By Maureen McGee, Of Counsel, Co-Chair: Public Policy, Government Affairs & Disputes Practice Group
The Oregon Legislature adjourned the 2026 short legislative session on March 6, concluding six weeks of work shaped by fiscal uncertainty, federal policy changes, and a growing emphasis on economic development. Although even-numbered year sessions are limited in both duration and the number of measures legislators may introduce, lawmakers approved several bills with significant implications for Oregon’s energy, environmental, and natural resources sectors.
The session was heavily influenced by the passage of House Resolution 1 (HR 1) by Congress shortly after the 2025 legislative session adjourned. Changes to federal funding and renewable energy tax incentives prompted the Legislature to prioritize measures designed to preserve investment in Oregon’s energy infrastructure while maintaining budget stability. At the same time, policymakers continued efforts to streamline permitting, improve regulatory efficiency, and address long-term challenges involving energy generation, transportation funding, and natural resource management.
Energy and Environmental Policy
Renewable energy development remained a central legislative priority. HB 4031 creates a temporary exemption from Energy Facility Siting Council (EFSC) site certificate requirements for certain renewable energy facilities seeking to qualify for shortened federal clean energy tax credit deadlines established under HR 1. The measure is intended to accelerate project development and preserve access to federal incentives.
Lawmakers also approved HB 4076, commonly referred to as the “surplus interconnection” bill. The legislation simplifies land use approval for certain energy facilities that utilize existing unused electrical interconnection capacity and require minimal new transmission infrastructure.
Additional environmental legislation included HB 4102, authorizing the Department of Environmental Quality (DEQ) to enter agreements that expedite permitting and regulatory review, and HB 4144, establishing Oregon’s battery producer responsibility program to improve battery collection and recycling.
Several high-profile energy proposals did not advance but are expected to return in future sessions, including SB 1541 (Climate Superfund Cost Recovery Program), HB 4080 (balcony solar), HB 4046 (advanced nuclear feasibility study), and SB 1582 (distributed power plant programs).
Natural Resources and Land Use
Natural resources policy was dominated by debate over agricultural land use. HB 4153, one of the session’s most closely watched measures, creates a new “farm store” category for properties located on Exclusive Farm Use (EFU) and mixed farm-forest lands. The legislation allows qualifying farm stores of up to 10,000 square feet to sell products produced on-site or within the local agricultural region, including prepared food and beverages. The bill provides farmers with greater flexibility to diversify revenue while responding to concerns raised by proposed administrative rule changes issued in 2025.
Lawmakers also enacted HB 4130, clarifying eligibility for farmland special assessment for certain agricultural processing facilities, and HB 4004, providing temporary tax relief for small tract forestland owners affected by widespread Douglas-fir mortality. In addition, HJM 201 urges Congress to permanently extend federal tax relief for wildfire victims.
Notable natural resources proposals that failed to pass included HB 4105, addressing sustainable timber harvest levels on state forestlands, HB 4049, concerning voluntary groundwater agreements in the Greater Harney Valley, and SB 1540 and SB 1553, both addressing wildfire-related insurance and utility regulation.
Broader Legislative Trends
Beyond individual policy areas, several broader themes emerged during the session. Permitting reform became a growing bipartisan priority, with HB 4084, HB 4020, and HB 4021 advancing the Governor’s efforts to improve coordination among state agencies and increase permitting efficiency for economic development projects.
The Legislature also responded to federal tax changes through SB 1507, which disconnects Oregon’s tax code from several new federal tax deductions adopted under HR 1. Meanwhile, transportation funding continued to dominate policy discussions following passage of SB 1599, which advanced the statewide transportation funding referendum to the May 2026 ballot. Voters ultimately rejected the funding package, ensuring transportation finance will remain a major issue during the 2027 session.
Looking Ahead
The 2027 long legislative session is expected to revisit many issues left unresolved this year, including long-term transportation funding, implementation of federal funding changes, climate policy, transmission development, renewable energy permitting, advanced nuclear energy, wildfire mitigation, and Oregon’s evolving approach to economic development.
For readers interested in a more comprehensive review of the measures considered during the 2026 session, the Oregon Legislative Policy and Research Office (LPRO) publishes detailed Legislative Summary Reports covering every bill that received a public hearing. Revenue measures are summarized separately by the Legislative Revenue Office, while budget information is available through the Legislative Fiscal Office. Together, these resources provide valuable additional context for businesses, local governments, developers, landowners, and others following Oregon’s evolving energy and natural resources policy landscape.
For a more in-depth look at environmental and natural resources highlights from this legislative session, see my full article in the Oregon State Bar Environmental & Natural Resources Law Section E-Outlook Newsletter.
Filed under Energy, Environmental, Government Relations, Legislation & New Laws, News & Publications