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Chapter 7.12 Franchises and Utility Privilege Tax Law

City Code Chapter

7.12.010 Definitions.

  1. As used in this Chapter 7.12, the following terms are defined as provided in this Section:
  2. A. Bureau means the Bureau of Planning and Sustainability of the City of Portland, Oregon, along with its employees and agents.
  3. B. Director means the Bureau Director, or the Director’s designee.

7.12.020 Record of Franchises.

  1. A. Except as otherwise required by the City Charter, the Bureau will keep a separate record of each franchise granted by the City, including:
    1. 1. Compliance of franchisees with applicable franchise provisions;
    2. 2. Franchise fee payments made to the City by franchisees; and
    3. 3. Any franchise records and statements required by the City Charter or Code.
  2. B. Records and data required under the City Charter or Code, including such information that the Bureau may require the franchisee to furnish to the City. Franchisees must provide records and information upon the Bureau’s request, at the franchisees’ own cost and expense. 

7.12.030 Authority to Inspect Franchisee Records and Require Reports.

  1. A. The Bureau may inspect franchisee records during normal business hours upon reasonable notice, to determine compliance with obligations under applicable franchise provisions, including relevant financial franchise obligations. 
  2. B. The Bureau may require, in writing and upon reasonable notice, reports and information as appropriate to determine whether franchisees are in compliance with their franchises. Franchisees must cooperate with the Bureau and must provide such information and documents as necessary for the City to evaluate compliance. The Bureau may specify the form and details of all franchise reports required under applicable franchise provisions. 
  3. C. In case any franchisee fails to provide access to records, or refuses to furnish information required under this Section when required to do so, on behalf of the City and if so directed by the Mayor or the City Administrator, the City Attorney may petition the Circuit Court of the State of Oregon for Multnomah County to compel such franchisee to furnish the information and to pay the City’s costs of the court proceedings.
  4. D. For purposes of this Section, record means written or graphic materials, however produced or reproduced, or any other tangible permanent record, including, without limitation, all letters, correspondence, memoranda, minutes, notes, summaries or accounts of telephone conversations, summaries or accounts of personal conversations or interviews, reports, notebooks, sketches, summaries or accounts of meetings or conferences, opinions or reports of consultants or experts, invoices, billings, statements of accounts, studies, appraisals, analyses, contracts, agreements, charts, graphs, photographs and any other writings or recordings of every kind and description, including magnetic media, and all sound recordings, to the extent related to the enforcement or administration of a franchise.

7.12.040 Contents of Franchise.

  1. Each franchise granted by the City will provide that the legal name and title of the franchisee, including where applicable the names of any members of a co‑partnership or association to which any franchise may be granted, will be kept on file in the Bureau and will be open to public inspection. Each franchise will also contain provisions setting forth and requiring that:
  2. A. Each franchise granted by the City is subject to the Charter and general ordinance provisions passed pursuant thereto, affecting matters of general City concern and not materially in conflict with the franchisee’s existing contractual rights, then in effect or thereafter made effective. 
  3. B. Each franchise granted by the City will incorporate by reference Sections 10-201 through 10-218, inclusive, of the Charter, and made a part of such franchise. 
  4. C. Nothing in any franchise granted by the City will be deemed to waive the requirements of the various codes and ordinances of the City regarding permits, fees to be paid or the manner of construction. 
  5. D. Franchisees must comply with all applicable City ordinances, resolutions, rules and regulations adopted or established pursuant to the City's lawful authority. 
  6. E. Unless specifically otherwise declared by the City, nothing in any franchise granted by the City will be deemed a waiver by the City of the rights of the City under applicable law.

7.12.050 Short Title and Administration.

  1. A. Purpose. This Chapter is known as the Utility Privilege Tax Law. The authority to impose utility privilege taxes is granted to the City by Oregon statutes and is exercised to the fullest extent of the state laws. The revenues generated by the Utility Privilege Tax Law are for general revenue purposes and are not regulatory.
  2. B. Administration.
    1. 1. The Utility Privilege Tax Law will be administered by the City Administrator.  The City Administrator may adopt administrative rules as authorized by Charter.
    2. 2. Authority granted to the Director may be delegated, in writing, to employees or agents of the Bureau.
    3. 3. The Director may, upon request, issue written interpretations of how the Utility Privilege Tax Law applies in general or to specific circumstances.
    4. 4. Nothing in the Utility Privilege Tax Law precludes the informal disposition of controversy by the Director in writing, whether by stipulation or agreed settlement.

7.12.060 Payment of Privilege Tax Required.

  1. A. Definitions.As used in the Utility Privilege Tax, the following terms are defined as provided in this Section:
    1. 1. Gross revenue means any revenue earned within the City, after adjustment for the net write-off of uncollectible accounts, from the sale of electrical energy, gas, district heating or cooling, or water, or sewage disposal and treatment service, or for the furnishing or sale of communications or associated services, and for use, rental, or lease of operating facilities of the utility engaged in such business.  Gross revenues will not include earnings from interstate business, or earnings from the business of the United States government.
    2. 2. Telecommunications utility has the meaning provided in ORS 759.005(9) (2011).
    3. 3. Utility means any electric cooperative, people’s utility district, privately-owned public utility or heating company.
  2. B. Any telecommunications utility using or occupying a street, alley or highway for other than travel within the City without a franchise for a period of 30 days or longer must pay a privilege tax.  The privilege tax imposed upon telecommunications utilities under this Subsection will be in an amount of seven percent of the telecommunications utility’s gross revenues earned within the corporate limits of the City for each consecutive three month period.  For the purposes of this paragraph, “gross revenues”  means all revenues derived from exchange access services, as defined in ORS 401.710, less uncollectibles from such revenues.  The privilege tax will be computed as of the commencement of business or upon the expiration of any franchise under which the telecommunications utility formerly operated.  The privilege tax will be due and payable so long as the telecommunications utility operates within the City and uses or occupies the streets, alleys or highways.
  3. C. Any utility using or occupying a street, alley, or highway within the City without a franchise for a period of 30 days or longer must pay a privilege tax for the use and occupancy of any street, alley or highway.  The privilege tax imposed under this Subsection will be in an amount of five percent of the utility’s Gross Revenues of the City for each consecutive three-month period.  The privilege tax will be computed as of 30 days after the commencement of business or 30 days after the expiration of any franchise or other authority under which the utility formerly operated.  The privilege tax will be due and payable so long as the utility operates with the City and uses or occupies the streets, alleys or highways.
  4. D. In the event a franchise is granted to any utility subject to the privilege tax under the Utility Privilege Tax Law and the franchise becomes effective, then the privilege tax will cease to apply from the effective date of the franchise. The franchise holder must pay the proportionate earned amount of the privilege tax for the current quarterly period. The privilege tax will in all such cases become immediately due and payable, and if not paid, collectible as provided in Section 7.12.080.

7.12.070 Privilege Tax Applicable to Other Cases.

  1. A. The terms of the Utility Privilege Tax will not apply to any holder of a current, valid franchise granted or issued by the City.
  2. B. The terms of this Chapter apply to any utility or telecommunications utility using or occupying a street, alley or highway within the corporate limits of the City 30 days after the expiration of the utility or telecommunications utility’s franchise.

7.12.080 Report of Earnings.

  1. Each utility and telecommunications utility subject to the privilege tax as provided in Section 7.12.060 must file with the Bureau a report of the revenues earned within the corporate limits of the City for each consecutive three-month period in the form and manner specified by the Bureau (“quarterly report”).
  2. A. The first quarterly report must be filed on or before the first payment date of privilege tax.  Subsequent quarterly reports must be filed on or before February 15th, May 15th, August 15th, and November 15th of each year.
  3. B. If a franchise is granted to a utility or telecommunications utility which is otherwise subject to the provisions of the Utility Privilege Tax Law, the utility or telecommunications utility must file a report with Bureau within 10 days after the franchise becomes effective showing the Gross Revenues earned for the proportionate period of the quarter prior to the franchise being granted.

7.12.090 Time Payment of the Privilege Tax.

  1. A. Utilities and telecommunications utilities must submit quarterly payment of Utility Privilege Taxes under Section 7.12.060 on or before February 15, May 15, August 15, and November 15 of each year and must be accompanied by the quarterly report of the revenues for that payment period, as provided under Section 7.12.080.
  2. B. If a utility or telecommunication utility fails to pay the privilege tax under the Utility Privilege Tax Law, the City Attorney may institute an action in the Circuit Court of the State of Oregon for Multnomah County to recover the amount of the privilege tax due the City, together with any applicable penalties and accrued interest.

7.12.100 No Waiver or Estoppel.

  1. Nothing in the Utility Privilege Tax Law, or in any ordinance granting a franchise or right to any utility or telecommunications utility, nor anything done or performed or monies expended under ordinance, will estop or prevent the City from requiring the utility or telecommunications utility to cease using or occupying the streets, alleys or highways within the corporate limits of the City upon the expiration or other termination of such franchise or right to use or occupy the streets, alleys or highways.

7.12.110 Credits Allowable.

  1. Any amount which any utility or telecommunications utility may have paid to the City under the terms of any provision of franchise, permit or ordinance in lieu of franchise granted by the City may be credited against the amount or amounts which have accrued or will have accrued under the Utility Privilege Tax Law.

7.12.120 Interest and Penalty Applicable.

  1. A. Interest will be assessed on any unpaid privilege tax at the rate of 0.833 percent simple interest per month or fraction thereof (10 percent per annum), computed from the original due date of the tax to the 15th day of the month following the date of the payment.
    1. 1. For purposes of calculating interest under Subsection 7.12.120 A., the amount of the privilege tax due will be reduced by the amount of any privilege tax payments received by the Bureau on or before the due dates established in the Utility Privilege Tax Law.
    2. 2. Interest amounts properly assessed in accordance with this Section may not be waived or reduced by the Director.
  2. B. Any person subject to this Chapter or any officer or agent of any association or corporation subject to the provisions of this Chapter who, for a period of 30 days after the statement is required to be filed with the Bureau, fails, neglects, or refuses to file with the Bureau the quarterly statement of Gross Revenues of such person, association or corporation will be subject to the penalties, including the criminal penalties, provided for violations of Section 7.02.700 Penalties.

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