Linn County v. Brown

334

Argued and submitted January 16; decision of Court of Appeals affirmed,

judgment of circuit court reversed, and case remanded to circuit court for

further proceedings April 23, 2020

LINN COUNTY,

Douglas County, and Yamhill County,

each a local government of the State of Oregon,

Petitioners on Review,

and

JEFFERSON COUNTY et al.,

Plaintiffs,

v.

Kate BROWN,

in her official capacity as

Governor of the State of Oregon; and

Val Hoyle, in her official capacity as Commissioner of

the Oregon Bureau of Labor and Industries,

Respondents on Review.

(CC 16CV17209) (CA A165655) (SC S066856)

461 P3d 966

The trial court granted plaintiff counties declaratory relief, excusing them

from compliance with the paid sick leave law based on Article XI, section 15, of

the Oregon Constitution. Defendants appealed, arguing that the paid sick leave

law is not a “program” within the meaning of Article XI, section 15. The Court

of Appeals reversed, holding that that provision concerns only traditional gov-

ernment programs, and that the paid sick leave law was not such a program.

Held: The paid sick leave law is not a “program” for purposes of Article XI, section

15, of the Oregon Constitution and, therefore, that constitutional provision does

not exempt plaintiffs from compliance with the paid sick leave law.

The decision of the Court of Appeals is affirmed. The judgment of the cir-

cuit court is reversed, and the case is remanded to the circuit court for further

proceedings.

En Banc

On review from the Court of Appeals.*

Sharon A. Rudnick, Harrang Long Gary Rudnick P.C.,

Portland, argued the cause and filed the briefs for petitioners

______________

* Appeal from Linn County Circuit Court, Daniel R. Murphy, Judge. 297 Or

App 330, 443 P3d 700 (2019).

Cite as 366 Or 334 (2020) 335

on review. Also on the briefs were Susan Marmaduke,

Portland, and William F. Gary, Portland.

Michael A. Casper, Assistant Attorney General, Salem,

argued the cause and filed the brief for respondents on

review. Also on the brief were Ellen Rosenblum, Attorney

General, and Benjamin Gutman, Solicitor General.

Steven C. Berman, Stoll Stoll Berne Lokting & Shlachter

PC, Portland, filed the brief for amicus curiae Family

Forward Oregon.

Ross M. Williamson, Local Government Law Group PC,

Eugene, filed the brief for amici curiae Association of Oregon

Counties, League of Oregon Cities, and Special Districts

Association of Oregon.

BALMER, J.

The decision of the Court of Appeals is affirmed. The

judgment of the circuit court is reversed, and the case is

remanded to the circuit court for further proceedings.

336 Linn County v. Brown

BALMER, J.

This case requires us to decide whether three coun-

ties are exempt from the requirements of Oregon’s paid sick

leave law under the unfunded programs provision of the

Oregon Constitution, Article XI, section 15. We conclude that

the paid sick leave law does not require local governments to

implement a “program” under that provision and, therefore,

that the counties are not exempt from that statute.

We begin by describing the statute and the con-

stitutional provision at issue here. Oregon’s paid sick leave

law was enacted in 2015 and provides that “[e]mployers that

employ at least 10 employees working anywhere in this state

shall implement a sick time policy that allows an employee

to accrue” a specified amount of paid sick time, depend-

ing on the total number of hours the employee works. ORS

653.606(1)(a). The statute defines “employer” to include both

private and public employers—including counties, cities,

and other public entities. ORS 653.601(2)(a) - (c). As relevant

here, the paid sick leave law requires all employers with 10

or more employees to adopt policies and procedures for paid

sick leave that meet minimum requirements set out in the

statute.

Twenty years before the passage of the paid sick

leave law, the voters passed Ballot Measure 30 (1996),

which had been referred from the legislature as House

Joint Resolution (HJR) 2 (1995). The enacted measure

added a new provision, Article XI, section 15, to the Oregon

Constitution. That provision requires the legislature to pro-

vide funding to local governments when it requires them to

establish new “programs” (or to increase the level of services

in existing required programs); if the legislature fails to

provide funding, the affected local governments are exempt

from the requirement of complying with the new program.

As adopted, the measure included a sunset provision, but, in

2000, the voters passed Ballot Measure 84 (2000), another

referral from the legislature, which repealed the sunset pro-

vision while retaining the rest of the original measure.

This case requires us to interpret Article XI, sec-

tion 15, which provides:

Cite as 366 Or 334 (2020) 337

“[W]hen the Legislative Assembly or any state agency

requires any local government to establish a new program

or provide an increased level of service for an existing pro-

gram, the State of Oregon shall appropriate and allocate to

the local government moneys sufficient to pay the ongoing,

usual and reasonable costs of performing the mandated

service or activity.”

Or Const, Art XI, § 15(1). A “program” is defined as “a pro-

gram or project imposed by enactment of the Legislative

Assembly or by rule or order of a state agency under which

a local government must provide administrative, financial,

social, health or other specified services to persons, govern-

ment agencies or to the public generally.” Id. § 15(2)(c).

If the legislature requires local governments to

establish a “new program” or to provide an increased level

of service for an existing program that will “require[ ] the

expenditure of money by the local government,” the “local

government is not required to comply” with that require-

ment unless the legislature provides at least 95 percent of

the cost that would be incurred by the local government.

Id. § 15(3)(a). A different subsection provides that a local

government is not required to comply with a newly imposed

“program” if the local government would have to spend in

excess of one-hundredth of one percent of its annual bud-

get to implement the program, in addition to any amount

appropriated by the legislature. Id. § 15(3)(b). That provision

effectively sets a financial threshold for a local government

to “refuse to comply” with a required program. Finally, the

central provision of Article XI, section 15, which requires

the state to fund local government compliance with new

state “programs,” does not apply to certain required expen-

ditures, the most significant of which is “[a]ny law that is

approved by three-fifths of the membership of each house of

the Legislative Assembly.” Id. § 15(7)(a).1

Article XI, section 15, also provides an exception

for private businesses in certain circumstances. If a local

government is exempt from compliance with a required

1

A number of other specific exceptions are set out in Article XI, section 15(7),

but do not affect our analysis of the scope of the provision’s constitutional direc-

tive in section 15(1).

338 Linn County v. Brown

program based on its cost and the lack of a state appropri-

ation, then, “if a nongovernment entity competes with the

local government by selling products or services that are

similar to the products and services sold under the enter-

prise activity, the nongovernment entity is not required to

comply with the state law or administrative rule or order

relating to that enterprise activity.” Id. § 15(8). An “enter-

prise activity” is defined as “a program under which a local

government sells products or services in competition with a

nongovernment entity.” Id. § 15(2)(a).

To summarize, Article XI, section 15, of the Oregon

Constitution exempts local governments from being required

to implement programs mandated by the state, if the state

has not provided adequate funding and the cost of imple-

menting the program exceeds a certain threshold. The ques-

tion before us, then, is whether the paid sick leave law, ORS

653.601 to 653.661, requires local governments with more

than 10 employees to implement a “program” under Article XI,

section 15.

FACTS AND PROCEDURAL BACKGROUND

We turn to the facts of this case. The original

plaintiffs in this action were nine Oregon counties2 that

sought declaratory relief, alleging that the paid sick leave

law required them to spend money on a program without

sufficient state reimbursement, as required by Article XI,

section 15, and that they consequently were not required

to comply with that statute.3 Defendants, the governor and

the Commissioner of the Bureau of Labor and Industries,

responded that the constitutional provision does not apply

to the paid sick leave law because that law is not a “pro-

gram” within the meaning of Article XI, section 15(1), and,

additionally, that not all nine plaintiff counties met the cost

threshold required to make Article XI, section 15(3), appli-

cable to them.

2

The declaratory judgment action was filed by Douglas, Jefferson, Linn,

Malheur, Morrow, Polk, Sherman, Wallowa, and Yamhill counties.

3

The parties do not dispute that funds were not appropriated to local govern-

ments or other employers to implement the paid sick leave law, nor do they dis-

pute that the paid sick leave law was passed by less than a three-fifths majority

in both houses of the Legislative Assembly.

Cite as 366 Or 334 (2020) 339

The parties filed cross-motions for summary judg-

ment. The trial court initially granted plaintiffs’ motion,

concluding that the paid sick leave law was an unfunded

“program” within the meaning of Article XI, section 15. The

court also denied defendants’ motion for summary judg-

ment. On reconsideration, the trial court affirmed its ruling

on the merits, but concluded that not all the plaintiffs had

met the cost threshold that would permit them to refuse to

comply with the paid sick leave law. The parties later stip-

ulated that three of the nine counties—Linn, Douglas, and

Yamhill—did meet the cost threshold and agreed that the

claims of the other six counties should be dismissed in a lim-

ited judgment. The trial court therefore entered a general

judgment in favor of Linn, Douglas, and Yamhill counties,

excusing them from compliance with the paid sick leave law

pursuant to Article XI, section 15(3).

Defendants appealed. They argued that the trial

court erred in granting plaintiffs’ motion for summary

judgment because the text, context, and legislative history

of Article XI, section 15, demonstrate that a statutory policy

requiring all employers—whether private or public—with

a certain number of employees to provide certain employee

benefits is not a “program” for purposes of that constitutional

provision, and, therefore, that subsection 15(3)(a) does not

exempt plaintiffs from complying with the paid sick leave

law. In response, plaintiffs argued that the term “program”

as used in Article XI, section 15, is not limited to traditional

government programs, as the state’s argument suggested,

and that the language of Article XI, section 15, as well its

context and legislative history, support a broad, rather than

a narrow, reading of the term.

The Court of Appeals reversed, concluding that

“Article XI, section 15, addresses state enactments that

require unfunded government programs to actively perform,

provide, or deliver services to others.” Linn County v. Brown,

297 Or App 330, 342, 443 P3d 700 (2019) (emphasis in origi-

nal). The court looked to existing statutory and constitutional

frameworks, the voters’ pamphlet statements describing the

relevant ballot measures, and the history of the legislative

referral. Examining the use of the term “program” in other

statutes and constitutional provisions, the court concluded

340 Linn County v. Brown

that Article XI, section 15, “concerns what is traditionally

understood as government programs, i.e., the provision of

public services to others.” Id. at 344. The court also noted

that much of the discussion surrounding the ballot mea-

sures involved the phrase “unfunded mandates,” but that

there was significant “conceptual confusion about the mean-

ing of ‘unfunded mandates’ ” throughout the history of the

measure, its passage, and subsequent interpretations. Id. at

347. The court ultimately held that “Article XI, section 15,

concerns state enactments that require unfunded govern-

ment programs to perform, provide, or deliver services to

individuals, agencies, or the public at large. The paid sick

leave law * * * is not a ‘program’ for government services to

others within the meaning of the unfunded programs mea-

sure.” Id. at 354.4 Plaintiffs filed a petition for review, which

we granted.

THE TEXT IN CONTEXT OF ARTICLE XI, SECTION 15

This court “interpret[s] referred constitutional amend-

ments within the same basic framework as we interpret stat-

utes: by looking to the text, context, and legislative history of

the amendment to determine the intent of the voters.” State

v. Sagdal, 356 Or 639, 642, 343 P3d 226 (2015). See also

Ecumenical Ministries v. Oregon State Lottery Comm., 318

Or 551, 560, 871 P2d 106 (1994) (same); State v. Reinke, 354

Or 98, 106, 309 P3d 1059, adh’d to as modified on recons, 354

Or 570, 316 P3d 286 (2013) (same). That history includes,

among other things, “preexisting constitutional provisions,

case law, and statutory framework,” Sagdal, 356 Or at 642,

legislative hearings and deliberations, State v. Lane, 357

Or 619, 634, 355 P3d 914 (2015), and “the ballot title and

associated information in the voters’ pamphlet.” Id. at 631-

32. The focus of the inquiry is to determine “the meaning

4

The Court of Appeals also concluded that Article XI, section 15, “is not

addressed to all ordinary laws of general application, such as ones involving

employee relations in businesses at large,” Linn County, 297 Or App at 342, and

seemed to suggest that the provision may apply only to laws directed exclusively

at local governments. Plaintiffs argue that the text of the measure is not so lim-

ited. We need not and do not decide that question here because, regardless of

whom else the paid sick leave law applies to, we conclude, for reasons explained

in this opinion, that it is not a “program” that requires “specified services to

persons, government agencies or to the public” for purposes of Article XI, section

15(1).

Cite as 366 Or 334 (2020) 341

understood by the voters who adopted” the measure. Id. at

625. The degree to which the enactment history of a con-

stitutional provision is useful to this analysis, however,

“depend[s] on the circumstances—including the clarity with

which the legislature’s or the people’s intentions have been

expressed in the text of an enactment and the nature of the

history itself.” Id. at 634. With that framework in mind, we

turn to the text, context, and legislative history of Article

XI, section 15.

As described above, the provision at issue exempts

local governments from implementing state “programs” that

will require the local government to expend funds over a

certain cost threshold. Defendants argue that the Court of

Appeals correctly concluded that the paid sick leave law is

not a “program” within the meaning of Article XI, section 15,

because the word “program” was intended to mean the pro-

vision of “traditional government services” such as police,

fire departments, and schools, among others. Plaintiffs take

issue with that conclusion, asserting that defendants and

the Court of Appeals have an unduly narrow view of what

constitutes a “program.” They note that the text of the provi-

sion does not refer to “traditional” government services, and

that the term “program” is specifically defined to include

“administrative, financial, social, health or other specified

services to persons,” Or Const, Art XI, § 15(2)(c) (emphasis

added), suggesting an expansive scope that easily includes

implementation of the paid sick leave law.

We begin with the text of Article XI, section 15,

because “[t]he best evidence of the voters’ intent is the text

of the provision itself.” Ecumenical Ministries, 318 Or at 559

(internal quotation marks omitted). As noted, subsection (2)

of that constitutional provision defines a “program” as

“a program or project imposed by enactment of the

Legislative Assembly or by rule or order of a state agency

under which a local government must provide administra-

tive, financial, social, health or other specified services to

persons, government agencies or to the public generally.”

Or Const, Art XI, § 15(2)(c). Plaintiffs are correct that,

although the definition of “program” specifically contem-

plates the provision of services by local governments, the

342 Linn County v. Brown

definition is not on its face limited to “government” pro-

grams, let alone “traditional” government services, as the

Court of Appeals suggested. Of course, in constitutional as

well as statutory interpretation, “courts are not to insert

what has been omitted, or to omit what has been inserted.”

AAA Oregon/Idaho Auto Source v. Dept. of Rev., 363 Or 411,

418, 423 P3d 71 (2018) (internal quotation marks omitted).

Moreover, plaintiff continues, “program” is defined to mean,

in part, a state requirement that local governments provide

“specified services” to “persons.” From that text, plaintiffs

argue that the paid sick leave law is a “program” because

it requires local governments to provide “specified services”

(here, sick leave benefits) “to persons” (here, local govern-

ment employees).

But other aspects of the text support defendants’

proposed interpretation. The definition that the text pro-

vides of “program” expressly refers to something “imposed”

by the state “under which a local government must provide

* * * services to persons, government agencies or to the pub-

lic generally.” Or Const, Art XI, § 15(2)(c) (emphasis added).

That wording at least indicates that the types of “programs”

or the provision of “services” that Article XI, section 15, was

intended to cover are those that local governments can or do

provide, whether or not they also may be provided by others.

Moreover, although the definition in Article XI, sec-

tion 15(2)(c), is in part tautological—“ ‘Program’ means a pro-

gram * * *”—the remainder of the definition does narrow the

somewhat abstract and general dictionary definition of “pro-

gram” as “a plan of procedure : a schedule or system under

which action may be taken toward a desired goal.” Webster’s

Third New Int’l Dictionary 1812 (unabridged ed 1993). In

particular, the additional words in the constitutional defini-

tion limit the scope of “program” to “specified services” that

“a local government must provide * * * to persons, govern-

ment agencies or to the public generally.” Or Const, Art XI,

§ 15(2)(c) (emphasis added). But an employer’s offer of paid

sick leave to employees does not fit easily into the concept of

“services” that are “provided” to “persons.” The ordinary defi-

nition of “service” is “the performance of work commanded or

paid for by another,” an “action or use that furthers some

end or purpose : conduct or performance that assists or

Cite as 366 Or 334 (2020) 343

benefits something : deeds useful or instrumental toward

some object.” Webster’s at 2075 (emphasis added). “Services”

to “persons” thus appears to mean work or actions or con-

duct of some kind that “assists” or “benefits” the persons

receiving the services and thus accomplishes some particu-

lar “end or purpose.” As defendants correctly point out, the

usual understanding of “services” in the employment context

would be that employees “provide” “services” to employers,

and, in exchange, employers provide compensation (includ-

ing benefits) to employees. And while it is true that a local

government’s employees are “persons,” the use of that word

in the definition suggests that it is intended to apply to

individuals or constituents who receive local government

“services” in their capacity as beneficiaries, rather than to

employees of the local government who receive employment

benefits in their capacity as employees.

Certainly, as plaintiffs assert, the paid sick leave

law establishes an “end” or “object” that the legislature

wanted to achieve, and eligible employees are persons who

benefit from that law. But that does not mean that the paid

sick leave law requires local governments to “provide spec-

ified services to persons” within the meaning of Article XI,

section 15.

We recognize, of course, that the legislature “may

and often does choose broader language that applies to a

wider range of circumstances than the precise problem that

triggered legislative attention,” and we generally “take the

legislature at its word.” Comcast Corp. v. Dept. of Rev., 356

Or 282, 307, 337 P3d 768 (2014) (internal quotation marks

omitted). And, as noted, plaintiffs make several valid points

about the Court of Appeals’ textual analysis. Nevertheless,

for the reasons just discussed, defendants have a somewhat

stronger textual argument that “program,” as that term is

used in Article XI, section 15, does not include the paid sick

leave law.5

5

Plaintiffs also argue that the “enterprise exception” in Article XI, section

15(8), supports their view that the paid sick leave law is a “program” for purposes

of the constitutional provision. That subsection, as noted, exempts nongovern-

mental entities from compliance with a state-required program if they “compete”

with a local government in the sale of products or services and the local gov-

ernment is not required to comply because the state has not provided funding.

344 Linn County v. Brown

THE CONTEXT OF EXISTING LAWS

To further evaluate the parties’ competing positions

we, like the Court of Appeals, turn to “preexisting consti-

tutional provisions and the statutory framework existing”

when Article XI, section 15, was adopted. Linn County,

297 Or App at 342. The Court of Appeals considered the

term “program” as it is used in statutes such as the Local

Budget Law, ORS 294.305 to 294.565, and in several sub-

sections of Article XV, section 4, which require or authorize

the legislature to use State Lottery proceeds to fund certain

“programs.” Linn County, 297 Or App at 342-44. The court

viewed that context as supporting defendants’ contention

that a “program” means a “government program,” which is

“the provision of public services to others,” id. at 344, and

therefore not so expansive as to apply to the paid sick leave

law.

Plaintiffs again challenge that holding, asserting

that the use, in other contexts, of the word “program” to

refer to expenditures by governments does little to assist

in understanding what the word means in Article XI, sec-

tion 15. Indeed, they argue that the preexisting framework

supports their view that, even if “program” is limited to

programs that government is required to implement, then

the paid sick leave law—to the extent that it requires local

governments to offer that benefit to their employees—is just

such a program. They also note that the paid sick leave law

itself uses the word “program” in referring to the obligations

of employers “with a sick leave policy, paid vacation policy,

paid personal time off policy or other paid time off program

* * *.” ORS 653.611(1). That demonstrates, they argue, that

the legislature considered the paid sick leave law a “pro-

gram” for purposes of Article XI, section 15.

For their part, defendants also reiterate the “text

in context” arguments that we have considered above. They

Plaintiffs’ point is that the inclusion of the enterprise exception would serve no

purpose unless Article XI, section 15, applied to laws of general applicability—

such as the paid sick leave law—and not only to laws directed exclusively at local

governments. As discussed, 366 Or at 340 n 4, however, our decision here is based

on our interpretation of “program” for purposes of Article XI, section 15, and does

not turn on the entities to whom a program does or does not apply. Plaintiffs’

argument regarding the enterprise exception is inapposite.

Cite as 366 Or 334 (2020) 345

agree with plaintiffs that the word “program,” in the abstract,

could have a broader meaning, but insist that other provi-

sions in Article XI, section 15, as well as the way that “pro-

gram” is used in other constitutional and statutory contexts

discussed by the Court of Appeals, support a more special-

ized meaning. They argue that the legislature in making its

referral, and the voters in enacting the measure, understood

the “programs” and “services” to which the measure applied

to be government service programs that local governments,

in their capacity as governments, were required by the leg-

islature to provide.

Not to put too fine a point on it, existing constitu-

tional and statutory provisions that use the word “program”

for such diverse purposes as the use of lottery funds for

watershed education activities, Article XV, section 4b(3)(d),

or required reports by state agencies to the legislature about

substantive changes in their activities, ORS 291.373(1) - (2),

provide little guidance in construing the word in Article XI,

section 15. Indeed, some of the cited provisions contain their

own definitions of “program,” and thus are of no assistance

whatsoever. The parties’ arguments regarding context, how-

ever, do demonstrate that the term “program” may have dif-

ferent meanings throughout Oregon law, depending on con-

text, and those arguments provide some marginal support

for defendants’ position, in that the term is most often used

when the program is one where a government entity is pro-

viding services or money or is engaged in activities for the

benefit of the public. The stronger basis for that interpreta-

tion, however, comes from the text of Article XI, section 15,

itself, as discussed above, which has its own definition of

“program.” But neither the text nor the context persuasively

eliminates the possibility that the provision was intended

to cover the wider range of obligations imposed on local gov-

ernments, as plaintiffs contend.

REFERRAL AND ENACTMENT HISTORY

We turn to the legislative history of Article XI, sec-

tion 15, including the background against which the legisla-

ture in 1995 passed HJR 2 and referred it to the people. The

Court of Appeals correctly noted that the measure arose

in the context of a national and state debate in the 1990s

346 Linn County v. Brown

about “unfunded mandates.” Linn County, 297 Or App at

352-54. However, not only does that phrase not appear in

Article XI, section 15, but neither word standing alone is

anywhere in the text of the measure. Moreover, as the Court

of Appeals observed, from the Oregon measure’s origins in

the legislature to the way its purpose and reach was com-

municated to voters, there persisted “conceptual confu-

sion” about “unfunded mandates.” Id. at 352. The Court of

Appeals ultimately relied on history from the legislature as

well as information provided to voters to conclude that “the

enactment history of Article XI, section 15, [does not] indi-

cate[ ] that the measure is a limitation on anything other

than state enactments that impose on local governments

unfunded government programs to perform, provide, or

deliver services to others.” Id. at 351.

As described above, our focus when we construe a

legislatively referred constitutional amendment is to deter-

mine “the meaning understood by the voters who adopted”

the measure in question. Lane, 357 Or at 625. To make that

determination, we examine, inter alia, the ballot title, argu-

ments for and against the measure included in the voters’

pamphlet, and news reports and editorial comments from

the time the measure was being considered. Ecumenical

Ministries, 318 Or at 560 n 8; see also Shilo Inn v. Multnomah

County, 333 Or 101, 130, 36 P3d 954 (2001), adh’d to as mod-

ified on recons, 334 Or 11, 45 P3d 107 (2002) (describing the

relevant history as including “materials that are included

in the Voters’ Pamphlet, such as the ballot title, the explan-

atory statement, and the legislative argument in support”).

But we also have recognized that

“the voters have the opportunity to give their approval only

after the legislature drafts a measure and, after delibera-

tion, deems it worthy of submission to them. * * * Certainly,

[those deliberations] are at least as germane to the intended

meaning of a measure as a newspaper editorial that we

have no way of knowing anyone actually read.”

Lane, 357 Or at 634.

As the Court of Appeals and the parties all dis-

cuss, the actions by the legislature and the voters that led

to the enactment of Article XI, section 15, took place in the

Cite as 366 Or 334 (2020) 347

context of a national discussion over “unfunded mandates,”

so we begin with a brief review of that issue. At the federal

level, “ ‘[u]nfunded mandates’ were a major issue in the 1994

congressional elections.” Daniel H. Cole & Carol S. Comer,

Rhetoric, Reality, and the Law of Unfunded Mandates,

8 Stan L & Pol’y Rev 103, 103 (1997). The federal Unfunded

Mandates Reform Act, Pub L 104-4, 109 Stat 48 (1995),

declared its purposes to include:

“to end the imposition, in the absence of full consideration

by Congress, of Federal mandates on State, local, and

tribal governments without adequate Federal funding, in a

manner that may displace other essential State, local, and

tribal governmental priorities.”

2 USC § 1501(2). The statute defined “Federal mandate” as

“any provision in statute or regulation or any Federal court

ruling that imposes an enforceable duty” on one of the iden-

tified governments, including as a condition of federal assis-

tance or arising from participation in a voluntary federal

program. 2 USC § 1555.

The central concern regarding “unfunded man-

dates” was that the federal government was requiring state,

local, and tribal governments to take certain actions with-

out providing the funding needed to do so. Despite the exten-

sive debate, however, there is not now and never has been a

consensus on what precisely the term “unfunded mandates”

means. Julie A. Roin, Reconceptualizing Unfunded Mandates

and Other Regulations, 93 Nw U L Rev 351, 352 n 5 (1999)

(noting that “[t]here are almost as many definitions as there

are articles written on the subject of unfunded mandates”).

The phrase “first appeared in the late 1970s, when the rate

of increase in federal intergovernmental mandates began to

outpace the rate of increase in federal grants to state and

local governments,” and became “a shorthand phrase that

sums up the tensions and grievances of the federal system

characterized by deficits at the national level, and by bud-

get shortfalls, increased taxes, and service cutbacks at the

State and local levels.” Cole & Comer, 8 Stan L & Pol’y Rev

at 105.6

6

Ultimately, the Unfunded Mandate Reform Act of 1995 had limited substan-

tive impact and served primarily “to deter the passage of unfunded mandates,”

348 Linn County v. Brown

As states became concerned about federal require-

ments that they undertake new programs without addi-

tional federal funding, so too local governments objected to

programs that state legislatures imposed on them but failed

to fund. See Official Voters’ Pamphlet, General Election,

Nov 5, 1996 (1996 Voters’ Pamphlet), 26 (Argument in Favor,

Measure 30) (noting that 15 states had passed constitu-

tional amendments limiting unfunded mandates). Against

that backdrop, the 68th Oregon Legislative Assembly con-

sidered two different versions of the resolution that was

ultimately referred to the voters as Ballot Measure 30,

with the intention of addressing some category of state gov-

ernment requirements on local governments that could be

called unfunded “programs.” By comparing the wording of

these two resolutions—HJR 2, the version finally passed,

and HJR 17 (1995)—we can see that the legislature con-

templated but ultimately rejected a much wider-reaching

version of the proposed amendment and submitted the less

expansive proposal to the voters.

As previously explained, HJR 2, the version passed

by the legislature and then by the voters, defined “program”

in part as “a program or project imposed by enactment of the

Legislative Assembly or by rule or order of a state agency

* * *.” HJR 2, para 1, § 15(2)(c). HJR 17, however, would have

included a significantly broader definition of the programs

to which the constitutional limitation would apply: “any pro-

gram, procedure, project or responsibility imposed by enact-

ment of the Legislative Assembly or by rule or order of a state

agency * * *.” HJR 17, para 1, § 15(2)(b) (emphases added).

Similarly, while HJR 2 required the legislature to appropri-

ate funds needed “to establish a new program or provide an

increased level of service for an existing program,” HJR 2,

Roin, 93 Nw U L Rev at 353 n 7 (emphasis added), by permitting legislators to

raise a point of order against unfunded mandate legislation, 2 USC § 658(d), and

requiring the Congressional Budget Office to prepare cost estimates on certain

regulatory activities. 2 USC §§ 658b - 658f. The federal law did not explicitly pro-

hibit the passage of legislation that would impose unfunded mandates on states,

but instead sought primarily to “reduce the number of unfunded federal man-

dates and enhance congressional oversight of agency decisionmaking,” the result

of which “could be better, though not necessarily fewer, federal mandates to state

and local governments.” Cole & Comer, 8 Stan L & Pol’y Rev at 104 (emphasis in

original).

Cite as 366 Or 334 (2020) 349

para 1, § 15(1), HJR 17 would also have required state fund-

ing for “any other state-assigned responsibilities requir-

ing the expenditure of local revenues.” HJR 17, para 1,

§ 15(1) (emphases added).

The most significant of these differences was the

scope of the state requirement that would trigger an exemp-

tion and permit a local government to refuse to comply with

the requirement, if the state failed to provide funding. HJR

2 exempted local governments from compliance if the state

law “requires the expenditure of money by the local govern-

ment for a new program or increased level of service for an

existing program.” HJR 2, para 1, § 15(3) (emphasis added).

HJR 17 would have gone much further, reaching “any state

law * * * that requires the expenditure of moneys by the local

government.” HJR 17, para 1, § 15(3) (emphases added).

Thus, while HJR 17 would have applied to any law that

requires any expenditure of local funds, HJR 2 as finally

passed reached a narrower range of state laws—only those

that require the implementation of a “new program” or an

“increased level of service for an existing program.” HJR 2,

para 1, § 15(1).

The difference between the relative sweep of HJR 2

and HJR 17 is significant in the plain meaning of the words

that the legislature chose. Webster’s defines “responsibility”

as “the quality or state of being responsible : such as : moral,

legal, or mental accountability.” Webster’s at 1935. The term

“program,” on the other hand, means “a plan of procedure : a

schedule or system under which action may be taken toward

a desired goal : a proposed project or scheme,” id. at 1812,

and “project” is defined as “a specific plan or design : such as

a devised or proposed plan : a scheme for which there seems

hope of success.” Id. at 1813. Where the term “responsibili-

ties,” then, refers to any obligation, the terms “program” and

“project” mean something more specific.

Although the difference between the scope of the

state laws covered by HJR 2 and HJR 17 does not tell us

exactly how to interpret “program” in Article XI, section 15,

there can be little doubt that HJR 17 would more readily

have covered the paid sick leave law: that statute imposes a

“responsibility” on local governments, and it is a state law

350 Linn County v. Brown

that “requires the expenditure of moneys.” The legislature

rejected HJR 17. We presume that the legislature intention-

ally chose HJR 2, the option with narrower wording that

would cover fewer and more specific state requirements.

And, likewise, it stands to reason that the voters under-

stood Measure 30 to have the more limited scope that its

text plainly describes. That policy choice tends to undercut

plaintiffs’ argument for a sweeping interpretation closer to

the breadth of HJR 17.

Finally, we turn to the materials presented to

the voters when they considered Measure 30 in 1996 and

Measure 84 in 2000. The legislative argument in support

of Measure 30 made the point that, under existing law, the

state could “compel a local government to provide financial,

social, health and other services to the public,” but did not

have to provide any money “to pay the cost of those services.”

1996 Voters’ Pamphlet at 24 (emphasis added).7 Speaker of

the House Bev Clarno’s separate argument in favor said

that under Measure 30, “if the state says to counties and

cities that they have to provide a service, the state has to foot

the bill. If the state is not paying the price, the county or

city can decline to provide the service.” Id. at 25 (emphases

added). Local government officials from Jackson County sup-

ported Measure 30 because it would apply, they asserted, to

new state-required programs related to elections, land use

planning, property assessment and taxation, and providing

rights-of-way to utilities. Id. at 27. Governor John Kitzhaber

submitted an argument in opposition, pointing out that the

measure would create confusion “about who pays for what

services,” using as examples public kindergartens, sewers,

and land use planning. Id. at 28.8

7

When the legislature refers a measure to the voters, the voters’ pamphlet

includes an “explanatory statement,” which is “an impartial, simple and under-

standable statement explaining the measure,” prepared by a legislative com-

mittee, ORS 251.215(1), a legislative argument in support of the measure, pre-

pared by a different legislative committee, ORS 251.245, and arguments for and

against the measure, submitted by interested persons, ORS 251.255.

8

We express no opinion as to whether any specific programs in the general

areas of government policy identified in the Voters’ Pamphlet arguments would

or would not be subject to Article XI, section 15. We refer to those general areas

only to describe the information provided to voters in connection with Measure 30

and Measure 84.

Cite as 366 Or 334 (2020) 351

Similar arguments appeared in the Voters’ Pamphlet

in 2000, when the voters were presented with Measure 84,

which removed the sunset provision and thereby made

Article XI, section 15, a permanent part of the constitution.

An argument in favor described the kinds of new programs

that the legislature would have to fund if it wanted local

governments to provide them: “public safety districts such

as fire and 9-1-1 communications, as well as other districts

such as water, sewer, parks & recreation, and library.”

Official Voters’ Pamphlet, General Election, Nov 7, 2000,

(2000 Voters’ Pamphlet), 10. Another argument in favor

stated that the measure would provide greater choice “in

deciding to fund local services such as fighting crime, main-

taining parks, and helping children at risk.” Id. at 11.

Significantly, not a single one of the 20 explanatory

statements and arguments for and against that were submit-

ted regarding the 1996 and 2000 measures gives any hint

that either supporters or opponents believed, understood,

or intended that the measures applied to public employee

compensation and benefits or to the internal administrative

policies of local government. Virtually every example of the

kind of law that the measures were intended to cover was

of a state law imposing requirements on local government

qua government to provide particular services to the public,

such as elections, taxation, and utility services.9

Plaintiffs point to the many references in the Voters’

Pamphlet arguments to “unfunded mandates,” “local con-

trol,” and the general concept that “if the state says to coun-

ties and cities that they have to provide a service, the state

9

Petitioners emphasize that various city officials, when asked by the

League of Oregon Cities to identify the top “unfunded mandates” impacting

their city, mentioned policies similar in character to the paid sick leave law,

such as Occupational Health and Safety Administration rules, the Americans

with Disabilities Act, and Workers’ Compensation. However, we have cautioned

against relying too heavily on statements of interested parties for the precise

meaning of a proposed measure, “because of the partisan character of such mate-

rial.” Sagdal, 356 Or at 643. And, as defendants point out, the fact that cities

came up with an expansive list of state requirements that they considered finan-

cially burdensome is not surprising, but does not necessarily bear on what the

term “program” in Article XI, section 15, actually encompasses. Moreover, the

League of Oregon Cities requested this information from city officials prior to

the passage of HJR 2, and referred only to “unfunded mandates” generally, using

neither a specific definition of that term nor wording from HJR 2 or HJR 17.

352 Linn County v. Brown

has to foot the bill.” 1996 Voters’ Pamphlet at 25 (Argument

in Favor submitted by Speaker Bev Clarno). But those

references—given that the only examples of affected pro-

grams mentioned in the Voters’ Pamphlets are those in

which governments provide specific services to the public,

as just discussed—actually support defendants’ view that

the general concepts of “unfunded mandates” and “local con-

trol,” even if lacking clarity, are focused on required ser-

vices to the public that one level of government imposes on

another.

Plaintiffs also argue that, because the explanatory

statements in the Voters’ Pamphlets for both Measures 30

and 84 list certain programs to which the measures

expressly do not apply—and that list does not include paid

sick leave or other aspects of employment—voters would

have understood that the measure did apply to state laws

concerning those subjects. See 1996 Voters’ Pamphlet at

24; 2000 Voters’ Pamphlet at 8. However, the explanatory

statements simply summarized the specific exceptions con-

tained in the text of Article XI, subsection 15(7). They thus

provide little assistance in understanding how the voters

would have understood the scope of the key terms “program”

and “services” used in the text of subsection 15(1). That is

particularly true given the many examples of “programs”

in the Voters’ Pamphlet arguments submitted by sup-

porters and opponents and discussed above, almost all of

which involve local governments—acting in their capacity

as governments—providing services to their constituents.

SUMMARY AND APPLICATION

We can summarize the discussion above as follows:

Article XI, section 15(1), provides that, when the state

“requires any local government to establish a new program,”

the state must provide the local government sufficient funds

to cover the costs “of performing the mandated service or

activity.” The measure defines “program” as a “program or

project * * * under which a local government must provide

administrative, financial, social, health or other specified

services to persons, government agencies or to the public.”

Id. § 15(2)(c). Although the word “program” in the abstract

might be expansive enough to cover a state requirement

Cite as 366 Or 334 (2020) 353

that all employers, including local governments of a certain

size, provide paid sick leave to their employees, the text sug-

gests a narrower focus—on specific “services” that a “local

government” is to “perform” for “persons, government agen-

cies or * * * the public generally.” Id. The text of the measure

thus indicates that “program,” as used in Article XI, sec-

tion 15, likely does not include a state requirement that all

employers of a certain size, as employers, provide employees

with a particular employee benefit.

The referral and enactment history of the provision

more clearly supports a narrower, rather than a broader,

interpretation of the “programs” that are subject to the

provision. The legislature considered two substantially

different proposals to refer to the voters. It rejected HJR

17, which would have applied to “any program, procedure,

project or responsibility” imposed by the state, and would

have exempted local governments from “any other state-

assigned responsibilities” that would require local spending.

HJR 17, para 1, § 15(2)(b). The legislature instead referred

the narrower measure, applying to “programs,” consisting of

“specified services,” that local governments were required to

“provide.” HJR 2, para 1, § 15(2)(c). Similarly, when Measure

30 and Measure 84 were put before the voters, the legis-

lative explanatory statements and the arguments for and

against the measures focused on specific government services

that the state required from local governments. To be sure,

the broad concepts of “unfunded mandates” and “local con-

trol” were mentioned multiple times, but the only examples

offered of “programs” that might be affected by the mea-

sures were services such as elections, land-use planning,

parks, and libraries. To the extent we can discern what the

voters understood the measures to mean when they voted in

favor of them, we conclude that they intended to adopt a less

sweeping view than that urged by plaintiffs.

We return to the specific question that this case

presents: whether Article XI, section 15, applies to the paid

sick leave law. Plaintiffs argue that the paid sick leave law

is just the kind of broad policy enactment by the legisla-

ture to which Article XI, section 15, was intended to apply.

According to plaintiffs, because “the legislature saw the

354 Linn County v. Brown

[paid sick leave] law as a means to address the impacts of

broad socio-economic inequities in Oregon, and to protect

employees, individuals, businesses, and the public generally

from the impacts of avoidable illnesses,” the law is, neces-

sarily, a “program.” As such, they contend that, because the

state failed to provide funding for them to cover the newly

imposed costs, they are exempt from the paid sick leave law.

We disagree. As discussed above, “program” for pur-

poses of Article XI, section 15, focuses on “specified services”

that local government is to provide “to persons, government

agencies or to the public generally.” Id. § 15(2)(c). Paid sick

leave is a statutory policy choice regarding an employee ben-

efit that the legislature determined to be appropriate and

that it now requires of all employers—public and private,

profit and nonprofit—of a certain size. Such a legislative pol-

icy may well be directed at perceived socio-economic inequi-

ties, as the paid sick leave law is, but that does not make it

a “program.” Contrary to plaintiffs’ claims, whether a policy

is a “program” is not determined by the intention behind

the policy, but rather by the type of local government action

that the policy requires. A policy that regulates one aspect

of the employment relationship by requiring employers to

offer a particular employee benefit obviously means that the

employer must take specific administrative steps to imple-

ment the policy. However, a local government is required to

take those internal actions simply because it is an employer

of a certain size. Those required administrative actions do

not mean that the paid sick leave law is a new “program” of

“services to persons, government agencies or to the public

generally.”

For the reasons explained above, we conclude that

the paid sick leave law is not a “program” for purposes of

Article XI, section 15. That constitutional provision, there-

fore, does not exempt plaintiffs from compliance with the

statute.

The decision of the Court of Appeals is affirmed.

The judgment of the circuit court is reversed, and the case

is remanded to the circuit court for further proceedings.