HB 4027

83rd OREGON LEGISLATIVE ASSEMBLY--2026 Regular Session
  Enrolled
  House Bill 4027
Sponsored by Representative WATANABE, Senator TAYLOR, Representatives GRAYBER, PHAM
   H, RIEKE SMITH, SOSA; Representatives ANDERSEN, CHAICHI, FRAGALA, GAMBA,
   ISADORE, LIVELY, MUNOZ, NELSON, TRAN, Senator PATTERSON (Presession filed.)
  CHAPTER .................................................
  AN ACT
Relating to the Bureau of Labor and Industries; creating new provisions; amending ORS 279C.825,
    656.506, 656.605 and 656.630; and prescribing an effective date.
Be It Enacted by the People of the State of Oregon:
    SECTION 1. Section 2 of this 2026 Act is added to and made a part of ORS chapter 656.
    SECTION 2. (1) The BOLI Expenses Fund is established in the State Treasury, separate
and distinct from the General Fund. Interest earned by the BOLI Expenses Fund shall be
credited to the fund.
    (2) Moneys in the BOLI Expenses Fund are continuously appropriated to the Department
of Consumer and Business Services.
    (3) Subject to an agreement between the Director of the Department of Consumer and
Business Services and the Commissioner of the Bureau of Labor and Industries, moneys in
the BOLI Expenses Fund may be used to reimburse the actual administrative expenses in-
curred by the director under this section and ORS 656.506 (6) and (8).
    (4) The BOLI Expenses Fund consists of:
    (a) Moneys deposited in the fund under ORS 656.506 (6) and (8); and
    (b) Moneys appropriated to the fund by the Legislative Assembly.
    SECTION 3. Section 2 of this 2026 Act is amended to read:
    Sec. 2. (1) The BOLI Expenses Fund is established in the State Treasury, separate and distinct
from the General Fund. Interest earned by the BOLI Expenses Fund shall be credited to the fund.
    (2) Moneys in the BOLI Expenses Fund are continuously appropriated to the Department of
Consumer and Business Services.
    (3) Subject to an agreement between the Director of the Department of Consumer and Business
Services and the Commissioner of the Bureau of Labor and Industries[,]:
    (a) Moneys in the BOLI Expenses Fund may be used to reimburse the actual administrative
expenses incurred by the director under this section and ORS 656.506 (6) and (8).
    (b) The director may transfer moneys from the fund to the Bureau of Labor and Indus-
tries for payment of the expenses incurred by the commissioner in carrying out the duties
set forth in ORS 651.050.
    (4) The BOLI Expenses Fund consists of:
    (a) Moneys deposited in the fund under ORS 656.506 (6) and (8); and
    (b) Moneys appropriated to the fund by the Legislative Assembly.
Enrolled House Bill 4027 (HB 4027-A)  Page 1
     SECTION 4. The amendments to section 2 of this 2026 Act by section 3 of this 2026 Act
become operative on July 1, 2029.
     SECTION 5. ORS 656.506 is amended to read:
     656.506. (1) As used in this section:
     (a) “Employee” means a subject worker as defined in ORS 656.005 [(28)].
     (b) “Employer” means a subject employer as defined in ORS 656.005 [(13)].
     (2) Every employer shall retain from the moneys earned by all employees an amount determined
by the Director of the Department of Consumer and Business Services for each hour or part of an
hour the employee is employed and pay the money retained in the manner and at such intervals as
the director shall specify.
     (3) In addition to all moneys retained under subsection (2) of this section, the director shall as-
sess each employer an amount equal to that assessed pursuant to subsection (2) of this section. The
assessment must be paid in such manner and at such intervals as the director may specify.
     (4)(a) The Department of Consumer and Business Services shall deposit moneys collected pur-
suant to subsections (2) and (3) of this section, and any accrued cash balances, into the Workers’
Benefit Fund, and the BOLI Expenses Fund established under section 2 of this 2026 Act, in
accordance with subsections (5) to (8) of this section.
     (b) Subject to the limitations in subsections (2) and (3) of this section, the amount of the
[hourly] assessments provided in subsections (2) and (3) of this section [annually] may be adjusted
annually to enable the department to:
     (A) Meet the needs of the Workers’ Benefit Fund for the expenditures of the department in
carrying out the department’s functions and duties pursuant to subsection [(7)] (10) of this section
and ORS 656.445, 656.622, 656.625, 656.628 and 656.630[.]; and
     (B) Deposit in the BOLI Expenses Fund the amount determined under subsection (6) of
this section.
     (c) The amount of the assessments provided for under subsections (2) and (3) of this
section shall be computed using the assessment rates determined under subsections (5) and
(6) of this section.
     (d) The assessment rates under subsections (5) and (6) of this section shall be determined
separately.
     (e) Factors to be considered in [making such adjustment of] determining the [assessments] as-
sessment rates must include, but not be limited to, the [cash balance] respective cash balances
as determined by the director and estimated expenditures and revenues of the Workers’ Benefit
Fund and the BOLI Expenses Fund.
     (5) The Legislative Assembly intends that the department set assessment rates [for the col-
lection of assessments] pursuant to subsections (2) and (3) of this section [in a manner] so that at the
end of the period for which the rates are effective, the balance of the Workers’ Benefit Fund is an
amount of not less than 12 months of projected expenditures from the fund in regard to the
department’s functions and duties under subsection [(7)] (10) of this section and ORS 656.445,
656.622, 656.625, 656.628 and 656.630, in a manner that minimizes the volatility of the rates assessed.
     (6)(a) The Legislative Assembly intends that the department set assessment rates pur-
suant to subsections (2) and (3) of this section so that there shall have been deposited in the
BOLI Expenses Fund, for the purposes of funding the expenses incurred by the Commis-
sioner of the Bureau of Labor and Industries in carrying out the duties set forth in ORS
651.050, and reimbursing the actual administrative expenses incurred by the Director of the
Department of Consumer and Business Services described in section 2 (3) of this 2026 Act,
at least:
     (A) On or before June 30, 2029, $4.25 million.
     (B) On or before June 30, 2030, the greater of:
     (i) $4.25 million; or
     (ii) 12 months of projected expenses from the fund, including:
Enrolled House Bill 4027 (HB 4027-A)  Page 2
     (I) $4.25 million adjusted for any increase in the costs of Bureau of Labor and Industries
positions; and
     (II) The reimbursements described in section 2 (3) of this 2026 Act.
     (C) On or before June 30, 2031, and June 30 of each subsequent year, the greater of:
     (i) $9.5 million; or
     (ii) 12 months of projected expenses from the fund, including:
     (I) $9.5 million adjusted for any increase in the costs of Bureau of Labor and Industries
positions; and
     (II) The reimbursements described in section 2 (3) of this 2026 Act.
     (b) The department shall set assessment rates for purposes of this subsection so as to:
     (A) Minimize the volatility of the rates; and
     (B) Create a 12-month reserve in the fund.
     (c) New positions funded by the assessments on or after July 1, 2031, may not exceed the
cumulative cost of $5.25 million per year as of July 1, 2031.
     (7)(a) If the department determines that the balance of the Workers’ Benefit Fund will fall
below the balance required under [this] subsection (5) of this section, the department shall devise
and report to the Workers’ Compensation Management-Labor Advisory Committee a plan to increase
the balance to the required amount.
     (b) The department may set the assessment rate determined under subsection (5) of this
section at a higher level if the department determines that a higher assessment rate is necessary
to avoid unintentional program or benefit reductions in the time period immediately following the
period for which the rate is being set.
     (8)(a) If the department determines that the balance of the BOLI Expenses Fund will fall
below the reserve required under subsection (6) of this section, the department, in consul-
tation with the Bureau of Labor and Industries, shall devise and report to the Workers’
Compensation Management-Labor Advisory Committee a plan to increase the reserve to the
required amount.
     (b) The department may set the assessment rate determined under subsection (6) of this
section at a higher level if the department determines that a higher assessment rate is
necessary to avoid unintentional program or benefit reductions in the time period imme-
diately following the period for which the rate is being set.
     [(6)] (9) Every employer required to pay the assessments referred to in this section shall make
and file a report of employee hours worked and amounts due under this section upon a combined
report form prescribed by the Department of Revenue. The report must be filed with the Department
of Revenue:
     (a) At the times and in the manner prescribed in ORS 316.168 and 316.171; or
     (b) Annually as required or allowed pursuant to ORS 316.197, 657.571 or 657B.150.
     [(7)] (10)(a) There is established a Retroactive Program for the purpose of providing increased
benefits to claimants or beneficiaries eligible to receive compensation under the benefit schedules
of ORS 656.204, 656.206, 656.208 and 656.210 that are lower than currently being paid for like inju-
ries. However, benefits payable under ORS 656.210 may not be increased by the Retroactive Program
for claimants whose injury occurred on or after April 1, 1974.
     (b) Notwithstanding the formulas for computing benefits provided in ORS 656.204, 656.206,
656.208 and 656.210, the increased benefits payable under this subsection must be in such amount
as the director considers appropriate.
     (c) The director [annually] shall annually compute the amount which may be available during
the succeeding year for payment of such increased benefits and determine the level of benefits to
be paid during such year. If, during such year, it is determined by the director that there are in-
sufficient funds to increase benefits to the level fixed by the director, the director may reduce the
level of benefits payable under this subsection.
     (d) The increase in benefits to workers is payable in the first instance by the insurer or self-
insured employer subject to reimbursement from the Workers’ Benefit Fund by the director. If the
Enrolled House Bill 4027 (HB 4027-A)  Page 3
insurer is a member of the Oregon Insurance Guaranty Association and becomes insolvent and the
Oregon Insurance Guaranty Association assumes the insurer’s obligations to pay covered claims of
subject workers, including Retroactive Program benefits, the benefits are payable in the first in-
stance by the Oregon Insurance Guaranty Association, subject to reimbursement from the Workers’
Benefit Fund by the director.
     SECTION 6. (1) The amendments to ORS 656.506 by section 5 of this 2026 Act become
operative on January 1, 2027.
     (2) Notwithstanding the operative date set forth in subsection (1) of this section, the Di-
rector of the Department of Consumer and Business Services and the Director of the De-
partment of Revenue may take any action before the operative date set forth in subsection
(1) of this section that is necessary for the directors to administer ORS 656.506, as amended
by section 5 of this 2026 Act, on or after the operative date set forth in subsection (1) of this
section.
     SECTION 7. ORS 656.506, as amended by section 5 of this 2026 Act, is amended to read:
     656.506. (1) As used in this section:
     (a) “Employee” means a subject worker as defined in ORS 656.005.
     (b) “Employer” means a subject employer as defined in ORS 656.005.
     (2) Every employer shall retain from the moneys earned by all employees an amount determined
by the Director of the Department of Consumer and Business Services for each hour or part of an
hour the employee is employed and pay the money retained in the manner and at such intervals as
the director shall specify.
     (3) In addition to all moneys retained under subsection (2) of this section, the director shall as-
sess each employer an amount equal to that assessed pursuant to subsection (2) of this section. The
assessment must be paid in such manner and at such intervals as the director may specify.
     (4)(a) The Department of Consumer and Business Services shall deposit moneys collected pur-
suant to subsections (2) and (3) of this section, and any accrued cash balances, into the Workers’
Benefit Fund, and the BOLI Expenses Fund established under section 2 of this 2026 Act, in accord-
ance with subsections (5) to (8) of this section.
     (b) Subject to the limitations in subsections (2) and (3) of this section, the amount of the as-
sessments provided in subsections (2) and (3) of this section may be adjusted annually to enable the
department to:
     (A) Meet the needs of the Workers’ Benefit Fund for the expenditures of the department in
carrying out the department’s functions and duties pursuant to subsection (10) of this section and
ORS 656.445, 656.622, 656.625, 656.628 and 656.630; and
     (B) Deposit in the BOLI Expenses Fund the amount determined under subsection (6) of this
section.
     (c) The amount of the assessments provided for under subsections (2) and (3) of this section shall
be computed using the assessment rates determined under subsections (5) and (6) of this section.
     (d) The assessment rates under subsections (5) and (6) of this section shall be determined sepa-
rately.
     (e) Factors to be considered in determining the assessment rates must include, but not be limited
to, the respective cash balances as determined by the director and estimated expenditures and re-
venues of the Workers’ Benefit Fund and the BOLI Expenses Fund.
     (5) The Legislative Assembly intends that the department set assessment rates pursuant to
subsections (2) and (3) of this section so that at the end of the period for which the rates are ef-
fective, the balance of the Workers’ Benefit Fund is an amount of not less than 12 months of
projected expenditures from the fund in regard to the department’s functions and duties under sub-
section (10) of this section and ORS 656.445, 656.622, 656.625, 656.628 and 656.630, in a manner that
minimizes the volatility of the rates assessed.
     (6)(a) The Legislative Assembly intends that the department set assessment rates pursuant to
subsections (2) and (3) of this section so that, on or before June 30 of each year, there shall have
been deposited in the BOLI Expenses Fund, for the purposes of funding the expenses incurred by the
Enrolled House Bill 4027 (HB 4027-A)  Page 4
Commissioner of the Bureau of Labor and Industries in carrying out the duties set forth in ORS
651.050, and reimbursing the actual administrative expenses incurred by the Director of the De-
partment of Consumer and Business Services described in section 2 (3) of this 2026 Act, at least the
greater of:
     [(A) On or before June 30, 2029, $4.25 million.]
     [(B) On or before June 30, 2030, the greater of:]
     [(i) $4.25 million; or]
     [(ii) 12 months of projected expenses from the fund, including:]
     [(I) $4.25 million adjusted for any increase in the costs of Bureau of Labor and Industries posi-
tions; and]
     [(II) The reimbursements described in section 2 (3) of this 2026 Act.]
     [(C) On or before June 30, 2031, and June 30 of each subsequent year, the greater of:]
     [(i)] (A) $9.5 million; or
     [(ii)] (B) 12 months of projected expenses from the fund, including:
     [(I)] (i) $9.5 million adjusted for any increase in the costs of Bureau of Labor and Industries
positions; and
     [(II)] (ii) The reimbursements described in section 2 (3) of this 2026 Act.
     (b) The department shall set assessment rates for purposes of this subsection so as to:
     (A) Minimize the volatility of the rates; and
     (B) [Create] Maintain a 12-month reserve in the fund.
     (c) New positions funded by the assessments on or after July 1, 2031, may not exceed the cu-
mulative cost of $5.25 million per year as of July 1, 2031.
     (7)(a) If the department determines that the balance of the Workers’ Benefit Fund will fall below
the balance required under subsection (5) of this section, the department shall devise and report to
the Workers’ Compensation Management-Labor Advisory Committee a plan to increase the balance
to the required amount.
     (b) The department may set the assessment rate determined under subsection (5) of this section
at a higher level if the department determines that a higher assessment rate is necessary to avoid
unintentional program or benefit reductions in the time period immediately following the period for
which the rate is being set.
     (8)(a) If the department determines that the balance of the BOLI Expenses Fund will fall below
the reserve required under subsection (6) of this section, the department, in consultation with the
Bureau of Labor and Industries, shall devise and report to the Workers’ Compensation
Management-Labor Advisory Committee a plan to increase the reserve to the required amount.
     (b) The department may set the assessment rate determined under subsection (6) of this section
at a higher level if the department determines that a higher assessment rate is necessary to avoid
unintentional program or benefit reductions in the time period immediately following the period for
which the rate is being set.
     (9) Every employer required to pay the assessments referred to in this section shall make and
file a report of employee hours worked and amounts due under this section upon a combined report
form prescribed by the Department of Revenue. The report must be filed with the Department of
Revenue:
     (a) At the times and in the manner prescribed in ORS 316.168 and 316.171; or
     (b) Annually as required or allowed pursuant to ORS 316.197, 657.571 or 657B.150.
     (10)(a) There is established a Retroactive Program for the purpose of providing increased bene-
fits to claimants or beneficiaries eligible to receive compensation under the benefit schedules of ORS
656.204, 656.206, 656.208 and 656.210 that are lower than currently being paid for like injuries.
However, benefits payable under ORS 656.210 may not be increased by the Retroactive Program for
claimants whose injury occurred on or after April 1, 1974.
     (b) Notwithstanding the formulas for computing benefits provided in ORS 656.204, 656.206,
656.208 and 656.210, the increased benefits payable under this subsection must be in such amount
as the director considers appropriate.
Enrolled House Bill 4027 (HB 4027-A)  Page 5
     (c) The director shall annually compute the amount which may be available during the suc-
ceeding year for payment of such increased benefits and determine the level of benefits to be paid
during such year. If, during such year, it is determined by the director that there are insufficient
funds to increase benefits to the level fixed by the director, the director may reduce the level of
benefits payable under this subsection.
     (d) The increase in benefits to workers is payable in the first instance by the insurer or self-
insured employer subject to reimbursement from the Workers’ Benefit Fund by the director. If the
insurer is a member of the Oregon Insurance Guaranty Association and becomes insolvent and the
Oregon Insurance Guaranty Association assumes the insurer’s obligations to pay covered claims of
subject workers, including Retroactive Program benefits, the benefits are payable in the first in-
stance by the Oregon Insurance Guaranty Association, subject to reimbursement from the Workers’
Benefit Fund by the director.
     SECTION 8. The amendments to ORS 656.506 by section 7 of this 2026 Act become oper-
ative on July 1, 2031.
     SECTION 9. ORS 656.605 is amended to read:
     656.605. (1) The Workers’ Benefit Fund is created in the State Treasury, separate and distinct
from the General Fund. Moneys in the fund shall be invested in the same manner as other state
moneys and investment earnings shall be credited to the fund. The fund shall consist of the follow-
ing:
     (a) Moneys received pursuant to ORS 656.506.
     (b) Moneys recovered under ORS 656.054.
     (c) Penalties recovered under ORS 656.735.
     (d) All moneys received by the Director of the Department of Consumer and Business Services
pursuant to law or from any other source for purposes for which the fund may be expended.
     (2) Moneys in the Workers’ Benefit Fund may be expended for the following purposes:
     (a) Expenses of programs under ORS 656.445, 656.506, 656.622, 656.625, 656.628 and 656.630.
     (b) Proceedings against noncomplying employers pursuant to ORS 656.054 and 656.735.
     (c) Expenses of vocational assistance on claims, the cost of which was imposed pursuant to
section 15, chapter 600, Oregon Laws 1985.
     (d) Payment of supplemental temporary disability benefits for workers employed in more than
one job at the time of injury and reimbursement of the costs of administering payments resulting
from elections by insurers and self-insured employers as provided by ORS 656.210 (5).
     (e) Payments made to injured workers pursuant to section 6a, chapter 865, Oregon Laws 2001.
     (f) Expenses of the Bureau of Labor and Industries for enforcing ORS 659A.040, 659A.043,
659A.046, 659A.049 and 659A.052, subject to an agreement between the Director of the Department
of Consumer and Business Services and the Commissioner of the Bureau of Labor and Industries.
The agreement must include, but is not limited to, the amount of funds to be transferred to the bu-
reau for enforcing ORS 659A.040, 659A.043, 659A.046, 659A.049 and 659A.052 and the information
relating to the enforcement of ORS 659A.040, 659A.043, 659A.046, 659A.049 and 659A.052 that the
bureau must report to the director.
     (g) Reimbursement to the insurer or self-insured employer for the amount of permanent total
disability benefits paid after the date of the notice of closure that was upheld pursuant to ORS
656.206.
     (h) Reimbursement of vocational benefit expenses as provided in ORS 656.313.
     (3) Subject to the following provisions, all moneys in the fund are appropriated continuously to
the Director of the Department of Consumer and Business Services to carry out the activities for
which the fund may be expended:
     (a) Moneys received pursuant to ORS 656.054 and 656.735 and transfers made pursuant to ORS
705.148 may be expended only to carry out the provisions of ORS 656.054 and 656.735 and section
15, chapter 600, Oregon Laws 1985.
     (b) Moneys received pursuant to ORS 656.506 and the transfers of unexpended and unobligated
moneys in the Retroactive Reserve, Reemployment Assistance Reserve, Reopened Claims Reserve
Enrolled House Bill 4027 (HB 4027-A)  Page 6
and Handicapped Workers Reserve referred to in ORS 656.506, 656.622, 656.625 and 656.628 (All 1993
Edition) may be expended only to carry out the programs referred to in ORS 656.506, 656.622,
656.625, 656.628 and 656.630.
     (4) Notwithstanding any other provision of this chapter, if the director determines at any time
that there are insufficient moneys in the Workers’ Benefit Fund to pay the expenses of programs for
which expenditure of the fund is authorized, the director may reduce the level of benefits payable
accordingly.
     (5) Moneys in the fund may not be transferred to the BOLI Expenses Fund established
under section 2 of this 2026 Act for the purpose of complying with ORS 656.506 (6) or (8).
     SECTION 10. ORS 656.630 is amended to read:
     656.630. (1) There is transferred to and continuously appropriated to the Oregon Institute of
Occupational Health Sciences of the Oregon Health and Science University, the following amounts
from the following sources:
     (a) The amount of revenue equivalent to one-sixteenth of one cent of the money deductible from
workers’ wages pursuant to ORS 656.506 (2) assessed at the rate set by the Director of the De-
partment of Consumer and Business Services under ORS 656.506 (5).
     (b) An amount equal to the amount raised by paragraph (a) of this subsection from those as-
sessments made pursuant to ORS 656.612 (2).
     (2) The moneys referred to in subsection (1) of this section may only be used for paying the
expenses of the Oregon Institute of Occupational Health Sciences. If the Director of the Department
of Consumer and Business Services determines adequate funds are available and the director re-
duces or suspends for a period of time the assessments made pursuant to ORS 656.506 (2) and 656.612
(2), the reduction or suspension of the assessments does not terminate the transfers to the Oregon
Institute of Occupational Health Sciences authorized in subsection (1) of this section.
     (3) Annually, the Oregon Institute of Occupational Health Sciences shall file a report with the
Oregon Health and Science University, with a copy to the Director of the Department of Consumer
and Business Services, describing the activities in sufficient detail for which moneys received under
this section during the year have been obligated or expended.
     SECTION 11. ORS 279C.825 is amended to read:
     279C.825. (1)(a) The Commissioner of the Bureau of Labor and Industries, by order, shall estab-
lish a fee to be paid by the public agency that awards a public works contract subject to ORS
279C.800 to 279C.870. The commissioner shall use the fee to pay the costs of:
     (A) Surveys to determine the prevailing rates of wage;
     (B) Administering and providing investigations under and enforcement of ORS 279C.800 to
279C.870; and
     (C) Providing educational programs on public contracting law under the Public Contracting
Code.
     (b) The commissioner shall establish the fee at 0.1 percent of the contract price. However, in
no event may a fee be charged and collected that is less than $250 or more than [$7,500] $12,500.
     (2) The commissioner shall pay moneys received under this section into the State Treasury. The
moneys shall be credited to the Prevailing Wage Education and Enforcement Account created by
ORS 651.185.
     (3) The public agency shall pay the fee at the time the public agency notifies the commissioner
under ORS 279C.835 a contract subject to the provisions of ORS 279C.800 to 279C.870 has been
awarded.
     SECTION 12. Section 13 of this 2026 Act is added to and made a part of ORS 279C.800 to
279C.870.
     SECTION 13. (1) The Commissioner of the Bureau of Labor and Industries shall submit
a report, in the manner provided in ORS 192.245, to the interim committees of the Legislative
Assembly relating to labor, that examines whether the maximum fee amount allowed under
ORS 279C.825 (1)(b) raises enough revenue for the Bureau of Labor and Industries to meet
its staffing needs.
Enrolled House Bill 4027 (HB 4027-A)  Page 7
   (2) The report shall be submitted no later than September 15 of each even-numbered
year.
   SECTION 14. 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 House February 27, 2026  Received by Governor:
  ........................M.,........................................................., 2026
       ..................................................................................
  Approved:
  Timothy G. Sekerak, Chief Clerk of House
  ........................M.,........................................................., 2026
       ..................................................................................
  Julie Fahey, Speaker of House
  ..................................................................................
  Tina Kotek, Governor
Passed by Senate March 4, 2026
  Filed in Office of Secretary of State:
       ..................................................................................   ........................M.,........................................................., 2026
  Rob Wagner, President of Senate
  ..................................................................................
  Tobias Read, Secretary of State
Enrolled House Bill 4027 (HB 4027-A)  Page 8