The Oregon Restaurant & Lodging Association (ORLA) is voicing strong opposition to House Bill 3962, citing a deeply flawed process, a lack of collaboration and the bill’s potential to damage longstanding partnerships between the private sector and local governments.
House Bill 3962, a last-minute rewrite of House Bill 3556 through a legislative maneuver known as “gut and stuff,” was released with -14 amendments just prior to the hearing. The result was widespread confusion among stakeholders and an erosion of trust in the legislative process.
“Rushed legislation at the 11th hour may create temporary political wins,” said Jason Brandt, President & CEO of ORLA, “but they are often wrought with unintended consequences and long-term damage to Oregon’s economic engine.”
From the start of the 2025 session, the approach to Transient Lodging Tax (TLT) proposals has lacked transparency and genuine collaboration. While ORLA appreciates the effort by House Revenue Committee Chair Nathanson to convene meetings with stakeholders, the process remained reactive and exclusionary—forcing industry representatives to respond to proposals rather than co-develop them with local government partners based on agreed upon facts.
For decades, Oregon’s TLT framework has been shaped by a partnership between the lodging industry—the tax generator—and state and local governments—the tax spenders. This collaboration has resulted in high-impact outcomes for the state including global successes like the 2022 World Athletics Championships in Eugene. HB 3962 threatens to dismantle this cooperative model by granting local governments unchecked authority to redirect TLT funds, undermining the very industry that fuels them.
“The lodging industry feels like it’s being thrown under the bus,” said Brandt. “House Bill 3962 sends a message that state government will side with local jurisdictions at the expense of the private sector that provides over 200,000 jobs in Oregon’s hospitality and tourism economy.”
ORLA warns that HB 3962 could create a ripple effect of inequity, reduce private sector investment and open the door to inconsistent spending practices that lack accountability. Without reasonable guardrails, local governments may use lodging tax revenue for unrelated expenses, distancing the use of funds from their original purpose of supporting tourism and economic development.
ORLA urges legislators to hit pause on HB 3962 and recommit to a collaborative, transparent and equitable process. Engaging industry stakeholders before legislative proposals are finalized is critical to finding compromise and building sustainable public-private partnerships.
“We must embrace the private sector as a partner, not an afterthought,” Brandt added. “Let’s work together to modernize Oregon’s approach to lodging taxes without sacrificing the trust and success that have defined our past.”
