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83rd OREGON LEGISLATIVE ASSEMBLY--2025 Regular Session
House Bill 2968
Sponsored by Representatives GAMBA, JAVADI, HARTMAN; Representatives LIVELY, WRIGHT, Senator PHAM
K (Presession filed.)
SUMMARY
The following summary is not prepared by the sponsors of the measure and is not a part of the body thereof subject
to consideration by the Legislative Assembly. It is an editor’s brief statement of the essential features of the
measure as introduced.The statement includes a measure digest written in compliance with applicable readability
standards.
Digest: The Act makes OHCS guarantee a local government’s collection of a fee to be paid by
a home builder on a delayed schedule. (Flesch Readability Score: 62.1).
Requires the Housing and Community Services Department to guarantee a housing developer’s
payment of system development charges that the local government has agreed to defer until after
occupancy. Allows the department to assess a civil penalty and interest against defaulting develop-
ers. Allows the Department of Revenue to pursue collections against developers. Becomes operative
on January 1, 2026.
Establishes the Municipal Development Protection Fund for such purposes. Appropriates moneys
to the fund.
Declares an emergency, effective on passage.
A BILL FOR AN ACT
Relating to housing; and declaring an emergency.
Be It Enacted by the People of the State of Oregon:
SECTION 1. Sections 2 and 3 of this 2025 Act are added to and made a part of ORS
chapter458.
SECTION 2.(1) The Housing and Community Services Department shall purchase from
a local government the right to collect a past-due debt from a developer, if the debt is based
on a deferred system development charge as described in subsection (2) of this section. In
purchasing a debt under this section, the department shall pay the unpaid balance of the
debt.
(2) For a debt to be eligible for purchase by the department under this section, it must
arise from an agreement between a local government and a developer, in a form required by
the department, in which the parties agree that:
(a) The developer will construct one or more dwelling units.
(b) The local government will defer the collection of a system development charge, as
defined in ORS 223.299, from the developer until:
(A) The date 180 days after the date that any dwelling unit in the development project
has been certified for occupancy; or
(B) If the development project will be affordable housing, as defined in ORS 197A.445, a
date between 180 days and one year following the date that any dwelling unit in the devel-
opment project has been certified for occupancy.
(c) Except as provided in paragraph (d) of this subsection, the developer will not pay any
interest or fees on the system development charge based on the charge’s deferral.
(d) If the debt becomes owed to the department under this section, the department will
assess:
NOTE:Matter in boldfaced type in an amended section is new; matter [italic and bracketed] is existing law to be omitted.
New sections are in boldfaced type.
LC 151 HB2968
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(A) A 20 percent civil penalty on the past-due balance of the debt; and
(B) Interest, at the rate specified in ORS 82.010, on the balance of the debt and penalty.
(3) Upon purchasing a debt under this section, the department shall assess the civil
penalty and interest allowed under subsection (2)(d) of this section and make reasonable ef-
forts to collect the debt. Such efforts may include assigning the debt to the Department of
Revenue for collection under ORS 293.250.
(4) Payments made by the Housing and Community Services Department to purchase and
collect the debt under this section must be paid from available moneys in the Municipal De-
velopment Protection Fund established under section 3 of this 2025 Act. The net amount of
moneys collected under this section must be credited to the fund.
(5) Moneys received by a local government under this section must be treated as pay-
ments of the system development charge and used for the purposes allowed under ORS
223.307.
(6) As used in this section, “local government” means any local government as defined
in ORS 174.116 that is authorized to impose or collect a system development charge under
ORS 223.297 to 223.316.
SECTION 3. (1) The Municipal Development Protection Fund is established in the State
Treasury, separate and distinct from the General Fund.
(2) The Municipal Development Protection Fund consists of moneys collected by the
Housing and Community Services Department under section 2 of this 2025 Act and moneys
appropriated, allocated, deposited or transferred to the fund by the Legislative Assembly or
otherwise. Interest earned by the fund is credited to the fund.
(3) Moneys in the fund are continuously appropriated to the department to administer
the fund and the program described in section 2 of this 2025 Act. In each biennium, the de-
partment may not use more than four percent of the moneys in the fund at the beginning
of the biennium for the costs of administering the fund and of implementing section 2 of this
2025Act.
SECTION 4.In addition to and not in lieu of any other appropriation, there is appropri-
ated to the Housing and Community Services Department, for the biennium beginning July
1, 2025, out of the General Fund, the amount of $10,000,000, for deposit into the Municipal
Development Protection Fund established under section 3 of this 2025 Act.
SECTION 5.(1) Section 2 of this 2025 Act becomes operative on January 1, 2026.
(2) The Housing and Community Services Department may take any action before the
operative date specified in subsection (1) of this section that is necessary to enable the de-
partment to exercise, on and after the operative date specified in subsection (1) of this sec-
tion, all of the duties, functions and powers conferred on the department by sections 2 and
3 of this 2025 Act.
(3) On or before January 1, 2026, the department shall adopt rules and model forms of
agreements to implement section 2 of this 2025 Act.
(4) Section 2 of this 2025 Act applies only to agreements between a local government and
a developer entered into on or after January 1, 2026.
(5) Notwithstanding section 3 (3) of this 2025 Act, for the biennium beginning July 1, 2025,
the department may spend not more than $200,000 from the Municipal Development Pro-
tection Fund established under section 3 of this 2025 Act for the costs of administering the
fund and the program described in section 2 of this 2025 Act.
[2] HB2968
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SECTION 6. This 2025 Act being necessary for the immediate preservation of the public
peace, health and safety, an emergency is declared to exist, and this 2025 Act takes effect
on its passage.
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