavily supported by labor unions, uses public money to establish a competing organization.  You can see where this is going – your tax dollars are being used to prop up a separate business that will charge us more for delivering the same service. What’s more, the non-profit that will get the funding (according to testimony) is Unite Oregon, a partisan, activist organization.

HB4129 is a similar special-interest giveaway.  This bill takes hundreds of millions of tax dollars to establish two separate businesses that will employ certain homecare workers.  Currently, people living with disabilities, or needing support as they age, can employ contract homecare workers paid by the state through the Oregon Health Authority.  Since they are contractors and not direct state employees, they are not part of a union.  HB4129 attempts an end around by using your tax dollars to prop up two businesses that would offer to hire these contractors.  Propping up these two businesses takes $54 million of state funding and $99 million in federal funding over two years.  It does not add a single homecare worker!  It is a gross misuse of public dollars.  Read my full floor speech here.

HB4083, the COAL act, directs the State Treasurer to divest state investments, including public pensions, from thermal coal companies, or any fund containing a thermal coal company.  I believe that our State Treasurer should always act in the fiduciary interests of the fund, and not in the interests of activist groups with a different agenda.  This type of activist investing puts pensioners and taxpayers at risk.  That’s why I introduced the PERS Protection Act (HB3219 2023) last session and will bring it back for reconsideration in 2025.

Raising Constitutional Concerns

This session I raised serious constitutional concerns on two bills.  Both appear to violate the Equal Protection Clause of the 14^th Amendment because they use public money in a discriminatory way.  Both bills died in part because of our efforts.  However, the discriminatory language in question is in existing statute – both bills were adding funding to discriminatory programs already in place.  And prior testimony confirms the blatant discrimination in these programs.  I’ll be sharing more on this later, however you can read the thoughtful legal opinion from the non-partisan State of Oregon Legislative Council here and here.  Oregon is currently being sued for using public funding in violation of the Equal Protection Clause related to other similar legislation.  This is only the tip of the iceberg based on what I’ve seen; expect many more lawsuits to come and at taxpayer expense.