SALEM — An exemption from a state construction tax for those building to replace residential housing destroyed or damaged by fire or other emergency events was just a step away from becoming law Thursday, June 10, after House Bill 2607 passed through the Oregon Senate.

The bill was passed Thursday on its third reading in the state Senate by a 2911 vote. The lone “nay” vote came via Sen. Dallas Heard, R-Roseburg. HB 2607 now awaits Gov. Kate Brown’s signature to sign it into law. The bill, retroactive to Jan. 1, 2020, does not take effect until 90 days after being signed by the governor.

State Rep. David Gomberg, D-Otis, whose District 10 includes most of Lincoln County and parts of Polk, Tillamook and Yamhill counties, is one of the chief sponsors of the bill. He sought the exemption following last September’s Echo Mountain Complex fire, which destroyed nearly 300 homes in the Otis and Rose Lodge area, Gomberg’s home turf.

When many of the local fire victims began efforts to rebuild, they were faced with a $1.24 per square foot residential construction excise tax levied by the Lincoln County School District, imposed the year after the Oregon Legislature created the ability for school districts to impose such a tax in 2007. Currently, more than 60 school districts in the state benefit from a new residential construction excise tax.

Echo Mountain Complex fire victims sought, and in December were granted, an exemption from the Lincoln School District’s excise tax. The major stumbling block that initially prevented the Lincoln County School District from exempting fire victims from the tax was legal interpretation of the state mandate that created the tax. 

Gomberg then introduced his bill, co-sponsored by Rep. Bill Post, R-Keizer, and Fred Girod, R-Stayton, in the state House of Representatives to amend excise tax laws to provide exceptions for those rebuilding following a natural disaster. 

“In my own district, our school district struggled with the legal interpretation compared to what they thought was the fair and right thing to do,” Gomberg told the House Special Committee on Wildfire Recovery during the first public hearing for the bill in February. “Eventually, they decided to go ahead and waive the tax, although they were receiving some legal advice that it must be applied.”

On its third reading April 9, HB 2607 passed the state House without a dissenting vote, 49-0, with 11 voters on excused absence. 

Once signed into law, the bill specifically exempts “residential housing being constructed on a lot or parcel of land to replace residential housing on the lot or parcel of land that was destroyed or damaged by wildfire or another event or circumstance that is the basis for a state of emergency” from the residential construction excise tax.

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