Item C: Telecommunications Tax Fund

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ATTACHMENT D Intergovernmental Relations City of Eugene 777 Pearl Street, Room 105 M Eugene, Oregon 97401-2793 EMORANDUM (541) 682-5177 (541) 682-5414 FAX www.ci.eugene.or.us Date: September 15, 2005 To: Mayor and Council From: Jason Heuser, Intergovernmental Relations Manager, 682-8441 Subject: Recap of 2005 Legislative Session and HB 3353 The City of Eugene joined with intergovernmental partners in Salem to oppose a number of legislative measures and “gut and stuff” amendments aiming to preempt the local authority of all Oregon cities in the area of telecommunications. Pertinent to Eugene’s program, established in 1997 through Ordinance 20083, industry-backed legislation sought to pre-empt local authority to charge telecommunications and cable business privilege taxes (to all wireless or wireline providers operating in Eugene) and rights of way use fees for any commercial users of that public commodity, including incumbent local exchange carriers (ILECs) such as Qwest. The industry sponsored bill, HB 3353, failed to garner enough votes to pass in committee, but during its public hearing, the City’s 2% dedicated telecommunications tax ordinance was held up to great scrutiny as the first of its kind in the state of Oregon, having prevailed in 2004 at the Oregon Supreme Court level. Mayor Kitty Piercy joined a panel of local government witnesses and ably presented and defended the timeline for the development, enactment and outcomes of the City’s 2% telecommunications tax. Committee discussion and testimony explored in some detail the expenditures that had been made from Eugene’s 2% telecommunications tax fund, as the project list for FYs 03-05 was included as an attachment to the City of Eugene’s testimony. The City of Eugene, as a case study and landmark ordinance, generally reflected positively on tax and fee authority for local governments. The legislative committee particularly noted the City’s stewardship of the telecom fund, and the merits of telecommunications reinvestment using telecommunication tax funds, especially technology upgrades for public safety services. The committee expressed great concern that future communities enacting ordinances similar to Eugene’s, may not “follow Eugene’s example of stewardship” of the telecom fund, geared around reinvestment with a focused nexus to telecom technology-related projects of community benefit. These poignant and telecommunications related examples resulted in greater understanding and support for Eugene’s business-specific tax from key members of a legislative committee wielding oversight or local authority in this area.