Item 5: Ratification of IGR Actions

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SB 0751 Relating Clause: Relating to taxation of centrally assessed property; prescribing an effective date. Title: Defines “information services” to mean offering capability to generate, acquire, store, transform, process, retrieve, utilize or make available information through communications, including electronic publishing. Sponsored by: By COMMITTEE ON FINANCE AND REVENUE URL: http://www.leg.state.or.us/11reg/measpdf/sb0700.dir/sb0751.intro.pdf Contact Respondent Dept Updated Priority Recommendation Pam Berrian CS-ISD 2/22/2011 Pri 1 Oppose Comments: Pri 1 Oppose - while I think Local and State Gov't Assns should take the lead, not necessarily telco staff, the implications and potential impacts are adverse for City of Eugene. Why? The bill would exempt "information services" (defined essentially the same as in the federal Communications Act, 47 USC Sec. 153(20)), from the reach of ORS 308.517(1)'s centrally assessed Ore. property tax. Property used to provide "telecom services," in contrast, is apparently NOT exempted from the tax. This is suggested by new ORS 308.517(5)'s exclusion of "telecom service," tracking the definition in 47 USC Sec. 47 USC Sec. 153(43) & (46), from the definition of "information service". Keep in mind that many (but not all) "information services" may also be "Internet access," but remember the federal Internet Tax Free Act (2007-2014) does not reach taxes based on "property value," ITFA Sec. 1105(10)(B). So, any new Ore. law that treats "information services" more favorably than "telecom services" is dangerous for Ord. 20083, bad policy and a slippery slope. Some svcs we used to think of as "telecom services" are now "information services." Broadband is the best example. By excluding property used to provide "information services," the bill would shrink the Ore. property tax base, & the shrinkage would grow every year, as more & more property is used to provide "information services" rather than "telecom services." To the extent that any of the ORS 308.515(1) property tax is passed on by the state to Ore. localities, this would mean a shrinkage in that revenue source for Ore. localities. But even if this property tax is not passed on to localities, shrinkage in Ore. state tax revenues probably can't be good news for Ore. localities. Moreover, any Ore. state law acceptance of differentially favorable treatment of "information services" vis-à-vis "telecom services" -- which is what this bill would appear to do -- cannot help, & could hurt the breadth of Eugene's Ord. 20083's "telecom service" definition, currently the subject of pending litigation. Moreover, any Ore. state law acceptance of differentially favorable treatment of "information services" vis-à-vis "telecom services" -- which is what this bill would appear to do -- cannot help, & could hurt the breadth of Eugene's Ord. 20083's "telecom service" definition, currently the subject of pending litigation involving Comcast. SB 751 tracks the narrower federal Communications Act definition [instead of supporting our Ord 20083's broader definition is and has been deemed legal until the Rasmussen lower court ruling in teh internet Access case.] This bill is premature. 13 | Page March 16, 2011 IGR Committee Meeting