Preliminary discussion draft

November 3, 2020 General Election

Initiative Petition #44

“Decriminalizes personal, non-commercial possession of most drugs;

establishes fund to create addiction recovery centers”

Draft Estimate of Racial/Ethnic Impact:

The Oregon Criminal Justice Commission (CJC) received a written request from a member of
the Legislative Assembly from each major political party requesting a racial and ethnic impact
statement pursuant to ORS 137.685 for a state measure that is related to crime and likely to have
an effect on the criminal justice system.

Criminal Justice System Changes Examined by Race/Ethnicity

The initiative changes several laws concerning criminal sentencing for the possession of
controlled substances (PCS). According to IP44, PCS convictions will be changed to criminal
violations, except in certain circumstances including when the subject possesses a substantial
quantity, which would be a misdemeanor, or is convicted of a commercial drug offense, which
would be a felony.

Table 1. Comparison of 2019 PCS

Convictions to Estimated Convictions if IP44 were Passed
Estimated
2019 PCS Convictions
Convictions after IP44
Race/Ethnicity Misd Felony Total Misd Felony Total % Chg
Asian 16 19 35 5 1 6 -82.9%
Black 120 69 189 9 3 12 -93.7%
Hispanic 238 198 436 40 19 59 -86.5%
Native 27 25 52 1 2 3 -94.2%
Unknown 5 4 9 2 0 2 -77.8%
White 1,733 1,603 3,336 219 77 296 -91.1%
Total 2,139 1,918 4,057 276 102 378 -90.7%

CJC estimates that if IP44 were to pass, a substantial reduction in the number of felony and
misdemeanor convictions for PCS would follow. The total number of convictions for PCS would
fall from 4,057 to 378, a difference of 3,679, or nearly 91%. This reduction would also be
substantial for all racial groups, ranging from 82.9% for Asian Oregonians to approximately 94%
for Native and Black Oregonians. This means that approximately 1,800 fewer Oregonians per
year are estimated to be convicted of felony PCS and nearly 1,900 fewer convicted of
misdemeanor PCS. Prior academic research suggests this drop in convictions will result in fewer
collateral consequences stemming from criminal justice system involvement.

Beyond the reductions described above, the changes proposed by IP44 would also lead to a
reduction in racial disparities for PCS convictions at both the misdemeanor and felony level.
 Preliminary discussion draft

Using a disparity metric called the Raw Differential Representation, CJC estimates that racial
disparities for misdemeanor and felony PCS convictions will be narrowed substantially if IP44
passes.

While data is available to estimate the possible effect of IP44 on individuals convicted of PCS,
data concerning victims of individuals convicted of drug possession are not available. Data from
the Oregon Uniform Crime Reporting Program indicates that from January to May 2020, there
were 4,796 distinct victims of all drug related crimes (this includes PCS, but also all other drug
related offenses). Unfortunately, while other demographic information is available from this
source, information on victim race/ethnicity is not.
 IP 44 Racial and Ethnic Impact Statement
Oregon Criminal Justice Commission

16 July 2020

Background

The Oregon Criminal Justice Commission (CJC) received a written request from a member of
the Legislative Assembly from each major political party requesting a racial and ethnic impact
statement pursuant to ORS 137.685 for a state measure that is related to crime and likely to have
an effect on the criminal justice system. This request concerns ballot initiative IP 44, titled the
Drug Addiction Treatment and Recovery Act1.

This statement describes the racial and ethnic impact to the criminal offender population that
includes individuals convicted of a felony or misdemeanor level drug possession offense. There
are several components of IP 44 that are not related to crime or the criminal justice system, and
this statement does not include the racial and ethnic impact of those components. As such, the
primary focus of this analysis centers on Sections 11 through 22 of the initiative.

Table 1. Proposed Changes in IP 44 to Possession of Controlled Substances (PCS) compared to

Current Law
Current Law IP 44
Felony Felony
Subject is convicted of a commercial drug
Subject has a prior felony conviction
offense
Subject has two or more misdemeanor
convictions for PCS
Subject possesses a substantial quantity of
controlled substances
Subject is convicted of a commercial drug
offense
Misdemeanor Misdemeanor
Subject possesses a substantial quantity of
All other non-felony PCS
controlled substances
Violation Violation
All other non-felony and non-misdemeanor
PCS

IP 44 changes the sentencing for unlawful possession of controlled substances (PCS) statutes. As
shown in Table 1, under current law, PCS convictions are misdemeanors, except in certain
circumstances in which they are felonies, including when the subject has a prior felony
conviction, has two or more prior PCS convictions, possesses a substantial quantity, or is
convicted of a commercial drug offense. IP 44 changes PCS convictions to violations except in

1
http://oregonvotes.org/irr/2020/044text.pdf

1
certain circumstances including when the subject possesses a substantial quantity, which is a
misdemeanor, or is convicted of a commercial drug offense, which is a felony.

As discussed in greater detail below, the methodology and data sources used for this statement
mirror previous analyses regarding possession of controlled substances conducted by the CJC.
House Bill 2355 (2017) required CJC to study the effect of the reduction in possession penalties
on the criminal justice system and the composition of convicted offenders2. CJC used data from
the Department of Corrections (DOC) that includes felony and misdemeanor convictions for
drug possession to compile that report.

Finally, this statement is required to show an estimate of the racial and ethnic composition of the
crime victims who may be affected by the state measure. Unfortunately, a comprehensive data
source on victims of individuals convicted of drug possession crimes is not available. The
Uniform Crime Reporting (UCR) Program housed at Oregon State Police collects data on
reported crime from law enforcement agencies in the state. The UCR Program recently released
the Oregon Crime Data Dashboards3, which displays crimes reported to law enforcement from
January to May 2020. The dashboard provides summary level data on a publicly available
website that can be filtered by several variables. Under the Victims Dashboard, the data can be
filtered by drug/narcotic offenses. This is more broadly defined than drug possession offenses,
but is used here for example purposes. From January to May 2020, 4,796 distinct victims are
displayed. The victim type for all offenses is displayed as society/public. The victim
demographics that would be displayed by age, sex, and race are not available for this crime type.

Methods and Analysis

Current Convictions for PCS

CJC queried misdemeanor and Table 2. 2019 PCS Convictions

felony convictions for PCS in Race/Ethnicity Misdemeanor Felony Total
2019 where PCS was the most Asian 16 19 35
serious or only conviction.4 Black 120 69 189
Following this definition, in 2019 Hispanic 238 198 436
there were 2,139 misdemeanor Native 27 25 52
Unknown 5 4 9
PCS convictions and 1,918
White 1,733 1,603 3,336
felony PCS convictions. Table 2 Total 2,139 1,918 4,057
displays the counts by race and
ethnicity.

2
https://www.oregon.gov/cjc/CJC%20Document%20Library/2019PCSReport.pdf
3
https://www.oregon.gov/osp/Pages/Uniform-Crime-Reporting-Data.aspx
4
While PCS charges often accompany other felony charges, the CJC restricts the analysis to instances where PCS
was the only or most serious charge because it is in those cases that CJC can best estimate the effects that IP 44
could have on the offender population. It is possible that in cases where PCS charges co-occur with other felonies,
such as property or other statutory crimes, that sentencing outcomes could be different should IP 44 go into effect.
However, these cases will likely result in a criminal conviction due to the determining factor of the other, more
serious felonies.

2
Estimated Changes to PCS Population

Under IP 44, convictions for commercial drug offenses would remain felonies. To identify those
offenders in 2019, CJC assumes that current felony drug PCS convictions showing a crime
category 6 or higher on the sentencing guidelines grid would remain felonies. Of the total 1,918
felony convictions in 2019, five percent, or 102 total convictions, would be estimated to remain
felonies under IP 44. A breakdown by race/ethnicity for these felonies is reported in the third
column of Table 3.

Table 3. 2019 PCS Convictions with IP 44

Race/Ethnicity Misdemeanor Felony Total % Reduction
Asian 5 1 6 -82.9%
Black 9 3 12 -93.7%
Hispanic 40 19 59 -86.5%
Native 1 2 3 -94.2%
Unknown 2 0 2 -77.8%
White 219 77 296 -91.1%
Total 276 102 378 -90.7%

CJC assumes that 14 percent of felony PCS convictions, which amounts to 276, were for
possession of a substantial quantity of narcotics, which under IP 44 would be misdemeanors. To
arrive at this estimation, CJC identified the felony convictions in 2019 that were not commercial
drug offenses but also were not convictions for individuals with either a felony record or a
criminal history containing two or more prior PCS convictions. A breakdown by race/ethnicity
for these convictions is reported in the second column of Table 3. Finally, all remaining
convictions under IP 44 would be violations and would not be supervised or included in the DOC
population.

Comparing Tables 2 and 3 provides an initial understanding of the magnitude of the change that
could be ushered in by the passage of IP 44. As shown in column five of Table 3, in total CJC
estimates that convictions for PCS would be reduced by 3,679, or 90.7 percent. When broken
down by race, the reduction in convictions overall ranges from 82.9 percent for Asian
Oregonians to almost 94 percent for Black Oregonians.

To further evaluate the racial and ethnic impact of this sentencing change, CJC employed a
disproportionality metric known as the Raw Differential Representation, or RDR.5 Substantively,
the RDR represents the reduction in convictions that would be required to reach parity with
white individuals given population differences across different races/ethnicities. A positive RDR
indicates a minority racial/ethnic minority is overrepresented in the system compared to white
individuals, whereas a negative RDR indicates a racial/ethnic minority is underrepresented in the
system compared to white individuals. The goal, when assessing the RDR, is for each
racial/ethnic group to be as close to white individuals as possible, as this would indicate that the
group is neither underrepresented nor overrepresented compared to the baseline (white) group.

5
https://www.oregon.gov/cjc/CJC%20Document%20Library/2019PCSReport.pdf

3
Figure 1 displays the RDRs for 2019 felony convictions and the estimated felony convictions
under IP 44. For 2019 felony convictions, there would need to be 24 fewer convictions for Black
individuals to reach parity with white individuals. Under the estimated impact of IP 44, the RDR
drops to one. Asian individuals are underrepresented compared to white individuals in 2019
convictions and under the estimated impact of IP 44, though to a lesser extent under IP 44. 2019
felony convictions for Hispanic individuals show a negative RDR, indicating that 85 additional
Hispanic individuals would need to be convicted to achieve parity with white individuals. Under
the estimated impact of IP 44, Hispanic individuals would instead be overrepresented by five.
The RDR for Native Americans is the same under 2019 convictions and under the estimated
impact of IP 44. The RDR analysis indicates that the estimated impact of IP 44 would be a
decrease in overrepresentation of Black individuals in felony convictions. In general, Figure 1
shows that RDRs are closer to zero with the impact of IP 44, indicating a decrease in disparity.

Figure 1. 2019 Felony Conviction RDRs

-81 Asian
-4

Black 24
1

-85 Hispanic
5

Native American 1
1

-100 -80 -60 -40 -20 0 20 40 60 80 100

2019 Convictions Convictions with IP 44

Figure 2 displays the RDRs for 2019 misdemeanor convictions and the estimated misdemeanor
convictions under IP 44. For 2019 misdemeanor convictions, there would need to be 75 fewer
convictions for Black individuals to reach parity with white individuals. Under the estimated
impact of IP 44, that RDR drops to three. The RDR for 2019 misdemeanor convictions indicates
that Asian and Hispanic individuals are both underrepresented in convictions compared to white
individuals, and that remains true under IP 44 for Asian individuals. One fewer Hispanic
individual would need to be convicted of a misdemeanor under IP 44 in order to reach parity
with white individuals. Native American individuals were moderately overrepresented in 2019
convictions (by one), and under the estimated impact of IP 44 would be moderately
underrepresented compared to whites (by two). The RDR analysis indicates that IP 44 would
decrease overrepresentation of Black and Native American individuals in misdemeanor
convictions compared to white individuals.

4
 Figure 2. 2019 Misdemeanor Conviction RDRs

-92
-9 Asian

75
Black 3

-68
1 Hispanic

Native American 1
-2

-100 -80 -60 -40 -20 0 20 40 60 80 100

2019 Convictions Convictions with IP 44

In conclusion, the RDRs for felony and misdemeanor convictions are closer to zero with the
impact of IP 44. For Black individuals, the RDR drops to one for misdemeanor convictions and
three for felony convictions. For Hispanic individuals, the RDR changes from an
underrepresentation in convictions, to a value of one for misdemeanor convictions and five for
felony convictions. The RDR for Native Americans is unchanged for felony convictions at one,
and drops to negative two for misdemeanor convictions. As the RDRs trend to zero, this
indicates a decrease in disparity for individuals convicted of misdemeanor and felony PCS. In
addition, approximately 1,800 fewer Oregonians per year are estimated to be convicted of felony
PCS and nearly 1,900 fewer convicted of misdemeanor PCS. Prior research suggests this drop in
convictions will result in fewer collateral consequences stemming from criminal justice system
involvement (Ewald and Uggen, 2012)6.

6
Ewald, A., and Uggen, C. 2012. “The Collateral Effects of Imprisonment on Prisoners, Their Families, and
Communities.” In J. Petersilia & K. Reitz (Eds.), The Oxford Handbook on Sentencing and Corrections (pp. 83-
103). New York, NY: Oxford University Press.

5
 Preliminary Discussion draft

Measure Number: Initiative Petition 2020-044

Subject: Provides Statewide Addiction/Recovery Services;

Marijuana Taxes Partially Finance; Reclassifies
Possession/Penalties for Specified Drugs

Government Unit Affected: State government and local governments

Prepared by: Ali Webb, Department of Administrative Services

Reviewed by: Kate Nass, Department of Administrative Services

Date: July 2, 2020

Comments
Initiative Petition 44 directs the Oregon Health Authority (OHA) to establish statewide
Addiction Recovery Centers (ARCs) and provide community access to care grants, changes
the distribution of marijuana tax revenues and reduces drug penalties for possession of some
drugs. The measure has two primary components: redistribution of marijuana revenues to
fund ARCs and Community Access to Care grants and impacts related to the
decriminalization of certain drug offenses.

Marijuana Revenue Redistribution

Initiative Petition 44 creates the Drug Treatment and Recovery Services Fund within the State
Treasury to fund addiction and recovery services for all Oregon residents. It transfers
quarterly marijuana revenue in excess of $11.25 million to the Drug Treatment and Recovery
Services Fund. By applying a cap on the amount of funding for existing recipients, less
funding is available to some state agency programs and local governments. The measure
establishes the Oversight and Accountability Council within the Oregon Health Authority to
create ARCs within coordinated care organization (CCO) service areas and fund those centers
with grants to provide drug treatment and recovery services. The Council will also provide
Community Access to Care grants to entities, either governmental agencies or community
organizations, providing drug treatment and recovery services.

Decriminalization of Certain Drug Offenses

Initiative Petition 44 decriminalizes certain drug offenses, which is expected to result in cost
savings from less arrests, probation supervisions and incarcerations for individuals subject to
drug related sentences. The measure directs savings that result from decriminalizing certain
drug offenses are to be reinvested in the Drug Treatment and Recovery Services Fund to fund
additional ARC expenditures.

Fiscal Impact Summary (State Government)

Executive Branch Assumptions:

• Estimates of marijuana revenue were provided by the DAS Office of Economic

Analysis and assumed 2 quarters of distributions for the 2019-21 biennium.
 Preliminary Discussion draft

• No General Fund is appropriated by the legislature to fund the Drug Treatment and
Recovery Services Fund.
• The Criminal Justice Commission (CJC) estimated the number of probation
supervision and/or incarceration days saved by the Department of Corrections (DOC)
due to drug penalties becoming violations rather than more serious offenses. The daily
rate is assumed to be $12.067 per day, per offender. It is assumed to be a General
Fund savings.
• OHA provided the estimated expenditures related to setting up the Oversight and
Accountability Council and ARCs. It aligned its 2019-21 expenditures to correspond
to the minimum amount of initial funding to the Drug Treatment and Recovery
Services Fund, which is $57 million.
• The cap on quarterly distributions from the Oregon Marijuana Account available in
aggregate to cities, counties, the State School Fund, the State Policy Account and non-
ARC related OHA programs is $11.25 million per quarter.
• OHA non-ARC programs offering mental health, alcohol and drug abuse prevention,
early intervention and treatment services programs are assumed to receive less
marijuana revenue funding.
• The State School Fund currently receives a 40% distribution from the Oregon
Marijuana Account. The measure will reduce the distribution dollar amounts due to a
cap on the quarterly distribution amounts. The measure will not reduce State School
Fund expenditures and it is assumed that lost revenue will need to be funded by the
General Fund.

Marijuana Revenue Redistribution (State Government)

The majority of revenue received from the Oregon Marijuana Account will fund a newly
established Drug Treatment and Recovery Services Fund. The initial minimum funding is
mandated to be at least $57 million, however the source of funding is not stated in the
measure. Based on the June 2020 revenue forecast, the 2019-21 estimated amount of
marijuana revenue available to the Drug Treatment and Recovery Services Fund is $61.1
million and should be sufficient to meet the initial funding requirement. Estimated marijuana
revenue available to the Drug Treatment and Recovery Services Fund is estimated at $182.4
million for the 2021-23 biennium. The measure will maintain the current Marijuana Tax
distribution formula to schools, state law enforcement, local government and addictions and
behavioral health services but limit those distributions to a total of $11.25 million per quarter.
The estimated marijuana state revenue redistribution is projected as follows:

All dollars in millons 2019-21 2021-23

Drug Treatment and Recovery Services Fund (ARCs) $ 61.1 $ 182.4
State School Fund $ (17.1) $ (73.0)
Mental Health, Alcoholism and Drug Services $ (8.6) $ (36.5)
Alcohol and Drug Abuse Prevention and Intervention $ (2.1) $ (9.1)
Oregon State Police $ (6.5) $ (27.4)
Net Increase In State Revenue $ 26.8 $ 36.4
 Preliminary Discussion draft

Revenue received by the Drug Treatment and Recovery Services Fund will be used for the
following purposes: 1) creation and administration of the Oversight and Accountability
Council, 2) facility start-up costs for ARCs, 3) ongoing operational costs for ARCs, 4) a
temporary hotline to serve Oregonians before ARCs are operational, 5) Community Access to
Care grants, and 6) costs to comply with future Secretary of State audit requests. Total
expenditures for the 2019-21 biennium are estimated at $57.3 million. Total expenditures for
the 2021-23 biennium are estimated to range from $201 million to $207 million. Expenditures
are expected to align with available revenue streams funding the Drug Treatment and
Recovery Services Fund.

The measure directs ARCs to provide addiction and recovery services to any Oregon resident
who requests them. ARCs will conduct an assessment of a client’s medical, behavioral or
other needs and determine what acute care is requested, as well as connect the client to
appropriate services for both acute and non-acute conditions in an evidence-informed, trauma-
informed, culturally responsive manner.

Initial facility ARC start-up costs and temporary hotline costs are one-time costs. All other
costs are ongoing. ARC annual costs are for running the facilities in a 24/7/365 manner and
include staffing and overhead costs. A temporary telephone ARC will be established by
February 1, 2021 to serve Oregonians as permanent ARCs are established in CCO service
areas. Community Access to Care grants are separate from ARC funding and are for
substance use disorder treatment, peer support and recovery services, permanent supportive
housing, and harm reduction interventions. Either governmental or community based
organizations are eligible for Community Access to Care grant awards.

Although the amount of marijuana revenue that is distributed to the State School Fund will be
reduced, the measure will not reduce State School Fund expenditures and lost revenue is
assumed to be funded by the General Fund.

The State Police Account, which funds the Oregon State Patrol (OSP), will receive less
marijuana revenue. The 2019-21 biennial reduction is projected at $6.5 million and the 2021-
23 estimated reduction is $27.4 million. In the current biennium, State Police Account funds
are used in the Criminal Investigation Division. Future legislative direction will determine
how to implement the loss of revenue related to this measure.

OHA will experience a reduction in marijuana revenue as funds are diverted from its Mental
Health, Alcoholism and Drug Services and its Alcohol and Drug Abuse Prevention and
Intervention programs by $10.7 million in the 2019-21 biennium and $45.6 million in the
2021-23 biennium. There may be an overlap in services offered between its existing programs
and ARCs that could potentially minimize reductions in service delivery.

Decriminalization of Certain Drug Offenses (State Government)

The measure directs DOR to transfer savings generated from less arrests, supervisions and
incarcerations from DOC to the Drug Treatment and Recovery Services Fund. DOC has
estimated the amount of savings as $0.3 million in the 2019-21 biennium and $24.5 million in
 Preliminary Discussion draft

the 2021-23 biennium. The amounts transferred to the Drug Treatment and Recovery Services
Fund will be available to fund ARC expenditures, for the same purposes described above.

All dollars in millons 2019-21 2021-23

Drug Treatment and Recovery Services Fund (ARCs) $ 0.3 $ 24.5
Reduced DOC costs (fewer criminal penalties) $ (0.3) $ (24.5)
Total $ - $ -

Fiscal Impact Summary (Local Government)

Local Government Assumptions:

• A reduction in marijuana revenue due to the redistribution of marijuana funds is

assumed to result in a reduction in programs or services at the local level.
• The savings in DOC’s community corrections expenditures will directly reduce
revenues to local governments.
• Local governments will have less community corrections costs due to the
decriminalization of certain drug offenses.

Marijuana Revenue Redistribution (Local Government)

The measure reduces the distribution of marijuana revenue in an equal amount to cities and
counties. The 2019-21 biennial reduction is $4.3 million each and the 2021-23 biennial
reduction is $18.2 million each. The total reduction for both cities and counties is $8.6 million
in the 2019-21 biennium and $36.4 million in the 2021-23 biennium. The corresponding
reductions in programs and services at city and county levels are unknown at this point.

All dollars in millons 2019-21 2021-23

Cities $ (4.3) $ (18.2)
Counties $ (4.3) $ (18.2)
Net Decrease In Local Revenue $ (8.6) $ (36.4)

Decriminalization of Certain Drug Offenses (Local Government)

Savings in community corrections costs resulting from less arrests, supervisions and
incarcerations will be transferred from DOR to the Drug Treatment and Recovery Services
Fund. Those funds will no longer be distributed to local community corrections recipients.
The estimated amount of reduced revenue due to the decriminalization of certain drug
offenses is $0.3 million in the 2019-21 biennium and $24.5 million in the 2021-23 biennium.
It is assumed that local governments should see a reduction in community correction
expenditures due to the reduction of some drug penalties.

Draft Estimate of Financial Impact:

The initiative directs the Oregon Health Authority (OHA) to establish Addiction Recovery
Centers and increase funding for other substance use disorder services, changes the
distribution of marijuana tax revenues and reduces drug penalties for possession of some
drugs.
 Preliminary Discussion draft

Marijuana Revenue Redistribution

The initiative creates the Drug Treatment and Recovery Services Fund. It redistributes
marijuana revenue above $11.25 million per quarter from existing recipients to the fund,
reducing revenue to the State School Fund, the State Police, mental health programs, and local
governments. The revenue redistributions for state agency programs are summarized below:

All dollars in millons 2019-21 2021-23

Drug Treatment and Recovery Services Fund (ARCs) $ 61.1 $ 182.4
State School Fund $ (17.1) $ (73.0)
Mental Health, Alcoholism and Drug Services $ (8.6) $ (36.5)
Alcohol and Drug Abuse Prevention and Intervention $ (2.1) $ (9.1)
Oregon State Police $ (6.5) $ (27.4)
Net Increase In State Revenue $ 26.8 $ 36.4

OHA is directed to administer grants to fund the Addiction Recovery Centers (ARCs), which
will offer 24 hour access to care every day of the year starting October 1, 2021. The grants
will be awarded to ARCs for operational expenses as well as to organizations providing
substance use disorder treatment, peer support and recovery services, permanent supportive
housing, and harm reduction interventions to be provided free of charge to the recipient of the
services.

The initiative requires the Legislature to provide $57 million in annual funding (with
increases for inflation) for the fund. Marijuana revenue is estimated at $61.1 million in 2019-
21 and $182.4 million in 2021-23, which should be sufficient to meet this requirement.

The initiative reduces the marijuana revenue distribution to cities and counties. The total
reduction is $8.6 million in 2019-21 and $36.4 million in 2021-23.

Decriminalization of Certain Drug Offenses

The initiative decriminalizes certain drug offenses and transfers the savings due to lower
spending on arrests, probation supervisions and incarcerations to the DTRSF to fund
additional ARC expenditures. These savings are estimated at $0.3 million in 2019-21 and
$24.5 million in 2021-23. This will reduce revenue for local government community
corrections functions by $0.3 million in 2019-21 and $24.5 million in 2021-23.
DocuSign Envelope ID: 2B829A38-5711-4115-B089-D379AF993856

November 3, 2020 General Election

Initiative Petition #44

“Decriminalizes personal, non-commercial possession of most drugs;

establishes fund to create addiction recovery centers”

Estimate of Financial Impact:

The initiative directs the Oregon Health Authority (OHA) to establish Addiction Recovery
Centers and increase funding for other substance use disorder services, changes the distribution
of marijuana tax revenues and reduces drug penalties for possession of some drugs.

Marijuana Revenue Redistribution

The initiative creates the Drug Treatment and Recovery Services Fund (DTRSF). It redistributes
marijuana revenue above $11.25 million per quarter from existing recipients to the DTRSF,
reducing revenue to the State School Fund, the State Police, mental health programs, and local
governments. The revenue redistributions for state agency programs are summarized below:

All dollars in millons 2019-21 2021-23

Drug Treatment and Recovery Services Fund (ARCs) $ 61.1 $ 182.4
State School Fund $ (17.1) $ (73.0)
Mental Health, Alcoholism and Drug Services $ (8.6) $ (36.5)
Alcohol and Drug Abuse Prevention and Intervention $ (2.1) $ (9.1)
Oregon State Police $ (6.5) $ (27.4)
Net Increase In State Revenue $ 26.8 $ 36.4

OHA is directed to administer grants to fund the Addiction Recovery Centers (ARCs), which
will offer 24 hour access to care every day of the year starting October 1, 2021. The grants will
be awarded to ARCs for operational expenses as well as to organizations providing substance use
disorder treatment, peer support and recovery services, permanent supportive housing, and harm
reduction interventions to be provided free of charge to the recipient of the services.

The initiative requires the Legislature to provide $57 million in annual funding (with increases
for inflation) for the DTRSF. Marijuana revenue estimated at $61.1 million in 2019-21 and
$182.4 million in 2021-23 should be sufficient to meet this requirement.

The initiative reduces the marijuana revenue distribution to cities and counties. The total
reduction is $8.6 million in 2019-21 and $36.4 million in 2021-23.

Decriminalization of Certain Drug Offenses

The initiative decriminalizes certain drug offenses and transfers the savings due to lower
spending on arrests, probation supervisions and incarcerations to the DTRSF to fund additional
ARC expenditures. These savings are estimated at $0.3 million in 2019-21 and $24.5 million in
DocuSign Envelope ID: 2B829A38-5711-4115-B089-D379AF993856

2021-23. This will reduce revenue transferred from the Department of Corrections for local
government community corrections by $0.3 million in 2019-21 and $24.5 million in 2021-23.

Certification:
We, the undersigned, hereby certify that, pursuant to ORS 250.127(3), we have prepared the
statement described under “Estimate of Financial Impact.”

7/13/2020
__________________________________________ __________________
Bev Clarno, Secretary of State Date

7/8/2020
__________________________________________ __________________
Tobias Read, State Treasurer Date

7/8/2020
__________________________________________ __________________
Katy Coba, Director, Date
Department of Administrative Services

7/8/2020
__________________________________________ __________________
Satish Upadhyay, Interim Director, Date
Department of Revenue

7/9/2020
__________________________________________ __________________
Tim Collier, City, County, or District representative Date
 LC 296-EXPLAN
(IRR 44, 2020)
6/3/20 (SCT/ps)

THIS EXPLANATION HAS NOT BEEN

REVIEWED OR APPROVED BY THE
LEGISLATIVE COUNSEL COMMITTEE.

MEASURE NO. ______

PROVIDES STATEWIDE ADDICTION/RECOVERY SERVICES;

MARIJUANA TAXES PARTIALLY FINANCE; RECLASSIFIES
POSSESSION/PENALTIES FOR SPECIFIED DRUGS

Submitted to the Electorate of Oregon by Initiative Petition to be voted

on at the General Election, November 3, 2020.

1 Explanation
2 By the Legislative Counsel Committee pursuant to ORS 251.225.
3
4 Ballot Measure XX mandates the establishment of at least one addiction
5 recovery center in each existing coordinated care organization service area in
6 the state. The centers triage the acute needs of persons who use drugs, provide
7 connections to other services and offer peer support. The measure requires
8 that services provided by the centers be free of charge to the person receiving
9 the services and allows service providers to seek reimbursement from
10 insurance providers. The measure establishes the Oversight and
11 Accountability Council within the Oregon Health Authority to provide grants
12 to existing agencies or organizations to establish the centers. The measure
13 directs the council to oversee the centers and requires that the centers be
14 operational by October 1, 2021.
 Ballot Measure No. _____ (LC 296-EXPLAN) 5/28/20 Leg. Counsel

1 The measure requires that the authority establish a temporary

2 telephone addiction recovery center by February 1, 2021, and terminate the
3 temporary center by October 1, 2021. The measure also requires that the
4 Secretary of State biennially conduct a financial and performance audit of the
5 fund established by the measure.
6 To fund the centers, the measure requires legislative appropriations to
7 the authority, redirects marijuana tax account balances above $11,250,000
8 quarterly to the authority and dedicates to the authority any savings to the
9 state from reductions in arrests, incarceration and supervision resulting from
10 the measure. Current law allocates marijuana tax revenue for various uses.
11 The measure reduces the marijuana tax revenue for current uses.
12 The measure creates a Class E violation for which the maximum
13 punishment is a $100 fine or completion of a health assessment with an
14 addiction treatment professional. The measure reduces penalties for
15 possession of specified quantities of controlled substances to Class E violations.
16 The measure also reduces penalties for possession of controlled substances,
17 other than possession constituting a commercial drug offense, in amounts
18 greater than specified quantities, to a maximum of 364 days’ imprisonment, a
19 $6,250 fine, or both.
20 The measure creates a rebuttable presumption that a person applying
21 for an occupational or professional license or other authorization, and who was
22 convicted of a controlled substance Class E violation, is not unfit to hold the
23 license or other authorization.
24 ____________

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