Our wonderful Legislative Committee members wrote about Senate Bill (SB) 789 last year when our Oregon legislators were considering the bill. Now that the bill has passed and become effective, I thought it might be helpful to provide more information to psychologists around the state about the implications of the bill.

As a reminder, Senate Bill 789 authorizes the Oregon Board of Psychology (OBOP) to recover from a psychologist who was disciplined by the Board some costs associated with the disciplinary action. This bill was passed during the 2025 legislative session and became part of ORS 675.110 (“Powers of the Board”). The operative date of the bill was January 1, 2026, meaning that costs could be assessed against disciplined psychologists beginning on that date. Costs can also be assessed against individuals practicing psychology without a license. 

SB 789 aligns OBOP’s practices with other state licensing boards which are allowed to recoup costs when the board prevails on appeal, including the Medical Board; the Board of Dentistry; the Health Licensing Office, which includes the Sexual Offense Treatment Board, the Behavioral Analysis Regulatory Board, and the Art and Music Therapists Board; the Board of Licensed Professional Counselors & Therapists; the Board of Licensed Social Workers; the Board of Chiropractic Examiners; the Board of Massage Therapists; the Board of Optometry; and the Board of Accountancy.  Other state agencies also requested similar cost recovery authority during the 2025 legislative session. SB 872 regarding similar processes for the Mortuary and Cemetery Board passed and became effective as of January 1, 2026. SB 804 regarding the Teacher Standards and Practices Commission was still in committee when the legislative session ended; it is likely that this bill will be addressed in future legislative sessions. 

Various iterations of SB 789 circulated for several years but did not pass until 2025. Specifically, in 2017, OBOP proposed House Bill (HB) 2329, which died in the House Health Care Committee that year. One of the reasons that bill died was that it allowed all the costs expended by the Board to be recouped from a disciplined psychologist. Many psychologists around the state were not happy with this potential cost assessment, believing that it might deter psychologists with legitimate grounds from seeking an appeal. Following the failure of HB 2389, OBOP worked closely with the Oregon Psychological Association (OPA) membership to modify language to include a tiered cost assessment structure. HB 2114 was proposed in 2021, but this also was unsuccessful. The idea was presented again in 2025, again in close consultation with OPA. In fact, OPA sent in supporting testimony to the Oregon legislature, stating in part: “Under rare circumstances, long and drawn-out investigations which sometimes involve unlicensed non-psychologist providers, can lead to high costs for the [Mental Health Regulatory Agency]. Under current law, there is no ability to recover these costs. This has led to higher licensure fees incurred by licensed psychologists. OPA hopes that the ability for the MHRA to recover investigatory costs under certain circumstances will lead to a decrease in licensure fees for licensed psychologists.” Thanks in large part to OPA’s testimony, this time the bill passed. 

The bill only comes into play when a psychologist loses an appeal. If the psychologist prevails on appeal, OBOP, not the appealing psychologist, is responsible for all costs. If the psychologist does not prevail on appeal, OBOP will be able to recoup varying amount of their costs based on the tiered structure of the bill. If OBOP spends up to $3000 defending the case, the psychologist, even if they do not prevail, will not be responsible for any of those costs. If OBOP spends between $3000-$6000, the psychologist who does not prevail will be responsible for up to 50% of those costs. If OBOP spends more than $6000 defending the case, the psychologist who does not prevail will be responsible for up to 100% of those costs. 

It's important that psychologists understand that OBOP receives no funding from the state of Oregon. Instead, 100% of OBOP’s expenses are paid from licensing fees charged to psychologists. When the Board has to defend their actions in a contested case, the Board’s expenses go up, meaning that psychologists across the state pay more in licensing fees. Over the past 5 years, the costs of defending their actions in contested cases have risen substantially. Specifically, the Board has to pay an attorney to defend their findings, and an Administrative Law Judge to hear the case. The state Department of Justice charges the Board for the assistant attorney general who works with the Board. The hourly rate for this attorney’s time went from $242/hour in 2021 to $322/hour in 2025 (a 17.1% increase). The hourly rate for an Administrative Law Judge also went up over this same time frame, from $204/hour in 2021 to $283/hour in 2025 (a 16% increase). Because OBOP is 100% funded by licensing fees, these increasing costs are paid for by every licensed psychologist across the state in the form of higher fees. The Board conservatively projects the revenue impact from recouping some of these costs to be $16,911 in 2025-27 and $22,548 for 2027-29.

Psychologists must remember that they are allowed to appeal OBOP’s findings and that the Board cannot recoup any costs from them if the Board loses the appeal. However, if the Board prevails, the appealing psychologist may be responsible for varying amounts of costs incurred by the Board. Paul Cooney sent a very helpful email through OPA’s listserv on January 20, 2026 which advised psychologists to have proactive discussions with their attorney about the likely costs of appealing the Board’s findings and how much they may have to pay to the Board if they do not prevail. It’s vitally important that psychologists who are considering appealing the Board’s findings know what SB 789 is and work closely with their attorney on the likely implications of the new cost recovery structure on any final judgement of their case.