LOC News
Senate Vote on Transportation Bill Delayed Until September 29
The final steps for Oregon’s 2025 Special Legislative Session have been delayed until September 29. While the House passed HB 3991A, a revenue bill, and HB 3992, a budget bill, on September 1, the Senate has been unable to hold a floor session due to the prolonged illness of Senator Chris Gorsek (D-Troutdale). A Senate floor vote was scheduled to occur September 17. Since HB 3991 is a revenue bill, the Senate needs 18 votes, and without a Republican Senator willing to support the bill, Senate leadership needs every Democratic member to reach 18 “yes” votes.
What Does HB 3991A Do?
The transportation funding package includes the following:
1) The bill increases the state gas tax by $0.06, registration fees by $42, and title fees by $139, which combined will generate an additional $350 million annually for the State Highway Fund (SHF). The SHF will follow the 50-30-20 shared revenue formula, with cities and counties receiving 50% percent of the revenue generated. By FY 2026, cities should see an increase of 25-30% from their current SHF distribution.
- The Small Cities program will see an increased grant fund of $1 million in 2028 for a total of $6 million/year.
- The Small County Fund will also see an increase.
2) Electric vehicles and hybrid vehicles will be subject to a road-user charge (RUC) based on vehicle miles driven. The RUC will be set at 5% of the per/gallon fuel rate ($0.023/mile).
- Electric vehicles – 2027, road user charge, or annual opt-out fee of $340
- Hybrid vehicles – 2028, road user charge, or annual opt-out fee of $340. Note: By joining this program, hybrid vehicle owners don’t pay gas tax.
3) HB 3991A also increases the payroll tax from .1% to .2% through 2027. This will effectively double the current payroll tax from $1 per $1,000 of income to $2 per $1,0000 income. For someone making $50,000 per year, their payroll tax will increase from $50 per year to $100 per year. All transit programs across Oregon will be eligible to receive funding from this revenue.
4) The bill provides a pathway for resolving the state’s Highway Cost Allocation Study, which determines the rate setting for weight-miles that heavy vehicles pay in addition to modernizing the rate structure for diesel.
5) Finally, HB 3991A increases accountability measures for the Oregon Department of Transportation (ODOT), including: the appointment of the agency’s director, which is now done by the governor; several reporting requirements from ODOT; and adding legislative oversight of decision-making.
For more details on HB 3991, click here.
Contact: Jim McCauley, Legislative Director – jmccauley@orcites.org
Last Updated 9/19/25