HB 3962
Allows city and county services for which net local transient lodging tax revenue may be used to be provided either directly by the city or county or indirectly by a special district.
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Sign in to take actionPublic sentiment
Support
25%
Oppose
75%
- Introduced
- Passed House
- Passed Senate
- To Governor
- Became Law
Bill overview
This bill changes how local transient lodging taxes (hotel taxes) can be used. Currently, at least 70% of these taxes must go towards tourism, but the bill would allow up to 60% to be used for city and county services. Local governments can choose to provide these services directly or through special districts. The Legislative Revenue Officer is required to study local taxation and submit findings to the Legislative Assembly by December 1, 2026.
Key provisions
- The Legislative Revenue Officer must study local taxation and report findings by December 1, 2026.
- Allows up to 60% of transient lodging tax revenue to be used for city and county services.
- Provides an option for local governments to use special districts to deliver services funded by the tax.
- Allows local governments with existing tax regimes to utilize the new provisions.
- Section 1 of the Act is repealed on January 2, 2027.
Who is affected
- Cities
- Counties
- Local Governments
- Hotel and lodging industry
- Taxpayers
Notable changes
- Shifts the allocation of transient lodging tax revenue, allowing for a greater proportion to be used for local services.
- Introduces the option of using special districts to administer and deliver services funded by the tax.
- Requires a study of local taxation by the Legislative Revenue Officer.
Sponsors
Official sponsors from legislative records.
Primary sponsors
Cosponsors
Arguments in favor
Reasons to support this legislation.
The testifiers generally support HB 3962-2, which adds 'tourism-impacted services' as an allowable use in the restricted 70% portion of local lodging tax funds. Many believe this change will provide flexibility for local governments to allocate more funds towards public safety and community infrastructure, addressing strain on resources during peak tourist seasons. the need for a balanced solution to sustain public safety services in Oregon communities hosting millions of tourists, highlighting the importance of allocating a greater portion of transient lodging tax revenue towards essential services impacted by tourism, such as roads, water systems, and emergency services.
Source: Testimony Summaries
Arguments opposed
Reasons to oppose this legislation.
Opponents of House Bill 3962 express concerns that diverting Transient Lodging Tax (TLT) funds away from tourism promotion would harm local economies, small businesses, and rural communities. Many that reducing dedicated tourism funding could lead to a loss of economic vitality, as visitors have many choices and the state needs strategic promotion to compete. Testimony highlights concerns about the impact on local businesses, job security, and community stability, with some arguing that HB 3962 would undermine the purpose of Oregon's lodging tax system and divert vital funds away from community initiatives. Opponents also express opposition due to its potential to destabilize Oregon's tourism economy, impose restrictive measures on the hospitality industry, and fail to address regional issues through local solutions.