The Oregon House of Representatives has approved House Bill 4148, legislation designed to reshape how communities across the state manage and reinvest revenue generated from tourism. Supporters say the proposal reflects a broader economic shift in Oregon’s visitor economy, where growing tourism activity has brought both financial opportunity and increasing pressure on local infrastructure, public services, and small businesses.
The measure, known as the Local Opportunities for Community Advancement and Livability Act, now moves to the Oregon Senate for consideration following House approval. Lawmakers backing the proposal argue that the legislation modernizes an existing funding model that many cities and counties believe no longer aligns with today’s economic realities.
For decades, Oregon law has required local governments to dedicate the majority of transient lodging tax revenue toward tourism promotion efforts such as advertising campaigns, visitor marketing, and destination branding. Only a smaller share could be used for general governmental services. The newly approved proposal shifts that balance, allowing communities greater discretion over how lodging tax revenue is allocated, including expanded authority to support essential public services.
Representative Jules Walters said the change acknowledges the evolving impacts of successful tourism strategies across Oregon communities.
“Tourism promotion has worked,” Walters said. “But the success of that promotion has increased demands on local infrastructure, public safety, and services. The LOCAL Act recognizes that communities need flexibility to reinvest in the places and people that make tourism possible in the first place.”
The economic argument behind the proposal centers on sustainability rather than expansion. Lawmakers emphasized that tourism growth has generated significant economic activity statewide, particularly in coastal towns, Central Oregon recreation hubs, and gateway communities near natural attractions such as Crater Lake. However, increased visitation has also strained roads, emergency services, utilities, housing availability, and downtown business districts.
Supporters contend that allowing a larger share of lodging tax revenue to flow into local government operations will help communities maintain the very conditions that attract visitors in the first place. Rather than reducing tourism promotion, the legislation attempts to rebalance investment between marketing efforts and the physical and social infrastructure supporting visitor economies.
Representative Cyrus Javadi framed the proposal as a long-term economic strategy focused on stability rather than short-term promotion cycles.
“Healthy tourism isn’t just about ads and glossy brochures,” Javadi said. “It’s about towns with safe Main streets, small businesses with safe buildings, working utilities, and communities that feel livable year-round. If we want people visiting the Oregon coast, Central Oregon, the Crater Lake region, and main streets across this state twenty years from now, we have to think beyond next quarter’s marketing plan.”
Beyond adjusting revenue allocation, the legislation introduces a targeted economic development tool aimed directly at locally owned businesses. Under the proposal, cities and counties would gain authority to award grants to restaurants and lodging establishments for building improvements, accessibility upgrades, and infrastructure modernization. Advocates say these investments could help small businesses remain competitive while meeting evolving safety standards and customer expectations.
Economists and local officials have increasingly noted that mature tourism markets face different challenges than emerging destinations. While marketing campaigns may drive visitation, maintaining visitor satisfaction often depends on public safety, clean streets, reliable utilities, and well-maintained commercial properties. The legislation attempts to address this transition by allowing local leaders to prioritize community livability alongside visitor attraction.
The bill maintains a defined portion of lodging tax revenue dedicated to tourism promotion, signaling continued state support for Oregon’s travel industry, which remains a major economic driver for rural and urban regions alike. At the same time, proponents argue the updated structure recognizes that tourism economies must also support residents who live and work in those communities year-round.
If approved by the Senate and signed into law, local governments across Oregon would gain new flexibility to align tourism revenue spending with local economic conditions. Supporters say that flexibility could help communities better manage growth, preserve quality of life, and strengthen long-term economic resilience as Oregon’s tourism sector continues to evolve.