Seven of the largest Oregon counties would have more control over how revenue from forfeited property is spent under legislation approved by the House late Wednesday.

House Bill 3440 was approved 52-0 with eight lawmakers excused. The bill now goes to the Senate. 

The measure lowers the county population threshold that allows county commissioners to pool and direct revenue from the sale of forfeited property and mineral rights and direct the spending toward specific programs or projects such as homelessness prevention. 

Current law requires foreclosed property sales revenue to go proportionately to each taxing district in a county. The funds can go to fire, library and other services. The law exempts counties with a population over 650,000. Multnomah County — with a current population of 810,000 —  is the only one of the 36 counties in the state that meets the current population criteria.

If HB 3440 is approved by the Senate and signed by Gov. Tina Kotek, the threshold would be lowered to 200,000 population. The list of eligible counties would expand to include six more of Oregon’s largest counties: Washington, Clackamas, Lane, Marion, Jackson and Deschutes.

The law is written so that the plan is “opt-in,” meaning counties do not have to adopt the change if they want to continue to divide the proceeds among taxing districts. The affected counties can also use the funds to target priorities other than homeless issues. 

The bill’s biggest boosters have been from Deschutes County, which at 210,000 population would be the smallest of the counties given the new authority. Rep. Emerson Levy, D-Bend, is a chief co-sponsor and carried the bill on the House floor, where she had the first and last word on the bill. Rep. Tom Andersen, D-Salem, is the co-sponsor.

Levy has credited Deschutes County Commissioner Phil Chang with championing the idea that has drawn bi-partisan support in the frequently partisan Legislature.

The bill was approved 9-0 on March 27 by the House Committee On Agriculture, Land Use, Natural Resources, and Water.

The annual revenue from forfeiture sales is relatively small for counties. Chang testified March 27 that after forfeiture auction fees and administrative costs are covered, the legislation would create between $200,000 to $400,000 per year in combined revenues for Deschutes County.

The upside for counties is that the law creates a consolidated stream of money that’s not dependent on the up-and-down funding of the state’s two year budget cycles. Chang said if the bill is approved, the taxing districts will have formal talks on pooling the money to be used for housing placement or rehousing of people experiencing homelessness, rental assistance and development of new low-income housing. 

“HB 3440 could help Deschutes County establish a long term funding source for homelessness prevention and reduction efforts,” Chang told the committee. 

Levy said taxing districts would forego a small slice of the revenue. But put together, it can make a substantial difference in dealing with a targeted problem like homelessness.  

“We believe that targeting pooled funds at the housing needs of youth and families may be more beneficial for our communities than receiving the proportional slices that our taxing districts are currently receiving,” Levy said. 

Chang said the homelessness issue affects many of the taxing districts in different ways that the pooled fund could help address.

• School board and community college directors believe it will help students’ ability to show up to school ready to learn.

• Library board members say their facilities would benefit if not used as a day shelter or place to bathe.

• Rural fire district board members say the plan could lead to less ignition risks and less difficult emergency transports of homeless individuals in the “urban-wildland interface.”

• City councilors in the county are already struggling to provide sufficient shelter space and services.

The committee received letters of support for the bill from Bend Mayor Melanie Kebler and several community members who served on fire and library boards or as court-assigned special advocates for students living in foster care. 

The bill will get its first reading in the Senate within a few days and then be assigned to a Senate committee, which would hold a public hearing and vote on whether to recommend the bill for final passage. Under Legislature’s rules, the bill would have until May 5 to be assigned a date for a vote by the committee. The bill would have to be sent to the full Senate no later than May 19. 

Senate Republicans have used parliamentary rules and protracted comments on legislation to stymie attempts by the majority Democrats to move a long list of bills to passage. The Senate’s agenda on April 11 included bills that were originally scheduled to receive a final vote as far back as March 22. 

Under the constitution, the Legislature must adjourn no later than June 25. Democratic leaders have a “target” final day of June 15 to end business. 

Oregon’s 10 largest counties by population

1.   Multnomah      820,672

2.   Washington     605,036

3    Clackamas      425,316

4.   Lane               382,647

5.   Marion            347,182

6.   Jackson          223,827

7.   Deschutes       203,390

8.   Linn                130,440

9.   Douglas           111,694

10. Yamhill            108,261

Source: Oregon Blue Book, 2023