If Oregon's legislature cuts funding for the state/county community corrections partnership, can counties walk away from supervising felony offenders and hand them back to the state?

Subject

Steven Marks, Chief of Staff to Governor Kitzhaber

Plain-English summary

In 1995, facing a projected surge in inmates serving Measure 11 mandatory-minimum sentences, the Oregon legislature passed Senate Bill 1145. The bill restructured community corrections so that counties took responsibility for supervising felony offenders on parole, probation, and post-prison supervision, in exchange for a statutorily prescribed level of state funding. The arrangement included a county "opt-out" provision that let counties pull out of the partnership if certain conditions were met.

By early 2002, Oregon faced a serious budget shortfall. The legislature had already cut $1 million from the 2001-03 community corrections appropriation in a special session. The Governor's office wanted to know whether a further legislative action, eliminating the 3.5% inflation adjustment that had been built into the biennial appropriation, would trigger the SB 1145 opt-out and allow counties to hand the supervision responsibilities back to the state.

The AG concluded it would not. The opt-out provision had a specific statutory trigger that required the state's appropriation to fall below a defined baseline level. Removing an inflation adjustment for the remaining months of the biennium did not meet that trigger because the baseline did not include an inflation guarantee. The legislature could choose to fund or not fund inflation adjustments as it pleased without giving counties a contractual exit from the partnership.

This was not the same as saying counties were locked in forever. The opt-out remained available if a future legislative action did cut the state funding below the statutory floor. But the proposed budget rebalance, as described, did not get there. The AG was careful to note that the analysis was based on the specific hypothetical the Governor's office had described and that a different funding action could yield a different answer.

Currency note

This opinion was issued in 2002. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Community corrections funding and the SB 1145 structure have been adjusted multiple times since. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Common questions

Did SB 1145 promise counties an inflation-adjusted appropriation?
The AG read SB 1145 as not promising any specific level of funding beyond the statutory baseline written into the community corrections statutes. Inflation adjustments were a legislative choice in any given biennium, not a permanent entitlement.

What would have triggered the county opt-out?
A legislative action reducing the appropriation below the statutory baseline level required by the community corrections statutes. The AG did not catalog every scenario, but the key was an actual cut below the floor, not just a smaller-than-expected increase or an elimination of an inflation cushion.

Could counties refuse to perform if they didn't get the inflation increase?
Under the SB 1145 framework, counties had specific statutory responsibilities that did not depend on inflation adjustments. The legislature had built in the opt-out as the contractual remedy for inadequate funding. Counties could not unilaterally stop performing while staying within the partnership; the choice was to perform or to exit through the statutory opt-out.

Why was the AG asked this question?
Because the answer mattered for legislative planning. If the inflation cut would let multiple counties exit, the state would have to absorb the community corrections workload directly, which could cost more than the savings from the cut. The AG's conclusion that the opt-out would not trigger gave the legislature room to proceed with that specific rebalance approach.

What would happen if a future cut did trigger the opt-out?
Counties that chose to opt out would return the responsibility for felony offender supervision to the state. The state, through ODOC, would then have to absorb the workload, including hiring or contracting for supervision staff and managing the affected offenders directly. That outcome was generally more expensive than maintaining the partnership.

Background and statutory framework

SB 1145, enacted as Or Laws 1995 ch. 423, restructured community corrections in Oregon. The legislation was a response to projected increases in state prison demand from Measure 11 mandatory minimums. Rather than keep all community supervision at the state level, the legislature shifted responsibility for felony offenders on parole, probation, and post-prison supervision to the counties, with state funding through a grant-in-aid program now codified at ORS 423.530.

The state/county partnership was structured around a baseline funding level. The legislature appropriated $195,555,286 to ODOC for the 2001-03 biennium for community corrections grants under Or Laws 2001 ch. 631 § 1. That appropriation included a 3.5% inflation adjustment. The remainder of ODOC's appropriations did not include any inflation adjustment.

In early 2002, the legislature held two special sessions to rebalance the state budget. Or Laws 2002 ch. 2 § 1 cut the community corrections appropriation by $1 million. The hypothetical the Governor's office asked about was a further reduction eliminating the inflation adjustment entirely, leaving the community corrections grant flat.

The opt-out provision in ORS 423.483 allowed counties to withdraw from the partnership under defined conditions tied to the state's failure to provide statutorily required funding. ORS 423.483(2) lets a county discontinue participation, on 180 days' notice, if the total state community corrections appropriation falls below the baseline "current service level" defined in ORS 423.483(3). The AG applied the PGE methodology to interpret the trigger.

Citations

• ORS 423.475 to 423.560 (SB 1145 community corrections framework)
• ORS 423.530 (state grant-in-aid program)
• ORS 423.483 (county opt-out provision and "current service level" baseline)
• ORS 423.478(2) (offenders covered by the partnership)
• Or Laws 1995 ch. 423 (SB 1145 enactment)
• Or Laws 2001 ch. 631 § 1 (2001-03 community corrections appropriation)
• Or Laws 2002 ch. 2 § 1 (first 2002 special-session rebalance)
• PGE v. Bureau of Labor and Industries, 317 Or 606 (1993) (statutory interpretation)

Source

• Landing page: https://www.doj.state.or.us/oregon-department-of-justice/office-of-the-attorney-general/attorney-general-opinions/
• Original PDF: https://www.doj.state.or.us/wp-content/uploads/2002/04/op2002-3.pdf

Original opinion text

HARDY MYERS

PETER D. SHEPHERD

Attorney General

Deputy Attorney General

DEPARTMENT OF JUSTICE
GENERAL COUNSEL DIVISION

April 3, 2002

Steve Marks, Chief of Staff to Governor Kitzhaber
Office of the Governor
State Capitol
Salem, OR 97310
Re:

Opinion Request OP-2002-3

Dear Mr. Marks:
This letter responds to your request for advice regarding the county “opt out” provision
enacted as part of Senate Bill 1145 (1995). Specifically, you have asked whether counties could
withdraw from the SB 1145 state/county community corrections partnership if the Legislative
Assembly were to enact a new budget law as part of a budget rebalance plan that reduces
ODOC’s line item appropriation for community corrections to reflect a zero adjustment for
inflation for the remaining months of the current biennium. We conclude that the counties could
not withdraw on the basis of the suggested legislative action.
Discussion
1.

Funding of Community Corrections Under SB 1145

In 1995, facing projections of significantly increased demand for state secure facilities to
incarcerate offenders sentenced to lengthy mandatory minimum sentences under Measure 11, the
Legislative Assembly enacted legislation that had the effect of restructuring statewide
community corrections supervision and services. Or Laws 1995, ch 423. As part of that
restructuring, the legislation, referred to collectively as SB 1145, established a partnership
between the state and counties in which the counties assumed responsibility to provide
community-based supervision, sanctions and services for felony offenders on parole, probation
or post-prison supervision in exchange for a statutorily-prescribed level of state funding.
ORS 423.475 to 423.560.
For the 2001-03 biennium, the Legislative Assembly appropriated $195,555,286 to
ODOC for the purpose of providing community corrections grants to the counties under the
SB 1145 grant-in-aid program described in ORS 423.530. Or Laws 2001, ch 631, §1. ODOC
officials advise that this appropriation included a 3.5% adjustment for inflation for the current
biennium. ODOC officials further advise that none of the remainder of ODOC’s appropriations
included an inflation adjustment.

1162 Court Street NE, Salem, OR 97310 Telephone: (503) 378-4620 Fax: (503) 378-3784 TTY: (503) 378-5938

Steve Marks, Chief of Staff to Governor Kitzhaber
April 3, 2002
Page 2

In the second of two special sessions held in February and March of this year, the
Legislative Assembly reduced the 2001-03 biennial appropriation to ODOC for community
corrections grants to counties by $1,000,000. Or Laws 2002, ch 2, §1. It is possible that the
Legislative Assembly, at a future special session, could further reduce the appropriation for
community corrections to reflect a zero adjustment for inflation for the remaining months of the
biennium.
In order to advise you in this matter, we must interpret the meaning and legal effect of the
SB 1145 county opt out provision in the context of the suggested budget rebalance plan. When
interpreting statutes, our task is to discern the intent of the legislature. PGE v. Bureau of Labor
and Industries, 317 Or 606, 610-612, 859 P2d 1143 (1993) (outlining methodology for
interpreting a statute). In doing so, we must first examine the text and context of a statute
because the wording of a statute “is the best evidence of the legislature’s intent.” PGE, 317 Or at

610. A statute’s context may include other provisions of the same statute and related statutes, id.
     at 610-11, and prior enactments and prior judicial interpretations of that statute and related
     statutes, Owens v. Maass, 323 Or 430, 435, 918 P2d 808 (1996). Only if the intent of the
     legislature is not clear from the first level of analysis may legislative history be considered. PGE,
     317 Or at 611.
     2.

Legislative Discretion to Adjust for Inflation in Determining Current Service
Levels

The county opt out provision at issue is codified at ORS 423.483. That statute states:
(1) The baseline funding for biennia beginning after June 30, 1999, is the current
service level for the expenses of providing management, support services, supervision
and sanctions for offenders described in ORS 423.478(2). At a minimum, each
biennium's appropriation must be established at this baseline.
(2) If the total state community corrections appropriation is less than the baseline
calculated under subsection (1) of this section, a county may discontinue participation by
written notification to the director 180 days prior to implementation of the change. If a
county discontinues participation, the responsibility for correctional services transferred
to the county, and the portion of funding made available to the county under ORS
423.530 reverts to the Department of Corrections. In no case does responsibility for
supervision and provision of correctional services to misdemeanor offenders revert to the
department.
(3) As used in this section, “current service level” means the calculated cost of
continuing current legislatively funded programs, phased in programs and increased
caseloads minus one-time costs, decreased caseloads, phased out programs and pilot
programs with the remainder adjusted for inflation as determined by the Legislative
Assembly in its biennial appropriation to the Department of Corrections.

Steve Marks, Chief of Staff to Governor Kitzhaber
April 3, 2002
Page 3

By its terms, ORS 423.483 permits a county to withdraw from the SB 1145 state/county
community corrections partnership only if the total state community corrections appropriation is
less than “the calculated cost of continuing current legislatively funded programs, phased in
programs and increased caseloads minus one-time costs, decreased caseloads, phased out
programs and pilot programs with the remainder adjusted for inflation as determined by the
Legislative Assembly in its biennial appropriation to the Department of Corrections.”
(Emphasis added.)
a.

Text and Context

Under the statutory definition of “current service level” contained in ORS 423.483(3),
within the state’s baseline funding obligation it is left to the Legislative Assembly’s discretion to
determine the cost of funding statewide community corrections programs and services at current
levels through the legislative appropriation process. Without the final clause of ORS 423.483(3)
the Legislative Assembly would nonetheless have the authority to account for inflation in
calculating a “current service level.”1/ Nothing in the text of the final clause binds the Legislative
Assembly to rely upon or adopt any particular inflation index or other economic indicator as a
measure of inflation. Under the rules of statutory interpretation, it is necessary to ascribe
meaning to all parts of a statute. See Owens, 323 Or at 435 (citing general rule of construction in
ORS 174.010 that, when construing a legislative enactment, we may not "insert what has been
omitted" nor "omit what has been inserted."). Because the final clause of ORS 423.483(3)
provides the Legislative Assembly with no greater authority than it normally holds under the
appropriation process, we look for meaning in the direction that the inflation adjustment be in the
“biennial appropriation to the Department of Corrections.” The legislature may have intended
this language simply to direct where the money for community corrections grants would appear
within its appropriations enactments. Alternatively, the phrase may be read to qualify or limit
the Legislature’s discretion to set the amount or rate of any inflation adjustment in the
community corrections appropriation by tying that determination to the inflation rate or amount
established for ODOC corrections programs and services. Because we are unable to
conclusively discern the legislature’s intent from our examination of the statute’s text and
context, we turn to the second level of analysis, which is to consider the legislative history of
ORS 423.483. See PGE, 317 Or at 611-12.
b.

Legislative History

Following its introduction in the Senate Judiciary Committee, SB 1145 was referred to
the Joint Committee on Ways and Means. Most of the substantive work and consideration of the
bill took place in the Ways and Means Committee’s Special Subcommittee on Corrections.
Legislators and witnesses discussed the subject of what constituted “baseline” funding of state
community corrections and the county opt out provision on several occasions during the
subcommittee’s consideration of the bill.

Steve Marks, Chief of Staff to Governor Kitzhaber
April 3, 2002
Page 4

During an early subcommittee hearing on proposed amendments to the bill, in response to
a question from the Subcommittee Chair, Senator Neil Bryant, Bill Carey of the Department of
Corrections explained:
Carey: That section [Section 6 of the proposed A5 amendments to SB 1145] deals with
the opt out that people are concerned about for the counties. Unless the state reduces
funding below current service level, counties will not have an option to opt out. They are
in the partnership as long as we can continue our level of funding as described by current
service fund.
Chair Bryant: When it says "with the remainder adjusted for inflation," what type of
inflation measure do you use?
Carey: Mr. Chair, it would be the inflation that the legislature approves in a budget.
Testimony of Bill Carey, Joint Committee on Ways and Means, Special Subcommittee on
Corrections, (SB 1145), May 16, 1995, tape 3, side A, at 214 (emphasis added).
In a later hearing, the subcommittee continued consideration of, and adopted, bill
amendments containing a revised definition of “current service level.” That definition, which
was incorporated in section 6 of the A6 amendments to SB 1145, is the definitional language that
ultimately was enacted and is now codified in ORS 423.483(3). The new language that was
added to the definition was the phrase, “as determined by the Legislative Assembly in its
biennial appropriation to the Department of Corrections.” In the subcommittee hearing,
Sue Acuff, then a fiscal analyst with the Legislative Fiscal Office who staffed SB 1145 for the
subcommittee, explained the intended purpose of the clarifying amendment:
Sue Acuff: Okay, the opt out provisions are still in the bill. The current service level is becomes – what you use to determine future funding. And that’s defined as the
calculated cost of continuing current legislatively funded programs, phased in programs
and increased caseloads minus one-time costs, decreased caseloads, phased out programs
and pilot programs with the remainder adjusted for inflation. And the A6 amendments
clarify the inflation rate is the one – the same as that approved for the Department of
Corrections. And the last part of it there - if the appropriation is less than the resulting
calculation the county can give the responsibility back to the state.
Testimony of Sue Acuff, Joint Committee on Ways and Means, Special Subcommittee on
Corrections, (SB 1145), June 2, 1995, tape 11, side B, at 451-469 (emphasis added).

Steve Marks, Chief of Staff to Governor Kitzhaber
April 3, 2002
Page 5

Finally, an exhibit referencing the A6 amendments to SB 1145 was presented and
received by the subcommittee during its consideration of the amendments.2/ That exhibit echoes
Ms. Acuff’s testimony regarding the intended meaning and purpose of the definitional change to
“current service level” incorporated in the A6 amendments:

Establishment of funding baseline and “opt out” provisions.
•
•

•
•

The baseline funding for future biennia is established as the current service level
for the expenses of providing management, support services, supervision and
sanctions for all offenders described in section 9(2) of the act.
The current service level is defined as the calculated cost of continuing current
legislatively funded programs, phased in programs, and increased caseloads,
minus one-time costs, decreased caseloads, phased out programs and pilot
programs, with the remainder adjusted for inflation.
The A6 amendments clarify the inflation rate is to be the same as that approved
by the Legislature for the Department of Corrections.
If the appropriation is less than the resulting calculation the county can give the
responsibility back to the state.

Joint Committee on Ways and Means, Special Subcommittee on Corrections, (SB 1145), June 2,
1995, exhibit entitled “SENATE BILL 1145 – COMMUNITY CORRECTIONS
RESTRUCTURE” (emphasis added).
The foregoing legislative history demonstrates that the legislators involved in the Ways
and Means subcommittee work on SB 1145 intended that within the state’s baseline funding
obligation for purposes of the “opt out” provision the legislative determination of the amount of
an inflation adjustment in the community corrections appropriation, if any, be the same as that
approved by the Legislative Assembly for state corrections programs and services in its biennial
appropriation to the Department of Corrections. Although isolated statements of witnesses made
in committee are not necessarily indicative of the intent of the entire legislature, in view of the
fact that we have found no suggestion, either by a legislator or any witness in committee, that
SB 1145 was intended to have any different effect, and because the vast majority of the
substantive work and consideration of the bill’s provisions took place in the subcommittee in
which the witnesses testified and the exhibit was presented, those comments and exhibit are
significant. See Davis v. O’Brien, 320 Or 729, 740-46, 891 P2d 1307 (1995). We conclude,
therefore, that the legislative history supports a construction of the statute that a county may not
“opt out” of providing community corrections services when the legislature provides an inflation
adjustment in its biennial appropriation to ODOC for community corrections that is at least equal
to that provided in its biennial appropriation to ODOC for state corrections programs and
services.

Steve Marks, Chief of Staff to Governor Kitzhaber
April 3, 2002
Page 6

3.

Conclusion

Because the Legislative Assembly provided a zero inflation adjustment for state
corrections programs and services in its 2001-03 biennial appropriation to ODOC, we conclude
that the Legislative Assembly may enact a new budget law in a future special session that further
reduces ODOC’s line item appropriation for community corrections to reflect a zero adjustment
for inflation for the remaining months of the current biennium, without triggering the statute’s
“opt out” provision for counties under ORS 423.483.
Sincerely,

Donald C. Arnold
Chief Counsel
General Counsel Division
DCA:jvv:naw/GENA8961

1

This is so because a determination of the “calculated cost of continuing current legislatively funded programs”
necessarily includes consideration of whether those costs are projected to be higher or lower in the coming biennium
due to inflation.
2
It appears from the nature of the exhibit that it was prepared by and presented to the chair and members of the
subcommittee by subcommittee staff as a summary of the key policy choices embodied in the proposed amendments
and as a guide to moving the amendments for adoption by the subcommittee.