Oregon House passes new tax on oral nicotine, taps rainy day fund for wildfire prevention

Yahoo

24-06-2025

The Oregon House passed a bill June 23 that would tax oral nicotine products, tap the state's rainy day fund and increase the timber tax to pay for preventing and fighting wildfires.
House Bill 3940 would raise more than $40 million — and possibly much more — to fund programs aimed mostly at mitigating wildfires with a smaller amount going to fire suppression.
HB 3940 passed the House 37-8, garnering bipartisan support at a time when political tensions are high in Salem. It now heads to the Senate for consideration.
'Oregon is facing a new era of wildfire risk, and we need 21st-century solutions,' said Rep. Pam Marsh, D-Ashland. 'This bill is about prioritizing wildfire mitigation, making our communities safer, and building a funding system that is more sustainable. We're investing in resilience and taking real steps to reduce the long-term human and economic toll of wildfire.'
Marsh acknowledged it wasn't enough — lawmakers had sought to raise up to $300 million per year to prevent and fight wildfires. Revenue raised in this bill goes almost entirely toward wildfire prevention — hardening homes and reducing hazardous fuels. She said more was needed to pay for wildfire suppression, likely to be proposed in separate legislation. But she called it a 'crucial first step.'
The bill includes a new tax on products such as Zyn — a nicotine pouch that are tobacco-free and designed to be placed between the gum and lip.
The new tax is $0.65 per container for packages containing up to 20 units, with an additional tax of 3.25 cents for each unit beyond 20.
Sen. Jeff Golden, D-Ashland, previously told the Statesman Journal the Zyn lobbyist was open to the tax 'because if we're taxing it, it would greatly reduce the chances we ban it in the future.'
'In Central Oregon, wildfire smoke is a leading cause of public health risk during the summer months,' said Sen. Anthony Broadman, D-Bend, co-chair of the Joint Ways and Means Subcommittee on Public Safety. 'Oregon has a long history of taxing nicotine products to support public health initiatives, and it just makes sense to use revenue associated with these products to help keep Oregonians safe and healthy.'
The bill also requires transfer of 20% of the interest earned by Oregon's rainy day fund, which amounts to a little under $30 million in the 2025-27 biennium but that is expected to grow.
The bill would also increase the Forest Products Harvest Tax from 62.5 cents to $1 per thousand board feet.
The new taxes would begin Jan. 1, 2026.
Money from the nicotine tax and rainy day fund would be sent into funds aimed at preventing wildfires.
For example, over the next two years — biennium 2025-27 — an estimated $29.2 million would go into a Community Risk Reduction Fund managed by the Oregon State Fire Marshal to addresses home hardening, defensible space and neighborhood work, Marsh said. Another $14.1 million would go into the Landscape Resiliency Fund aimed at reducing hazardous fuels in forest and rangeland near communities by the Oregon Department of Forestry.
Money from the increased timber tax, around $1.7 million in 2025-27, would go into the Forestland Protection Fund, which is used for suppression.
Marsh acknowledged the state needed far more wildfire suppression, but noted that money was expected to come in different legislation.
In 2024, Oregon lawmakers held a special session to approve spending $218 million the state couldn't cover in costs associated with fighting one of the busiest wildfire seasons on record.
Zach Urness has been an outdoors reporter in Oregon for 18 years and is host of the Explore Oregon Podcast. He can be reached at [e-mail] or [phone]. Find him on X at @ZachsORoutdoors and BlueSky at oregonoutdoors.bsky.social.
This article originally appeared on Salem Statesman Journal: Oregon House passes new tax on oral nicotine to pay for wildfires