Allows net local transient lodging tax revenue to be used for resiliency grants for small businesses in the restaurant and lodging industry.
Summary
HB 4148 revises Oregon’s rules for local transient lodging taxes, which are the local taxes commonly applied to hotel, motel, and other short-term lodging stays. The bill keeps the existing general limits on when a local government may impose a new lodging tax or raise an existing one, but expands and clarifies the ways net revenue from a new or increased tax may be used. In addition to tourism promotion and tourism-related facilities, the bill expressly allows revenue to support resiliency grants for small businesses in the restaurant and lodging industry and to fund city or county services. It also permits certain unexpended revenues collected before the bill’s effective date to be used under the new allocation rules.
Impact
The bill amends ORS 320.350 and changes the required allocation of net revenue from new or increased local transient lodging taxes. It lowers the minimum share that must go to tourism promotion or tourism-related facilities from 70 percent to 50 percent, and raises the maximum share that may go to city or county services from 30 percent to 50 percent. It also adds reporting requirements for local governments and destination management organizations, and directs the Legislative Revenue Officer to compile biennial summaries and conduct a study of how lodging tax revenues are being used, with those reporting and study provisions scheduled to sunset in 2041 and 2036, respectively.
Sentiment
The bill appears to have received generally favorable but not unanimous support. It passed both chambers with clear majorities, including 38-11 in the House and 23-6 in the Senate, and committee votes also favored passage. The vote margins suggest broad agreement on giving local governments more flexibility in using lodging tax revenue, while still preserving a significant tourism-related funding requirement and adding oversight.
Contention
The main point of contention is the rebalancing of lodging tax revenue away from a tourism-only focus and toward broader local government services and small-business resiliency grants. Supporters likely viewed the bill as a practical way to help cities, counties, and hospitality-related businesses use tourism-generated revenue more flexibly, especially after economic disruptions. Opponents likely objected to reducing the guaranteed share for tourism promotion and tourism-related facilities, and to allowing more of the revenue to be diverted to general local services rather than tourism-specific purposes. The added reporting and study provisions suggest lawmakers also wanted more transparency and future review of whether the new allocation rules are working as intended.
Relating to funding to support species conservation; prescribing an effective date; providing for revenue raising that requires approval by a three-fifths majority.