LOC News

2022 Legislative Short Session Starts February 1

Content and outcomes for a 35-day “short session” of the Legislature have proven hard to predict since the session became part of Oregon’s legislative cycle more than a decade ago. At the time, the selling point for adding short sessions was they would be confined to emergency needs and budget adjustments. It’s safe to say that the initial promise did not last beyond the first short session, as significant policy discussions have become the norm during the short session cycle.

The 2022 session will be unpredictable, and it will be virtual. A combination of the high COVID numbers and the ongoing construction at the Capitol prevent an in-person session from taking place. The factors that will influence the session will largely be driven by the politics of the race to determine our next governor. It’s a loaded election, with several contenders who were recently members of the Legislature. The most notable may be Senator Betsy Johnson, who since 2018 was the co-chair of the Joint Ways and Means Committee. Senator Johnson declared her run for governor this past fall, and in December resigned her Senate seat to focus on the run for the governor’s office as an unaffiliated candidate. In addition, former House Speaker Tina Kotek and former Minority Leader Christine Drazan also announced their run for governor last year, and subsequently resigned from the House of Representatives in January.

Meanwhile, longtime Senate President Peter Courtney announced in January he will not seek reelection in 2022. Senator Courtney has been in office for more than two decades and has served as Senate President since 2003. Speaker Kotek has also been a long-standing member of the Legislature, serving since 2006 and becoming Speaker of the House in 2013, and Oregon’s longest-serving speaker. For many lobbyists, Representative Kotek and Senator Courtney are the only caucus leaders they have worked with. For the 2022 session, Rep. Dan Rayfield has been nominated as Oregon’s next House Speaker. His nomination requires a floor vote once the session is underway on February 1. Add in redistricting of legislative seats and a full slate of new faces in the Legislature, Oregon will indeed face a very unpredictable future for setting legislative policy.

To start her final year in office, Governor Brown has initiated a workforce training focus for 2022 with a funding request of $200 million. Any infusion of funding into training programs will be a welcomed investment from the state. It’s also something that can have a high return on investment. Programs that provide skilled training can typically pay for the costs in less than 12-18 months with just the income tax generated from the higher paying jobs.

Pursuing Priority Issues for Cities

The League of Oregon Cities will enter the 2022 session as partners with several organizations to advance support for core city services. Part of our focus will be on a local coordinated homeless response pilot program from Rep. Jason Kropf of Bend. We will also be advancing legislation with the Association of Oregon Counties (AOC) to provide authority to cities so the local marijuana tax can be raised from 3% to 10% with voter approval. In addition, we’ll be supporting efforts for additional funding and services to deal with the illegal cannabis grow operations in Oregon. These items and others are highlighted below from the LOC’s advocacy team.

Land Use and Housing

On the land use front, the LOC is tracking several bills under development for the short session, including two proposals that will be familiar to cities from previous sessions. The LOC opposed HB 3072 in the 2021 session, which would have required a local government to amend its urban growth boundary upon a petition from a landowner to include land if it is designated as an urban reserve, and amend its comprehensive plan to allow the land to be used for workforce housing. The new vehicle for 2022 is HB 4118. While the LOC would welcome a legislative workgroup to reexamine the UGB expansion process, this bill: lacks important connections to provision of urban services; would create extra work for cities to update land use planning; and does not include any guarantees that the bill would create more affordable housing.

A second bill aims to revisit HB 2306 with HB 4063 in 2022. HB 2306 was enacted in the 2019 legislative session and prevents a city from denying a building permit on the basis that the supporting infrastructure is not completed in a subdivision. If a residential subdivision is built, the city must have a process to allow the builder to seek building permits upon “substantial completion” of the infrastructure required as a condition of development. Substantial completion is defined as a completed water system, fire hydrant system, sewer system, storm water drainage (but not including the landscaping that might be included), curbs, demarcation of streets so emergencies responders can navigate, and roads to the condition they can be accessible to emergency vehicles. The Oregon Homebuilders Association has raised concerns that some jurisdictions are not meeting the requirements of the 2019 law and is seeking additional clarification in statute. The LOC is working with our local government partners to ensure any proposed language would effectively improve development timelines without posing unintended consequences for public safety, stormwater management and underlying infrastructure, and protect future homebuyers from risk. This bill is expected to be introduced in the House as a Housing Committee bill.

The LOC is also providing feedback on another expected House Housing Committee bill that aims to remove barriers to developing manufactured housing and manufactured housing parks. Two technical fix bills are expected as well, including a technical fix to SB 8, the affordable housing development bill that passed in 2021, and a bill to extend the reporting deadline for the system development charge (SDC) study bill that passed in 2021.

The LOC is partnering with the AOC to develop a bill to pilot local capacity funding to support city-county coordinated homeless response efforts. Representative Jason Kropf is sponsoring HB 4123 that establishes locally led, regional housing coordination through eight pilot communities across the state. Each pilot would receive $1 million in state funding over two years to operationalize coordinated offices to strengthen their communities’ homeless response by: providing high-level coordination, centralized communication, and strategic visioning; identifying opportunities to more effectively leverage existing funds and access new resources; and creating a more equitable, accessible and responsive system for their residents experiencing homelessness. The LOC is excited to support this effort that will bring much-needed capacity to the following communities:

Benton County/City of Corvallis
Coos County/City of Coos Bay/City of North Bend
Deschutes County/City of Bend/City of Redmond
Hood River County/Wasco County/Sherman County/City of The Dalles/City of Hood River/Mid-Columbia Community Action Council
Lincoln County/Lincoln City/City of Newport/City of Toledo
Polk County/Falls City/City of Monmouth/City of Independence/City of Willamina/City of Dallas/Confederated Tribes of Grand Ronde/Mid-Willamette Valley Community Action Agency
Tillamook County/City of Tillamook/Bay City/City of Garibaldi/City of Rockaway Beach/City of Wheeler/City of Manzanita/Community Action Resource Enterprises Inc. (CARE)
Umatilla County/City of Hermiston/City of Stanfield/City of Echo/City of Umatilla

Marijuana Taxation – Making Up the $50 Million Gap

For the 2022 legislative session, the LOC’s position on marijuana taxation generally remains the same as it was in 2021. First, the LOC and the AOC are requesting the state backfill the $50 million local governments are projected to lose over the current biennium due to Measure 110 changes in distribution of state marijuana tax revenues. We are open to other ideas, but feel the most straightforward way this could be accomplished would be to distribute a greater percentage of the capped quarterly amount of $11.25 million to cities and counties and allow the cap to increase with inflation and SB 1506 is this vehicle. This could be a long-term solution to put local government funding back to the level seen before Measure 110.

Second, consistent with our position even before the passage of Measure 110, the AOC and LOC are requesting that local residents be provided the opportunity to vote to increase their local marijuana taxes up to a new cap of 10%. We feel that local taxes are less likely to be diverted in the future to other legislative priorities, and local residents are best positioned to understand the needs of their specific communities.

We are sensitive to the concerns of the marijuana industry but remind them that this tax on consumers is passed through by the retailer. Industry numbers on total tax rates speak to an issue with federal income tax regulations, not local sales taxes. The LOC will continue to lobby for changes at the federal level to allow income tax deductions by marijuana businesses of ordinary business expenses. Washington provides the best empirical example of a state increasing its retail marijuana tax, and unbiased academic research papers by the University of Oregon and UCLA/Yale do not support the bill opponents' projections around a rush to the black market. Even with a local tax of 10% and a state tax of 17%, Oregon’s tax would still be well below Washington or California’s.

Public Safety – Illegal Cannabis Grows

The LOC is anticipating several bills in 2022 to address ongoing criminal and public health concerns with the increase in illicit cannabis production. Illegal marijuana production and distribution continues to create human, environmental and economic damage to the state and its residents. Large scale growing operations have disrupted the legal cannabis market while relying on forced labor and water theft. Legislators are poised to pass legislation that will provide additional tools and resources for state and local governments to combat the problem. While some bills are in response to the ongoing crisis in Southern Oregon, enforcement tools and some requirements will be applicable statewide. Thus far, the LOC is aware of draft legislation that will do the following:

HB 4016 – Expands the existing lien statute that will allow properties where criminal activity is taking place to be sold to pay for criminal fines and cleanup costs; requires cannabis laboratory workers to have worker permits;
HB 4061 – Increase the criminal and civil penalties for water theft or illegal water usage; clarifies that the Oregon Liquor and Cannabis Commission (OLCC) and the Oregon Department of Agriculture have the authority to revoke production licenses for violations of water law; require applications for cannabis grows to verify they have legal access to water and verification from the Water Resource Division (WRD) and increase staffing for WRD to research water rights; and
HB 4074 – Requires reporting of human trafficking activities by cannabis licensees and permit holders; expands an existing taskforce to address illicit cannabis activity to include a focus on human trafficking and forced labor.

Reach Code Local Option

Under current state law, cities are preempted from adopting local building codes. In 2009, legislation was passed to implement a new, optional code, a Reach Code, that would allow developers to exceed statewide codes and streamline the construction of energy efficient building. The Reach Code is optional for builders, but a local government can’t mandate a builder to use it. SB 1518 would allow a city to adopt the Reach Code within their jurisdiction to promote additional energy efficiency for new structures. If a city does not wish to adopt the Reach Code, the statewide code would remain in place. This was a priority of the LOC Energy Environment Committee that was on the 2021 LOC legislative priority ballot, so the LOC will support this bill in 2022 session.

Broadband Omnibus

This legislation would ensure that a system of robust, sustainable, and statewide broadband services connect Oregonians into the future. It prepares the Oregon Broadband Office (OBO) for the work ahead. HB 4092 does the following:

Updates membership of the Oregon Broadband Advisory Council (OBAC) and gives new authority for them to work more directly with OBO;
Sets a strategic framework for state and federal broadband investment; creates criteria for Oregon to work with providers to collect appropriate information and develop accurate statewide maps for identifying gaps and implementing broadband goals;
Creates a State E-rate fund for libraries similar to the School E-rate fund; and
Creates a PUC study on modernizing the Oregon Telecommunication Assistance Program.

Cybersecurity Center of Excellence

The LOC has been working with many stakeholders and Rep. Nathanson on a cybersecurity bill that has been adopted as a Joint Information Management and Technology committee bill. LC 261 would:

Create a Cybersecurity Center of Excellence (CCOE) that is jointly housed and hosted by universities and/or public bodies. The CCOE would be staffed with 3 FTE to get it off the ground. This concept was first floated in the introduced version of SB 90 (2017);
Revise the Oregon Cybersecurity Advisory Council (OCAC) membership and mission, and provide that the new iteration of the OCAC be a governing body for the CCOE;
Create a Workforce Development Fund; and
Create a Cybersecurity Grant Fund for public bodies. The LOC and other local government stakeholders will request $5 million for this fund biennially. However, the creation of this fund is important because could be supplemented with federal dollars. In the next few years, Oregon is set to receive around $15 million total from the State and Local Cybersecurity Improvement Act that was adopted in the larger Infrastructure Investment and Jobs Act.

Last Updated 1/28/22

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