SB 1585

83rd OREGON LEGISLATIVE ASSEMBLY--2026 Regular Session
  Enrolled
  Senate Bill 1585
Sponsored by Senators MANNING JR, ANDERSON, SOLLMAN, MEEK, PATTERSON,
   PROZANSKI, Representative DIEHL; Senators BROADMAN, DRAZAN, GOLDEN, GORSEK,
   HAYDEN, NASH, SMITH DB, THATCHER, WEBER, Representatives BOICE, BUNCH, CATE,
   EDWARDS, EVANS, FRAGALA, GAMBA, GOMBERG, HARBICK, HELFRICH, HELM,
   HUDSON, LEVY B, LEWIS, MANNIX, MCINTIRE, MCLAIN, MUNOZ, NELSON, OWENS,
   RIEKE SMITH, WISE, WRIGHT, YUNKER (Presession filed.)
  CHAPTER .................................................
  AN ACT
Relating to matching grants for cities; creating new provisions; amending ORS 184.742, 285B.420,
    285B.421, 367.082, 367.093, 541.561 and 541.666; and prescribing an effective date.
Be It Enacted by the People of the State of Oregon:
    SECTION 1. ORS 184.742 is amended to read:
    184.742. (1) The Oregon Transportation Commission may provide matching grants under this
section for safety improvement projects near schools.
    (2) To qualify for a matching grant an applicant shall:
    (a) Demonstrate that a project fits within the applicable plan developed pursuant to ORS
195.115;
    (b) Provide a cash match [of at least 40 percent of the project’s costs] in an amount determined
under subsection (3) of this section; and
    (c) Provide any other information required by the commission.
    (3)(a) Except as provided in paragraphs (b) and (c) of this subsection, an applicant shall
provide a cash match of at least 40 percent of the project’s total costs.
    (b) Incorporated cities with a population not greater than 20,000 shall provide cash
matches on the following terms, based on population according to the most recent federal
decennial census:
    (A) An incorporated city with a population not greater than 5,000 may be required to
provide a cash match of not greater than:
    (i) Three percent of project costs of $100,000 or less.
    (ii) Five percent of project costs greater than $100,000.
    (B) An incorporated city with a population greater than 5,000 but not greater than 7,500
may be required to provide a cash match of not greater than seven percent of the project’s
costs.
    (C) An incorporated city with a population greater than 7,500 but not greater than 10,000
may be required to provide a cash match of not greater than nine percent of the project’s
costs.
    (D) An incorporated city with a population greater than 10,000 but not greater than 20,000
may be required to provide a cash match of not greater than 12 percent of the project’s
costs.
Enrolled Senate Bill 1585 (SB 1585-A)  Page 1
     (c) [Notwithstanding subsection (2) of this section, by rule,] The commission may reduce the
amount [the] an applicant must provide for a cash match.
     (d) Notwithstanding any other provision of law restricting the use of the grant award
moneys, incorporated cities with a population not greater than 20,000 may use grant moneys
awarded for capital construction or municipal infrastructure for all phases of a funded
project in addition to construction, including, but not limited to, engineering, planning and
support.
     (4) The commission shall prioritize the expenditure of funds as authorized under this section for
projects that are located within a two-mile radius of a school that serves students in
prekindergarten, kindergarten or grades 1 through 12, or any combination of those grade levels.
     (5) The matching grants shall be used to reduce barriers and hazards to children walking or
bicycling to and from school, including but not limited to safety improvement projects that:
     (a) Improve sidewalks;
     (b) Reduce vehicle speeds;
     (c) Improve pedestrian and bicycle crossings; or
     (d) Create or improve bicycle lanes.
     (6) The commission may adopt rules specifying the application process and the selection criteria
that will be used in awarding matching grants.
     SECTION 2. ORS 367.082 is amended to read:
     367.082. (1) Except as provided in subsection (2) of this section, the Department of Transporta-
tion may provide, from moneys in the Connect Oregon Fund established under ORS 367.080, grants
for transportation projects to public bodies, as defined in ORS 174.109, and to private entities.
     (2) Grants may not be made from the Connect Oregon Fund for transportation projects that
could constitutionally be funded by revenues described in Article IX, section 3a, of the Oregon
Constitution.
     (3) The Department of Transportation shall adopt rules specifying the process by which a public
body or private entity may apply for a grant under this section and prescribing the terms and con-
ditions of grants.
     (4) Except as provided in subsection (5) of this section, an applicant receiving a grant must
provide the following amounts:
     (a) For public bodies and private entities, other than Class I railroads, 30 percent of the moneys
required for the transportation project.
     (b) For Class I railroads, 50 percent of the moneys required for the transportation project.
     (5)(a) Match amounts for grants for transportation projects awarded to incorporated
cities with a population not greater than 20,000 shall be offered as follows, based on popu-
lation according to the most recent federal decennial census:
     (A) Incorporated cities with a population not greater than 5,000 may be required to pro-
vide match amounts of not greater than:
     (i) Three percent of the moneys required for a transportation project having a project
cost of $100,000 or less.
     (ii) Five percent of the moneys required for a transportation project having a project cost
greater than $100,000.
     (B) Incorporated cities with a population greater than 5,000 but not greater than 7,500
may be required to provide match amounts not greater than seven percent of the moneys
required for the transportation project.
     (C) Incorporated cities with a population greater than 7,500 but not greater than 10,000
may be required to provide match amounts not greater than nine percent of the moneys
required for the transportation project.
     (D) Incorporated cities with a population greater than 10,000 but not greater than 20,000
may be required to provide match amounts not greater than 12 percent of the moneys re-
quired for the transportation project.
Enrolled Senate Bill 1585 (SB 1585-A)  Page 2
     (b) Notwithstanding any other provision of law restricting the use of the grant award
moneys, incorporated cities with a population not greater than 20,000 may use grant moneys
awarded for capital construction or municipal infrastructure for all phases of a funded
project in addition to construction, including, but not limited to, engineering, planning and
support.
     SECTION 3. ORS 367.093 is amended to read:
     367.093. (1) The Department of Transportation shall establish the Multimodal Active Transpor-
tation Program. The department may provide, from moneys in the Multimodal Active Transportation
Fund established under ORS 367.091, grants for transportation projects to public bodies and to pri-
vate entities.
     (2) The department shall adopt rules specifying the process by which a public body or private
entity may apply for a grant under this section and prescribing the terms and conditions of grants.
     (3) Except as provided in subsection (4) of this section, an applicant receiving a grant must
provide 30 percent of the moneys required for the transportation project.
     (4)(a) Match amounts for grants for transportation projects awarded to incorporated
cities with a population not greater than 20,000 shall be offered as follows, based on popu-
lation according to the most recent federal decennial census:
     (A) Incorporated cities with a population not greater than 5,000 may be required to pro-
vide match amounts of not greater than:
     (i) Three percent of the moneys required for a transportation project having a project
cost of $100,000 or less.
     (ii) Five percent of the moneys required for a transportation project having a project cost
greater than $100,000.
     (B) Incorporated cities with a population greater than 5,000 but not greater than 7,500
may be required to provide match amounts not greater than seven percent of the moneys
required for the transportation project.
     (C) Incorporated cities with a population greater than 7,500 but not greater than 10,000
may be required to provide match amounts not greater than nine percent of the moneys
required for the transportation project.
     (D) Incorporated cities with a population greater than 10,000 but not greater than 20,000
may be required to provide match amounts not greater than 12 percent of the moneys re-
quired for the transportation project.
     (b) Notwithstanding any other provision of law restricting the use of the grant award
moneys, incorporated cities with a population not greater than 20,000 may use grant moneys
awarded for capital construction or municipal infrastructure for all phases of a funded
project in addition to construction, including, but not limited to, engineering, planning and
support.
     [(3)] (5) The Oregon Transportation Commission shall select transportation projects to be funded
with moneys in the Multimodal Active Transportation Fund. Before selecting bicycle and pedestrian
transportation projects, the commission shall solicit recommendations from the advisory committee
created by ORS 366.112.
     SECTION 4. ORS 285B.420 is amended to read:
     285B.420. (1)(a) The Oregon Infrastructure Finance Authority may provide financial assistance
in the form of loans or grants for a levee project to:
     [(a)] (A) Municipalities;
     [(b)] (B) Corporations or companies for drainage or flood control organized under ORS chapter
554; and
     [(c)] (C) For-profit or nonprofit entities and individuals engaged in the ownership, construction,
inspection, accreditation, certification or repair of levees.
     (b) Grants awarded under this section shall be paid from available moneys in the Levee
Project Grant Fund established under ORS 285B.421.
Enrolled Senate Bill 1585 (SB 1585-A)  Page 3
     (2) To qualify for financial assistance under this section, the municipality, corporation, company,
entity or individual must demonstrate, and the authority must find, that the levee project substan-
tially contributes to the improvement, expansion or repair of the state’s or a municipality’s
infrastructure system and is essential for the use or development of farm, industrial or commercial
land in Oregon.
     (3) Grant awards for planning projects are limited to a maximum of $2 million per appli-
cant per biennium.
     (4) Except as provided in subsection (5) of this section, a grant may not be awarded un-
less the applicant pledges matching funds to the project of at least 20 percent of the amount
of the grant award.
     (5)(a) For projects to protect cities with a population not greater than 5,000, applicants
may be required to provide matching funds of not greater than:
     (A) Three percent of the amount of a grant award of $100,000 or less.
     (B) Five percent of the amount of a grant award greater than $100,000.
     (b) For projects to protect cities with a population greater than 5,000 but not greater
than 7,500, applicants may be required to provide matching funds of not greater than seven
percent of the amount of the grant award.
     (c) For projects to protect cities with a population greater than 7,500 but not greater
than 10,000, applicants may be required to provide matching funds of not greater than nine
percent of the amount of the grant award.
     (d) For projects to protect cities with a population greater than 10,000 but not greater
than 20,000, applicants may be required to provide matching funds of not greater than 12
percent of the amount of the grant award.
     (e) Population shall be determined according to the most recent federal decennial census.
     (f) Notwithstanding any other provision of law restricting the use of the grant award
moneys, municipalities with a population not greater than 20,000 may use grant moneys
awarded for capital construction or municipal infrastructure for all phases of a funded
project in addition to construction, including, but not limited to, engineering, planning and
support.
     (6) At least 60 percent of the dollar value of grants awarded under this section for any
biennium shall be used to provide assistance with levee projects to rural or distressed areas
as those terms are defined in ORS 285A.010.
     [(3)] (7) Levee projects that receive financial assistance under this section are subject to the
provisions and requirements of ORS 285B.410 to 285B.482, if applicable.
     SECTION 5. ORS 285B.421 is amended to read:
     285B.421. (1) The Levee Project Grant Fund is established in the State Treasury, separate and
distinct from the General Fund. Interest earned by the Levee Project Grant Fund must be credited
to the fund. The Levee Project Grant Fund consists of moneys deposited in the fund under section
33, chapter 671, Oregon Laws 2019, and may include moneys appropriated, allocated, deposited or
transferred to the fund by the Legislative Assembly or otherwise and interest earned on moneys in
the fund.
     (2) Moneys in the fund are continuously appropriated to the Oregon Business Development De-
partment for the Oregon Infrastructure Finance Authority to provide grants under ORS 285B.420 for
levee projects [as defined in ORS 285B.410].
     [(3) Grants from the fund for planning projects are limited to a maximum of $2 million per appli-
cant per biennium.]
     [(4) Grants from the fund for construction or capital improvement projects may not exceed an
amount equal to 80 percent of the total cost of the project.]
     [(5) A grant may not be awarded from the fund unless the applicant pledges matching funds to the
project of at least 20 percent of the amount of the grant.]
Enrolled Senate Bill 1585 (SB 1585-A)  Page 4
     [(6) At least 60 percent of the dollar value of grants awarded from the fund in any biennium shall
be used to provide assistance with levee projects to rural or distressed areas as those terms are defined
in ORS 285A.010.]
     SECTION 6. ORS 285B.421 is added to and made a part of ORS 285B.410 to 285B.482.
     SECTION 7. (1) Match requirements for grants for projects described in ORS 390.135
(2)(c) to incorporated cities with a population not greater than 20,000 shall be offered on the
following terms, based on population according to the most recent federal decennial census:
     (a) Incorporated cities with a population not greater than 5,000 may be required to pro-
vide matching funds of not greater than:
     (A) Three percent of a total project cost of $100,000 or less.
     (B) Five percent of a total project cost greater than $100,000.
     (b) Incorporated cities with a population greater than 5,000 but not greater than 7,500
may be required to provide matching funds of not greater than seven percent of the total
project cost.
     (c) Incorporated cities with a population greater than 7,500 but not greater than 10,000
may be required to provide matching funds of not greater than nine percent of the total
project cost.
     (d) Incorporated cities with a population greater than 10,000 but not greater than 20,000
may be required to provide matching funds of not greater than 12 percent of the total project
cost.
     (2) Notwithstanding any other provision of law restricting the use of the grant award
moneys, incorporated cities with a population not greater than 20,000 may use grant moneys
awarded for capital construction or municipal infrastructure for all phases of a funded
project in addition to construction, including, but not limited to, engineering, planning and
support.
     SECTION 8. ORS 541.561 is amended to read:
     541.561. (1) The Water Resources Department shall establish a grant program to pay the quali-
fying costs of studies performed to evaluate the feasibility of projects related to:
     (a) Water conservation.
     (b) Water reuse.
     (c) Aquifer recharge.
     (d) Aquifer storage and recovery.
     (e) Streamflow protection or restoration.
     (f) Water storage.
     (g) Other activities identified by rule by the Water Resources Commission.
     (2) A grant under this section may be made to:
     (a) A person, as defined in ORS 536.007.
     (b) A public body, as defined in ORS 174.109.
     (c) A federally recognized Indian tribe in Oregon that has members residing on a reservation
or tribal trust lands in Oregon.
     (d) A nonprofit organization.
     (3) In lieu of grants, the department may pay the cost of providing direct services, including but
not limited to technical services, for a study that is eligible for a grant under this section.
     (4) Except as provided in subsection (5) of this section, a grant may be provided only if the
amount of the grant is matched by an in-kind or cash cost match of not less than 25 percent of the
grant amount. The commission may establish a maximum per project amount of grant funding that
a project may receive or may increase the cost match for upcoming project cycles based on the
availability of funds.
     (5) Matching funds for grants or payments for direct services under this section awarded
to incorporated cities with a population not greater than 20,000 shall be offered as follows,
based on population according to the most recent federal decennial census:
Enrolled Senate Bill 1585 (SB 1585-A)  Page 5
     (a) Incorporated cities with a population not greater than 5,000 may be required to pro-
vide matching funds in an amount not greater than:
     (A) Three percent of a grant or the cost of direct services awarded in an amount of
$100,000 or less.
     (B) Five percent of a grant or the cost of direct services awarded in an amount greater
than $100,000.
     (b) Incorporated cities with a population greater than 5,000 but not greater than 7,500
may be required to provide matching funds in an amount not greater than seven percent of
the amount of the grant or the cost of direct services awarded.
     (c) Incorporated cities with a population greater than 7,500 but not greater than 10,000
may be required to provide matching funds in an amount not greater than nine percent of
the amount of the grant or the cost of direct services awarded.
     (d) Incorporated cities with a population greater than 10,000 but not greater than 20,000
may be required to provide matching funds in an amount not greater than 12 percent of the
amount of the grant or the cost of direct services awarded.
     [(5)] (6) Grants and the cost of direct services provided under this section must be paid from
moneys available in the Water Project Feasibility Fund.
     [(6)] (7) In evaluating above ground storage projects for awards of grants or payments for direct
services under this section, the department shall give priority to projects that include provisions for
using stored water to augment in-stream flows to conserve, maintain and enhance aquatic life, fish
life or other ecological values.
     SECTION 9. ORS 541.666 is amended to read:
     541.666. (1) Applications for a loan or grant from the Water Supply Development Account must:
     (a) Be in a form prescribed by the Water Resources Department.
     (b) Include any information required by the department.
     (c) Be filed with the department.
     (2) The department may require an application to include the following:
     (a) A description of the need, purpose and nature of the project, including what the applicant
intends to complete and how the applicant intends to proceed.
     (b) Sufficient information to allow evaluation of the application based upon the public benefit
scoring and ranking of the project.
     (c) Current contact information for the principal contact, fiscal officer and involved landowners.
     (d) For applications involving physical changes or monitoring on private land, evidence that
landowners are aware of and agree to the proposal and are aware that monitoring information is a
public record.
     (e) The location of the proposed project, using public land survey reference points, latitude and
longitude, county, watershed, river and stream mile, if appropriate.
     (f) An itemized budget for the project, including fiscal and administrative costs.
     (g) A description of funds, services or materials available to the project.
     (h) A project schedule, including beginning and completion dates.
     (i) Any conditions that may affect the completion of the project.
     (j) A completed feasibility analysis if appropriate.
     (k) Suggestions for interim and long-term project performance benchmarks.
     (L) Except as provided in subsection (3) of this section, if the application is for a grant,
demonstrated in-kind and cash cost match of not less than 25 percent of the amount of the grant
sought from the account.
     (m) If the application is for a loan, evidence demonstrating ability to repay the loan and provide
collateral.
     (n) Letters of support for the proposed project.
     (o) If required by the department, a description of consultations with affected Indian tribes re-
garding the project.
     (p) Any other information required by the department.
Enrolled Senate Bill 1585 (SB 1585-A)  Page 6
    (3)(a) A cost match for grants sought by incorporated cities with a population not greater
than 20,000 shall be required as follows, based on population according to the most recent
federal decennial census:
    (A) Incorporated cities with a population not greater than 5,000 may be required to pro-
vide a cost match in an amount not greater than:
    (i) Three percent of the amount of a grant sought for $100,000 or less.
    (ii) Five percent of the amount of a grant sought for more than $100,000.
    (B) Incorporated cities with a population greater than 5,000 but not greater than 7,500
may be required to provide a cost match in an amount not greater than seven percent of the
amount of the grant sought.
    (C) Incorporated cities with a population greater than 7,500 but not greater than 10,000
may be required to provide a cost match in an amount not greater than nine percent of the
amount of the grant sought.
    (D) Incorporated cities with a population greater than 10,000 but not greater than 20,000
may be required to provide a cost match in an amount not greater than 12 percent of the
amount of the grant sought.
    (b) Notwithstanding any other provision of law restricting the use of the grant award
moneys, incorporated cities with a population not greater than 20,000 may use grant moneys
awarded for capital construction or municipal infrastructure for all phases of a funded
project in addition to construction, including, but not limited to, engineering, planning and
support.
    SECTION 10. This 2026 Act takes effect on the 91st day after the date on which the 2026
regular session of the Eighty-third Legislative Assembly adjourns sine die.
Passed by Senate February 19, 2026  Received by Governor:
  ........................M.,........................................................., 2026
        ..................................................................................
  Approved:
  Obadiah Rutledge, Secretary of Senate
  ........................M.,........................................................., 2026
        ..................................................................................
  Rob Wagner, President of Senate
  ..................................................................................
  Tina Kotek, Governor
Passed by House March 6, 2026
  Filed in Office of Secretary of State:
        ..................................................................................   ........................M.,........................................................., 2026
  Julie Fahey, Speaker of House
  ..................................................................................
  Tobias Read, Secretary of State
Enrolled Senate Bill 1585 (SB 1585-A)  Page 7