Oregon House Bill HB4143

Oregon 2026 Regular Session

• Introduced: 2/2/26
• Refer: 2/2/26
• Report Pass: 2/16/26
• Engrossed: 2/19/26
• Refer: 2/19/26
• Failed: 3/6/26

Caption

Authorizes the Governor to direct state agencies to withhold moneys owed to the federal government if federal funds are being withheld from the state in contravention of a valid court order.

Summary

HB 4143 authorizes the Governor, with the consent of the Attorney General and State Treasurer, to direct Oregon executive agencies to withhold certain payments owed to the federal government when the federal government is withholding money from the state in violation of a valid court order. The bill defines the kinds of payments that may be withheld as “qualified payments,” while excluding payroll taxes and certain unemployment and paid family and medical leave-related amounts. If the state withholds payments under the bill, those funds must be deposited into a newly created Federal Moneys Holding Account in the State Treasury. The measure also creates a mechanism for balancing the account against the amount of federal money that is unlawfully withheld. If the Governor determines the account holds more than the amount owed to the state, the Governor must direct agencies to resume paying the federal government to the extent of the excess and direct the Department of Administrative Services to move money from the account so those payments can be made. The bill includes a defense and indemnification provision for state officers, employees, and agents acting in compliance with the act, and it sunsets on January 2, 2037.

Impact

HB 4143 would add a new statutory framework governing how Oregon state agencies respond when federal funds are allegedly being withheld unlawfully despite a court order. It creates the Federal Moneys Holding Account in the State Treasury, makes those moneys continuously appropriated to the Department of Administrative Services, and authorizes the Governor to manage transfers into and out of that account. The bill would affect executive agencies that owe payments to the federal government under contract or federal law, while expressly carving out payroll taxes and certain unemployment insurance and paid family and medical leave-related amounts from the withholding authority.

Sentiment

The bill appears to have received generally favorable support in the Legislature, advancing out of the House committee on a 4-3 vote, passing House third reading 33-18, and then receiving a 4-2 do-pass recommendation in the Senate committee. Those vote margins suggest meaningful support but not broad unanimity. The available record does not include committee testimony, so the discussion-based sentiment cannot be assessed directly, but the voting history indicates the measure was politically supported by a majority while still drawing notable opposition.

Contention

The main point of contention is the bill’s use of state withholding power as leverage against the federal government, which raises legal and policy questions about intergovernmental payment obligations and the scope of executive authority. Opponents likely focused on the risk of escalating conflict with federal agencies, potential fiscal uncertainty, and the possibility of state liability, while supporters likely viewed the bill as a way to enforce court-ordered federal obligations owed to Oregon. The indemnification provision and the Governor’s discretion, exercised with the Attorney General and State Treasurer, may also have been debated as safeguards versus overreach.