The bill is designed to end legal uncertainty around a concept known as "central assessment," which values telecommunications companies' property based in part on the worth of their brand.
(Tribune News Service) -- A package of changes to Oregon tax law intended to encourage technology investment sailed through the state Senate on Monday, winning approval 27-3. The bill is headed Tuesday to the Oregon House.
The legislation's backers say a thorny provision of Oregon tax law is deterring new investment in the state. They hope the legislation will encourage Google Fiber to build hyperfast Internet service in Portland, prompt Apple to expand its data center in Prineville and make Oregon more appealing to large technology investments.
Senate Bill 611 was among the Legislature's top priorities during the current session, but it spent nearly all of February stuck in committee while lawmakers and companies haggled over details. The Senate Committee on Finance and Revenue unanimously approved the bill last week, sending it to the full Senate.
The bill is designed to end legal uncertainty around a concept known as "central assessment," which values telecommunications companies' property based in part on the worth of their brand and other "intangibles."
Comcast says that its annual Oregon property tax bill is $26.1 million, more than triple what it pays in other states, as a result of central assessment.
Assessing a company's brand and other intangible assets is an unusual method of valuing property, and Comcast fought central assessment in court. The cable TV company lost a key ruling by the Oregon Supreme Court last fall but some aspects of the issue continue to be litigated.
State officials say central assessment is one factor holding up Google Fiber's decision on whether to bring fast Internet service to the Portland area. And they say Apple has delayed expansion of its Prineville data center because of concern central assessment might someday apply to its operations, too.
SB611 makes three changes:
It caps central assessment for Comcast and other telecom companies based on a formula that draws on the historical cost of their Oregon investments.
It creates a new program that exempts Internet service providers that offer superfast gigabit connections, like the project Google Fiber is contemplating, from central assessment.
It exempts data centers from central assessment.
The Legislative Revenue Office estimates the changes would cost Oregon local governments more than $16 million annually.
The League of Oregon Cities said last week it supports the tax exemptions for Google Fiber and data centers but is concerned the caps for Comcast and other telecom companies will cost local governments too much.
Only three senators voted against the bill Monday: Kim Thatcher, R-Keizer; Fred Girod, R-Stayton; and Michael Dembrow, D-Portland.
©2015 The Oregonian (Portland, Ore.) Distributed by Tribune Content Agency, LLC
Looking for the latest gov tech news as it happens? Subscribe to GT newsletters.