Item C: Telecommunications Tax Fund

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prioritized recommendations to the City Manager. While all departments are represented, the bulk of the funding has been received by public safety departments. Some projects receive 1-3 years of system maintenance funding. Attachment C describes the project application process and illustrates the wide variety of projects funded by the Telecommunications Tax. Beginning when arrears were collected in the latter part of FY03, more than $3 million in new telecommunications projects has been awarded to date. $700,000 is committed to maintenance of some projects across multiple fiscal years, for up to three years. Particular to the major e-Government portal project, staff plans to update the City’s e-Government strategic plan using a public process. In 2006, the City’s e-Gov Team will implement Phase Two of the City’s Web Portal including "My Neighborhood" and "My Projects" when the public process will begin by identifying key stakeholder groups and gathering structured input via activities such as a Web survey form, meetings with neighborhood leaders, Chamber of Commerce, University of Oregon, student groups and randomly selected citizens, a survey booth at the Library, and a survey booth at community events such as the Asian Celebration, UO events, etc. As part of that review and update, the project selection process will be amended to incorporate the results of the updated e-Government strategic plan. Continued Threats : Municipalities across the U.S. authorized to manage the public rights-of-way and establish related fee or tax programs operate under continued threats of pre-emption. The high-stakes economic and political environment continues to produce pre-emptive legislation at the state and federal level, FCC declaratory rulings, continued litigation, and referendums against local government-initiated telecom taxes and fees. This activity occurs in an environment of converging technologies where voice and video services are offered on a variety of platforms. ? In late 2004, municipalities fought hard to retain their authority after new language was inserted into S150, a federal internet sales tax moratorium bill intended to extend the moratorium date. The new language threatened programs like Eugene’s by prohibiting fees and taxes on telecommunications carriers that happened to use their systems for Internet applications. Local governments prevailed and continue to be permitted to charge fees and taxes on facility-based public rights-of-way users. ? Recently, the U.S. Supreme Court ruled cable modem Internet services to be untouchable by local governments; fees cannot be charged although the system uses the public rights-of-way. The case began when the FCC ruled that cable modem is neither telecommunications nor cable, but an “information service,’ out of reach of local government fees and taxes. Billions of dollars of potential tax/fee revenue for local governments across the U.S. is unable to be captured. ? Despite studies that indicate Oregon is ranked the 4th lowest in the United States for telecommunications related taxation, Oregon cities face continued pre-emptive threats: ?2005 was another in a series of post-act pre-emptive legislative sessions. Oregon local governments opposed legislation that would have required expensive local elections any time an elected body sought to change (reduce, amend, increase) any fee or tax on a telecommunications carrier. Another opposed bill would have created a single statewide plan for telecommunications rights-of-way use and taxation, centralized collection by the state, and required mandatory retail end user payment of any fees and taxes. Yet another