Following the Legislature’s failure to pass a transportation package during the 2025 regular legislative session, Governor Kotek called a special legislative session, which started Aug. 29. House Bill 3991, the special session transportation bill, passed out of the Senate on Monday, Sept. 29, and is expected to move to the governor’s desk for signature.
The Association of Oregon Counties (AOC) was in regular conversations with the governor’s office as this special session proposal was developed to ensure that it met our adopted principles and longstanding priority to stabilize the State Highway Fund (SHF), maintain the counties’ 30% share, and included a continuation of the Small County Allotment, which supports the lowest population counties with large road miles to maintain.
HB 3991 would generate approximately $700 million a biennium in the SHF revenue (split 50/30/20), primarily through a $0.06 per gallon increase to the gas tax; a $42 increase to all registration fees, an additional $30 for electric vehicles and 40+ mpg vehicles; and a $139 increase to title fees. The proposal also includes a phased-in mandatory road user charge program for electric and hybrid vehicles beginning July 2027, updates to heavy truck and diesel taxes, and accountability measures at the Oregon Department of Transportation. A comprehensive overview of HB 3991 is available here.
Initial revenue projections show that counties will benefit from a 30% increase in state funding over four years from HB 3991. The increased SHF revenue comes with no off-the-top allocations and is the largest relative allocation share of SHF to county funding in a modern transportation package. This will allow most counties to maintain current services and operations and keep roads and bridges open and safe.
One of AOC’s top policy priorities this year was the passage of a comprehensive transportation funding package prioritizing investments in operations, maintenance, and safety; incorporating diverse and modern funding mechanisms to ensure the growth and stabilization of the SHF; maintaining the 30% county share of SHF revenues; and reducing barriers to local revenue sources. Throughout the 18+ months of legislative discussions about a 2025 transportation package, AOC, the Oregon Association of County Engineers and Surveyors (OACES), and counties have shown up strong at every turn and consistently communicated the message that counties are the state’s partner in maintaining a safe and seamless transportation system, and shared SHF revenues support this partnership.
AOC supported HB 3991 in consideration of the critical new funding it will provide to counties and the inclusion of both the 50/30/20 funding distribution and the Small County Allotment.
Contributed by: Mallorie Roberts | Legislative Affairs Director