Item C: Telecommunications Tax Fund

Home Browse Search

Appendix: Prevailing Despite Adversity – Eugene’s Six Years of Litigation Shortly after the July 1997 effective date of Ordinance 20083, legal challenges were filed in Lane County Circuit Court by four industry giants: TCI Cable (now Comcast), US West (now Qwest), AT&T Wireless, and Sprint PCS. Although challenging the entire ordinance, industry took aim at the 2% tax----the very heart of Eugene’s telecommunications technology re- investment plan. Some provisions of Ordinance 20083 were implemented because of validated provisions in City Code, but the 2% tax was fully suspended. Eugene prevailed in three cases in late 2002 when the Oregon Supreme Court refused to hear AT&T, Sprint PCS and Comcast appeals of lower court decisions supporting Eugene. By December 2003, that Court also ruled in favor of Eugene in the Qwest case. The 24-page decision is at: www.publications.ojd.state.or.us/A105861.htm. Decision Highlights The 2% registration fee/tax intended to fund telecom projects was the focus of this litigation and at issue was the validity of an ordinance that imposes various fees and regulatory requirements on telecommunications providers operating in the city. Eugene is a home rule municipality, governed by a charter that among other things, grants the city the following authority: All powers that the constitution or laws of the United States or of this state expressly or impliedly grant or allow cities, as fully as if this charter specifically stated each of those powers. No mention of a particular power may be construed to be exclusive or to restrict the scope of the powers that the city would have if the particular power were not mentioned. The charter shall be liberally construed, to the end that the city has all powers necessary or convenient for the conduct of its affairs. These are common provisions in Oregon “general powers” charters, and in some County charters. A.State Law Claims 1. Plaintiffs contended that municipalities are authorized to tax only "telecommunications carrier[s]" for use of municipal rights-of-way and that wireless carriers are not "telecommunications carrier[s]" within the meaning of that statute, thus the City was not authorized to tax them. The City argued that State law does not provide that Eugene may tax only telecommunications carriers. Further, Oregon’s Constitution provides that "[t]he legal voters of every city and town are hereby granted power to enact and amend their municipal charter, subject to the Constitution and criminal laws of the State of Oregon." The court agreed with the City, finding that "home rule" provisions permit the people of cities or towns to determine for themselves the organization and powers of their local governments without the need to obtain authority from the state legislature. A local law is considered preempted if it is "incompatible" with legislative policy, if local and state or federal law cannot operate concurrently or if the state legislature or Congress intended to preempt the local enactment. Absent from State statute is any language remotely suggesting that a municipality cannot levy any other tax. Right of Way Management and Compensation Page 13 of 15 APWA Fall Conference - 2005